The Department of Trade and Industry is poised to launch a renewed investigation into Rentokil Initial’s controversial 60-day payment policy, Accountancy Age has learned.
Michael Wills, Minister for Small Firms, has promised he will ‘revisit’ Rentokil’s payment policy to see if it breaks the code of the government-sponsored Better Payment Practice Group (BPPG), which Rentokil is signed up to.
The news, which will come as a blow to Rentokil, emerged after a recent meeting between the minister and the Forum of Private Business. The DTI and BPPG last month accepted a revised Rentokil payment policy, which offers suppliers a higher rate of interest to compensate for late invoices.
Rentokil’s October circular to suppliers, enforcing a 60-day payment policy, triggered a national debate over late payment. It also led to calls for Rentokil’s chief executive, Sir Clive Thompson, to resign as president of the CBI.
Under November’s Late Payment Act, small companies can charge a company 8% interest above base rate on unpaid bills after 30 days, if no contract has been agreed.
Nick Goulding, policy director of the FPB, said: ‘Rentokil’s behaviour smacks of bad practice and does not conform to the spirit or letter of the code.’
A Rentokil spokesman said he was unaware of any further DTI investigation.
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