SMALL businesses are asking the States to introduce a policy of prompt payment.

They want the Island’s government to set an example to others so that smaller businesses are not left struggling to maintain their cash flow.

David Warr, who chairs the Jersey Chamber of Commerce small business sub-committee and also sits on the newly formed Small Business Forum, said that quarterly payments were a particular danger, especially at times of financial downturn.

‘We are now getting the returns for GST and Social Security, as well as the monthly Itis [pay as you earn taxation], and for businesses that are renting there is also the quarterly rental as well,’ he said. ‘I think it will be a big issue over the coming months, especially after Christmas with everybody tightening their belts.’

Mr Warr said that the practice of ‘shadow banking’ – whereby businesses asked their suppliers for extended credit to avoid an overdraft – would only get picked up further down the line. He said that in the UK some banks had announced that they were calling in overdraft facilities for some businesses.