New help promised for dealing with late payment issues

Small businesses which are feeling the pinch from the cash flow impact of Covid are set to receive more help from the government on dealing with late payments.

It has launched a consultation until 24 December 2020 on beefing up the powers of the Small Business Commissioner to resolve late payment issues.

The Office of the Small Business Commissioner was established in 2017 to address the issue of late payments.

Currently £23.4 billion worth of late invoices are owed to small firms across Britain, impacting on businesses’ cash flow and ultimate survival.

The proposals put forward look to give new powers to the Small Business Commissioner (SBC) including:

• the power to order companies to pay their partners, either as a lump sum or agreed payment plan, when a complaint against them for late payment has been investigated and upheld. Companies which do not do so could face further penalties, including fines.
• the power to compel companies to share information during an investigation by the SBC on payment practices
• the power to launch investigations into suspected bad payment practice, without the need to have first received a complaint from a small business
• expanding the scope for complaints to the SBC to cover complaints about other businesses relating to payment matters regarding the supply of goods and services
• to review and report on wider business practices outside of payment matters, on instruction from the government. This could include supply problems or barriers to the adoption of payment technology, for example
• the power to claim costs from an investigated company when there are adverse findings against them

A better payment culture will help small businesses to succeed.

According to the Federation of Small Businesses (FSB), around 50,000 small companies close each year due to late payments.

With many UK businesses feeling the impact of coronavirus, late payment is an urgent issue.

The consultation opens today and will run until 24 December 2020. Businesses are invited to share their views here.

For more guidance on getting businesses working again after the Coronavirus, check out our Business After-COVID Knowledge Hub.