New consultation launched to protect small businesses from late payments

Small businesses across the UK are currently owed £23.4 billion in overdue invoices, which can lead to serious cash flow issues and potential closure. So, when a new consultation was launched by the Government last week, it was very welcomed.

The consultation aims to give the Small Business Commissioner (SBC) more powers to support small businesses with late payments. These new powers include the following:

• 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. This will give a clear incentive for companies to pay their partners on time
• The power to compel companies to share information during an investigation by the SBC. This will ensure cooperation with SBC investigations and provide more information about company 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 allow the Commissioner to investigate complaints about other businesses relating to payment matters in connection with the supply of goods and services
• To review and report on wider business practices outside of payment matters, on instruction of the BEIS Secretary of State. This could be a practices unrelated to payment matters specifically impacting small businesses such as supply problems, or broader issues like barriers to the adoption of payment technology
• The power to claim investigation costs from an investigated company when there are adverse findings against them

Director of My Debt Recovery, Sean Husband, commented:

“This is a positive step forward because late payments have a huge impact on small businesses and can sometimes be the difference between continuing to trade and shutting up shop. It’s great to see the Government is committed to supporting small businesses by increasing the powers of the Small Business Commissioner. We look forward to seeing the outcome of the consultation.”

If you are struggling with late payments, contact our team  on 0800 009 6106 or hello@mydebtrecovery.co.uk to see how we can help.

*Source: https://www.gov.uk/government/news/government-to-protect-small-businesses-with-action-on-late-payments