The British Chambers of Commerce has welcomed new proposals outlined by the Government to ensure small businesses in the UK are paid on time.
Currently £23.4 billion worth of late invoices are owed to small firms across Britain, impacting on businesses’ cash flow and ultimate survival.
The announcement was part of a new consultation launched today, look to give new powers to the Small Business Commissioner 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. 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
Small Business Minister Paul Scully said: “Late payments are a terrible burden for small businesses, not only disrupting their cash flow but posing a threat to their survival in many cases.
“We are committed to tackling this problem, supporting small businesses at this critical time for the British economy by helping them to secure payment on time.
“I am pleased to open this consultation on expanding the Commissioner’s powers and welcome the views of businesses that have been affected by this issue.”
James Martin, British Chambers of Commerce (BCC) Director of Policy, said: “With firms continuing to face significant cash flow difficulties, and our research suggesting that late payment has increased during the pandemic, businesses will be encouraged by the government’s commitment to creating a culture of prompt payment. But the real test of any reforms will be whether anything changes for firms across the country struggling to manage their cashflow because of this issue.
“Chambers of Commerce will continue their work with Government and the Small Business Commissioner to find ways to tackle this burgeoning issue.”