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Supporting Small Firms to Tackle Late Payment
At the end of last year, the Government announced the launch of the complaint handling service of the Small Business Commissioner to ensure fair payment practices for small businesses.
This means that the Small Business Commissioner, Paul Uppal, can now handle complaints from small businesses about unfair payment practices.
Government figures show that a third of payments to small businesses are late, and 20% of small businesses have run in to cash flow problems due to late payments.
The appointment of a Small Business Commissioner is one of a number of measures the Government is taking to tackle a late payment culture. Regulations came into force in April 2017 requiring large businesses to publically report the average time they take to pay their suppliers. This allows suppliers, including small businesses, to make informed decisions about who they do business with. So far over 200 of the UK’s largest businesses have apparently submitted payment reports.
Commenting on the announcement, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said:
“The UK is gripped by a poor payments crisis, over 30% of payments to small businesses are late and the average value of each payment is £6,142. This not only impacts on the small business and the owner, it is damaging the wider economy.
“The Small Business Commissioner is crucial to turning the tide on this late payments culture. FSB will be encouraging small businesses affected to use the service, and we hope then to see clear actions taken to tackle the worst examples of supply chain bullying. Success will be a UK economic culture where a business that does a job promptly, is paid promptly.”
For expert legal advice on these issues, and other areas of corporate and commercial law, then contact our specialist commercial lawyers today.