The government has opened a consultation on expanding the Small Business Commissioner’s powers, as part of plans to create a prompt payment culture in UK business.
According to research conducted by the FSB, each year around 50,000 small companies are forced to close due to problems stemming from late payments. Estimates also suggest a total of £23.4bn was owed to small and medium-sized businesses in late payments last year, with this figure believed to have increased during the pandemic as larger companies have delayed payments to conserve their own cash.
In its 2019 election manifesto, the Conservative Party promised a clampdown in this area and Paul Scully, the Minister for Small Business, has now announced details of new proposals designed to stop large firms taking too long to pay their suppliers.
Specifically, the consultation is set to consider whether the Small Business Commissioner should be given the power to order companies to pay in good time and impose fines if they do not, compel firms to share information on payment practices and to proactively launch investigations. The consultation will run until 24 December, with all interested businesses invited to share their views on the new proposals.