Government launches Small Business Commissioner to help small firms resolve payment disputes

Small businesses now have a new support and guidance service to turn to when faced with payment disputes. The complaint handling service of the Small Business Commissioner has been launched to ensure fair payment practices for small businesses.

The Commissioner will provide support to Britain’s small firms and help to drive a culture change regarding payments. Statistics show a third of payments to small businesses are late, and 20% of small businesses have run in to cash flow problems due to such issues.

Regulations made by Small Business Minister Margot James mean the office of the Commissioner can now handle complaints from small businesses and help them to resolve payment disputes and tackle larger businesses unfair payment practices.

The newly launched service follows the appointment of Paul Uppal to the role of Small Business Commissioner.

Margot James said: “This government’s Industrial Strategy is building a Britain in which small business can continue to thrive.

“Over the last 5 years the amount owed to smaller businesses has more than halved from £30 billion to £14 billion. Today’s Small Business Commissioner service will empower small businesses to take action if they are paid late, potentially delivering a £2.5 billion annual boost to the economy.”

The Commissioner’s website is also now live, providing guidance to small firms on payment issues including how to take action if a payment is overdue.

Paul Uppal, Small Business Commissioner, said: “Having run my own small business for over 20 years I am well aware that integrity and trust are key to running and building a successful business. My mission is to help all small businesses nurture positive and lasting relationships with their customers that work in the best interests of both.

“Today I am launching a new website so small businesses know their rights, as well as how to contact me if they need further action to be taken when the larger businesses they supply owe them money.”

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.”

Help for small businesses

The Small Business Commissioner’s website guides small businesses on how to ‘check, chase, and choose’ how to deal with unfair and late payments. It advises businesses to: ‘First make sure that you invoiced correctly, then chase informally before deciding if there’s further action you want to take.’

Alongside the Small Business Commissioner, the government also introduced regulations 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 submitted payment reports.