Is your business hurting because of late payments?

The Office of the Small Business Commissioner, launched in December 2017, has reclaimed less than £800,000 for small businesses since June 2021.

At the same time it has been revealed that the British Business Bank (BBB), the Government's economic development agency, reported a loss of £135m in the year to March.

Neither of these revelations is good news for SMEs, already struggling with rising interest rates and costs.

The British Business Bank was set up by the Government to support investments in SMEs.

The Office of the Business Commissioner was supposed to improve the situation for SMEs waiting on payments from bigger organisations.

It seems neither has been particularly successful in fulfilling its remit.

A Government review of payment rules and the role of the Commissioner was completed this year and is due to report soon.

Craig Beaumont, chief of external affairs at the Federation of Small Businesses, says the decline in recoveries shows it is...

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How do you protect your business from late payments?

late payment Apr 25, 2023

According to figures from Bibby Financial Services, which provides financial services to SMEs, the average level of bad debt - where a company suffers because clients fail to pay the full sum invoiced – has risen by 61% in the past year.

Late payments also climbed last year, with nearly a fifth of businesses reporting that they were paid for their services after 90 or more days.

It is not surprising, therefore, that UK company profit warnings for the first quarter of 2023 rose to 75 compared with 72 for the same quarter in 2022.

Meanwhile a promised review of the powers of the Small Business Commissioner which started in 2020 was delayed, like many things, by the disruption of the Covid pandemic and lockdowns and has been resurrected in February this year.

Among the proposed actions was to reduce the maximum payment period from 60 to 30 days for businesses that had signed up to the (voluntary) Prompt Payment Code and to allow the Small Business Commissioner to impose legally...

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Walk away!

The most recent survey of small businesses carried out by the FSB (Federation of Small Businesses) has found that at least a third of small businesses have seen late payment of invoices increase over the last three months.

Its new chair, Martin McTague, has called on the Government to include in the long-delayed audit reforms a requirement for a board-level role with responsibility for payments.

Small Business Commissioner Liz Barclay has urged small firms to be more “brave” and reject unreasonable payment terms.

She said: “Some small businesses are beginning to say, ‘No, I’ll walk away. I’m not accepting 90 days’.”

Ms Barclay argues that small businesses have more power than they think because they drive the success of larger companies and the latter “are putting their reputations on the line by failing to pay smaller suppliers on time.”.

Fine words, but can you afford to walk away?

Perhaps the question should be...

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Tax Relief For SMEs Impacted By Covid-19

covid-19 hmrc late payment sme Mar 19, 2020

HM Revenue & Customs has been told by the government to adopt a lenient approach with SMEs impacted by coronavirus that are unable to pay PAYE, VAT and other taxes.

It has set up a hotline for directors to call and ask for a “Time to Pay” arrangement if they're struggling because of the effects of the pandemic.

The number to call is 0800 015 9559.

HMRC will consider proposals for deferred payments or for spreading payments over time, say 12 months or even longer, and can waive late payment penalties and interest, but you must call them as soon as possible.

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Late Payments putting even more pressure on SMEs in 2020

The amount owed to UK SMEs in late payments had allegedly risen to £50bn in early January according to research by digital banking platform Tide as reported by CityAM.

It has calculated that the average UK SME is chasing five outstanding invoices at once, wasting an hour and a half every day.

Data from Pay UK, which runs the Bacs Direct Credit and Direct Debit payment services, later in the month revealed that late payments had reached a four-year high last year at £23bn.

Tide’s new £50bn total was considerably higher than Pay UK’s total of £23bn owed to SMEs and I cannot reconcile the two figures.  The Tide research was conducted by Atomik Research among 1,002 SME decision makers from the UK and, it appears, judging by a footnote to the Tide report, that its £50bn figure may have been estimated on the basis of a total of 5.9 million SMEs, as calculated by The Department for Business .

However, the situation puts immense pressure on...

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Update – sacked Small Business Commissioner speaks out

The now-ex Small Business Commissioner, Paul Uppal, has accused the Government of thwarting attempts to help SMEs tackle the late payment scourge.

Mr Uppal has reportedly blamed Whitehall for pushing him out of a role which, he says, is under-resourced and ignored by government.

He said that his office was met with “radio silence” from civil servants and ministers over his approach to the job and that his budget was too small to tackle the “huge task” of getting big companies to pay small businesses on time.

He also revealed a little more detail about the reason for his sacking, which was “a disagreement over an alleged conflict of interest related to an unpaid, interim advisory role in another government-backed small business scheme”.

The Times, is the only national broadsheet to cover the story, although it has been picked up by the online publication smallbusiness.co.uk.

It seems that The Times is becoming the champion of SMEs, carrying...

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Small Business Commissioner Paul Uppal sacked – is this down to his success in holding large companies to account?

In a worrying development the Government has sacked Paul Uppal, the Small Business Commissioner, over what it called a “conflict of interest”.

Even more worryingly, the only news outlet to report on the development was The Times, on October 12.

It reports that “the business department felt his involvement in establishing a bank redress scheme was a conflict of interest”.

So far, apart from the report in The Times, there has been a deafening silence on this development.

Mr Uppal’s role as a mediator of payment disputes between small and large companies was established in 2016.

His dismissal came just a few days after the Government had announced that Mr Uppal’s role was to be expanded to having a seat on the Compliance Board of the Prompt Payment Code, which it was intending also to strengthen.

The Government said: “Fiona Dickie, the Deputy Pubs Code Adjudicator, will provide oversight in the Small Business Commissioner role until early...

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