Small Business Commissioner to aid unpaid contractors

A plan to appoint a Small Business Commissioner to help one-man bands resolve payment disputes delivers on a pledge to provide a conciliation service, the government has announced.

Although no new details of the conciliation service were provided, the government said that it has “decided” to rename the service with the working title ‘Small Business Commissioner.’

The commissioner will help small firms who have a “contractual relationship” with a big firm that won’t pay, by offering them services like conciliation to settle the dispute out of court.

When small firms are in such a dispute, even if it relates to pre-contractual negotiations with a big firm, they will be able to get advice from the commissioner and make complaints to it.

“This delivers on the government’s pledge to deliver a small business conciliation service”, said the department for Business, Innovation and Skills.

“And [it] goes further to ensure we fundamentally tackle unacceptable payment practices that hit small firms.”

Seeming to suggest how it will do this, officials said the commissioner would report on its findings and “see where further action is needed to clamp down on unfair practices.”  

The ‘SBC’ (as it is likely to be called) follows other anti-late payment measures, such as a reporting requirement for large companies to disclose their payment policies and practices.

Although its remit is open to consultation, the commissioner will be able to use the large companies’ data to ‘name and shame’ those who are “behaving badly”, the department said.

But reactions to the commissioner are mixed, as were reactions to what it was before it was rechristened - the small business conciliation service.

“Any help that can be given to smaller businesses that suffer through late payment must be a good thing”, said the Association of Recruitment Consultancies .

The British Chambers of Commerce is not so sure. “It may help at the margins”, said the chamber’s Dr Adam Marshall. “[But it] is far from a silver bullet solution for the longstanding problem of late payment.”

The Federation of Small Businesses just hopes the commissioner is given ‘teeth.’ “We are encouraged by the government’s consultation process which will include businesses of all sizes.

“But it’s important to ensure that the new commissioner has… sufficient powers to intervene and resolve late-payment disputes in a timely and effective way.”

The federation also said the commissioner should have the power to refer poor payment offenders to the Competition and Markets Authority, if those practices are “harmful”.

Other recommendations on how the proposed commissioner can help small firms with the problem of late payment can be put to the government online or on email by August 21.

Editor’s Note: Related Reading –

Why contractors will always need the courts

Industry bodies await ‘unfair’ payment power

‘Tax lock’ is Queen Speech’s key contractor measure

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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