As Small Business Commissioner, I invite unpaid limited company contractors to come forward

The July 31st launch of the Small Business Plan saw the release of research on the impact of late payments, showing 38 companies go out of business every day due to unpaid invoices.

Such small business owners spend 86 hours chasing debt, with late payment incurring an £11billion cost to the economy, writes Emma Jones, the UK’s Small Business Commissioner.

My invite for contractors and other ContractorUK readers to come forward

Alongside the research was a call for input into a consultation of anti-late payment proposals which I’m here inviting limited company contractors to respond to.

Now open, the consultation is on potential new powers for me, the Small Business Commissioner (SBC), to issue penalties to repeat offenders, apply mandatory interest on late invoices, and a move to maximum payment terms of 60 days, moving to 45 days over the next five years.

There are also measures being considered to prevent invoices from being deliberately disputed to lengthen payment times.

Like directors, sole traders should benefit from this late payments crackdown

These proposals, and the current work of the Office of the Small Business Commissioner, will help businesses of all sizes, including sole traders.

We are on a mission to get money moving faster through the UK economy and more quickly through supply chains.

The released research shows that large companies are the longest payers, so ensuring they pay on time will benefit the whole supply chain, including contractors.

A medley of new reporting requirements, annually and at board-level

There are then further measures which will ensure that businesses know more about the payment practices of the large companies they contract with, including the requirement to report their payment practices, and report how late they pay and the interest due.

In addition, there are proposals to ensure payment practices are reported in annual reports and considered at board audit committees.

There will then be a wider range of powers to deal with those that don’t pay.

It’s proposed that the SBC will be able to launch investigations into companies that continually pay late and be given the power to arbitrate disputes and levy fines.

My take as Small Business Commissioner, on this anti-late payment package

This is a comprehensive set of proposals that increase the requirements on large business, and provides new powers to tackle late payments.

It’s important that the proposals are properly considered and consulted on in order to be effective, and that’s why there are a wide number of questions in the consultation (“Late Payments: Tackling Poor Payment Practices”.

Please respond to the late payments consultation

Given its reach, there are a large number of organisations with an interest, including sole traders and one-person limited companies, who I invite to respond to some or all of the questions.

Alternatively, these parties can provide feedback to trade associations or networks that will be responding on behalf of their members. The consultation will be open for 12 weeks (until October 23rd) to give people ample time to respond, and we look forward to hearing from a wide range of interested parties. 

But as Small Business Commissioner, I’ll be taking action way before October 2025…

In the meantime, my work continues on speeding up payment terms and times for small firms, through our focus on digital adoption, largely based on evidence that businesses using tech tools get paid faster. And I’ll be encouraging more firms to apply to the Fair Payment Code as the ideal route to showcase good payment practice. Last but not least, I’m also advocating active communications to build a positive payment culture, which gets us to a place where paying suppliers on time is seen, quite simply, as the right thing to do.