Late Payments in the UK

Chasing payments that are overdue, or delayed by long payment terms or changes to contractually agreed terms, is a struggle. Sadly, it’s all too familiar to many small businesses in the UK. Many come to accept delayed payment as a normal way of working. It is demanding, time-consuming and demoralising to constantly manage payments and cash flow. Ultimately small suppliers often feel powerless to challenge the bigger customers that pay them late.

Established under the Enterprise Act 2016, the Office of the Small Business Commissioner (OSBC) has the task of helping small business owners throughout the UK deal with the impact and possible consequences of poor payment practices.

Through the provision of free information and advice, and a programme of lobbying and influencing large business stakeholders, the OSBC works to keep payment issues at the forefront of UK business discussions.

Small Business Commissioner Liz Barclay says: “It’s okay for small businesses to ask for help, and it’s right for them to complain when they’re being exploited by their large customers. I’ve talked to large businesses over the past few months and it’s apparent that this is an issue that’s rising up their agenda. Improving the way they treat their small suppliers is a key priority.

“Everyone needs to understand that having to wait for payments to come in damages small businesses and the wider economy. The uncertainty can also have a huge impact on the mental health of business owners. An invoice paid late can lead to the mortgage not being paid or employees waiting for their wages. The link between late or long payments and mental health is real and worrying”.

The OSBC offers free help to small businesses in the UK who are facing late or unfair payment practices at the hands of larger clients. The team of expert caseworkers can provide:

• General advice and information about resolving payment disputes.
• A signposting service to further support, and to dispute resolution services through the OSBC’s own website.
• A complaints investigation service focused on incidences of poor payment practice between small businesses (those with 50 or fewer staff) and their larger business customers (those with more than 50 staff).

The OSBC has the power to make recommendations relating to these complaints and help with dispute resolution.

Investigations will be treated anonymously if requested.

Since its establishment in 2017, the OSBC has recovered almost £8million owed to small businesses due to poor payment practices in larger firms.

The OSBC’s casework team can be contacted by phone or email. All enquiries will be scrutinised, and an initial response should be provided within two working days. Email the team at enquiries@smallbusinesscommissioner.gov.uk, or call to speak to a caseworker on 0121 695 7770.

Further help and information can also be found on the SBC website.