Official Crackdown on Late Invoice Payments

So serious are late invoice payments for SMEs that the government is in the process of appointing a Small Business Commissioner tasked with tackling complaints. Edward Garston explains.

Although the Enterprise Act 2016 established the role, the Department for Business, Energy & Industrial Strategy (referred to simply as BEIS) has only recently published its response to the consultation which has clarified important aspects of the SBC’s remit.  For example, only those small businesses employing less than 50 staff will be eligible to use the SBCs services.  In calculating the figure all agency workers and secondees are excluded, but apprentices will count.

Complaints must be lodged within 12 months of the date of the incident complained of, although the deadline can be extended in certain limited circumstances.  In deciding a case the SBC will be required to consider how the business complained of has reacted to any previous recommendations.  Once decided, the SBC may name and shame offenders by publishing its report, which BEIS recommends in the case of frequent offenders.

Sadly, SMEs suffering with long overdue invoices will have to wait until 1 October before the complaints scheme formally commences.  In the meantime, some relief might be offered in the form of a requirement pursuant to the Reports on Payment Practices Regulations for large companies to annually report on their own payment practices and policies for suppliers, which is widely expected to apply from 6 April.

MORE INFORMATION 

If you are an SME and require further advice on late invoice payments, please contact Edward Garston, a Senior Associate in the Company Commercial Department. Call on 01708 229444 or email edward.garston@pinneytalfourd.co.uk.

This article was written by Edward Garston, a company commercial solicitor at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of March 2017.