The Small Business Commissioner

In August we provided guidance on the introduction of the Small Business Commissioner (SBC) and complaints scheme that they would be fronting.

On 2 October 2017 Paul Uppal was appointed the first SBC. Mr Uppal has over 20 years' experience as a small business owner in the real estate sector. He has experienced many of the challenges that late payments can present for small businesses. The new complaints scheme is designed to address these challenges.

Principle Duties of SBC

The office of the SBC will have the two main duties:

  1. To provide general advice and information to small businesses; and
  2. To consider complaints from small businesses in connection with the supply of goods and services to larger businesses.

The SBC's primary function is to reduce disputes between large and smaller businesses. This is intended to lessen the impact that late payments can have on cash flow, order realisation and in some cases, solvency. As a result of this broad role the SBC has the potential to impact on businesses of all sizes. This is because some businesses will be able to make complaints, while others could be on the receiving end of a complaint.

Reporting Obligations of Large Companies

From April 2017, large companies and LLPs have been required to publish information on their payment practices and performance twice yearly on a government-provided website. The report should provide:

  • descriptions of payment terms;
  • statistics on payment practices;
  • the average time taken to pay invoices;
  • the percentage of invoices paid within the reporting period in 30 days or less, between 31-60 days, and over 60 days; and
  • the proportion of invoices not paid within the agreed terms.

Crucially, the office of the SBC will have the ability to "name and shame" businesses that have not followed fair and reasonable payment practices. This failure may have come to light through the company's own reporting (as per the above requirement) or due to a complaint from an aggrieved small business.

Before submitting a written complaint to the SBC, the small business must have raised the complaint with the larger business. This should afford them a reasonable opportunity to resolve the problem.

Should this not have brought about a satisfactory resolution, a complaint can be raised with the SBC. Consequently the SBC will consider whether the acts or omissions were "fair and reasonable". The SBC will there after report their findings and make recommendations. Whilst not legally binding, the reputational impact on the larger business should they come up short in their payment practices should mean that the SBC's recommendations bear some weight.

The Bigger Picture

Naming and shaming and taking an offender to task is only one side to the role of the SBC. Encouraging a culture change in how businesses deal with each other is perhaps the ultimate aim. The SBC could therefore play a key role promoting good business to business practice and supporting the success and growth of small businesses across the country.

There have been a number of attempts in the past to redress the balance in the relationship between small and large businesses. It will be interesting to see what impact the SBC has.

Further information on the reporting duties of large companies can be found in our previous blog here:

Further information on the Small Business Commissioner complaints scheme can be found in our previous blog here: