The government will unveil its long awaited small business plan on Thursday with measures including a crackdown on late payment of invoices and more money for funding schemes to support small business owners.
Claiming that by accelerating the growth of SMEs by just one percentage point per year could deliver £320bn to the UK economy by 2030, the Department for Business and Trade described the late payment changes as “the most significant legislative reforms in 25 years”. Overdue invoices cost the UK economy £11bn a year and shuts down 38 businesses every day.
The Small Business Commissioner, currently Enterprise Nation founder Emma Jones, will be given powers to fine big companies that persistently don’t pay on time.
The commissioner will also be able to carry out spot checks and “enforce a 30-day invoice verification period to speed up resolutions to disputes”, with new legislation introducing maximum payment terms of 60 days, reducing to 45 days, and audit committees being legally required to scrutinise payment practices at board level in large businesses.
The new powers for the Small Business Commissioner are subject to a government consultation on late payment.
Small business access to finance
To address small business access to finance, the government is providing the British Business Bank with £4billion in funding.
That includes £1billion for the Start Up Loans scheme to deliver 69,000 new loans, and the capacity of the ENABLE Guarantees programme, which is designed to encourage lending to smaller businesses, will be increased from £2bn to £5bn.
Other measures in the plan that have already been announced include:
- Hospitality zones and licensing reforms to cut red tape for the hospitality and arts sectors.
- High street rental auctions to fill vacant high street premises.
- A revamped board of trade to help more small firms to export.
- The government’s new Business Growth Service to bring together small business support programmes.
- Permanently lower business rates multipliers for retail, hospitality and leisure businesses.
Prime minister Keir Starmer said:
“From builders and electricians to freelance designers and manufacturers—too many hardworking people are being forced to spend precious hours chasing payments instead of doing what they do best – growing their businesses.
“It’s unfair, it’s exhausting, and it’s holding Britain back. So, our message is clear: it’s time to pay up.
“Through our small business plan, we’re not only tackling the scourge of late payments once and for all, but we’re giving small business owners the backing and stability they need for their business to thrive.”
Business and trade secretary Jonathan Reynolds said:
“This country is home to some of the brightest entrepreneurs and innovative businesses in the world, and we want to unleash their full potential by giving them back time and money to do what they do best – growing our local economies.
“Our small business plan – the first in over a decade – is slashing unnecessary admin costs, making it easier for businesses to set up shop and giving SMEs the financial backing they need.”
The full small business plan will be released on Thursday (31 August) morning. I will provide full coverage and a guide with what you need to know.
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