Late payers to be named and shamed

Paul Uppal

The study by Lloyds Bank Commercial Banking, in partnership with the commissioner, found that in Scotland nearly one-third (31 per cent) of payments owed to small firms by larger business customers are paid after the commissioner’s recommended 30 days, and across the UK 21 per cent take more than 50 days.

Big companies have been required to report their payment practices twice a year since 2017, although many are yet to disclose details.

The data will be used to highlight repeated late payers and give them a red light, allowing suppliers to avoid them if they choose. Those that fail to report their payment terms will also receive a red.

Late payment is often identified as the biggest issue facing small businesses and has been cited as a cause of anxiety and depression among company owners. The Federation of Small Businesses estimates that large companies neglecting to settle their bills causes about 50,000 businesses to fail every year.

The traffic light system proposed would help small firms to identify which large businesses habitually pay their bills late.

About £2 million has been secured for small and medium-sized enterprises around the UK since Mr Uppal took up his post in late 2017.

Mr Uppal announced the milestone during a recent visit to Aberdeen.

He said yesterday: “The effect of late payment on Scottish small firms can be devastating.

“It impedes business growth, but also has an impact on the lives and mental health of those running small firms.”

Legislation introduced in April 2017 required all large businesses in the UK to publish their payment practices.

Mr Uppal said: “Some businesses have now made two reports.