More than 400,000 small businesses in the UK are at direct risk of going under as late payments continue to rise.
Directors found abusing company closure rules to worm their way out of paying creditors can now be disqualified from holding future positions.
In a welcome crackdown on debt avoidance, the government has extended the powers of the Insolvency Service so it can now investigate voluntary dissolution of companies. If directors are found to have shut down their business with the primary motive of wiping off debts, the Insolvency Service can now bring misconduct charges against them.
As well as being disqualified for up to 15 years, directors could be ordered to pay compensation to unpaid creditors.
Fed up of clients who refuse to stick to agreed payment terms? Feel like you're being held to ransom by large customers who insist on making suppliers wait two or three months before they pay for goods or services received?
The government’s Small Business Commissioner (SBC) wants to hear from you. The Commissioner’s office, which is part of the Department for Business, Energy and Industrial Strategy (BEIS), is holding a consultation on SME’s experiences of late payments that closes on 15th December.
As the financial fallout of the COVID-19 pandemic continues to sweep through the economy, latest figures show that SMEs have been hit by a 20% surge in late payments over the past 12 months.
According to research from cloud-based credit management platform Know-It, the total value of overdue invoices UK-based small businesses are now waiting on has leapt to £61 billion, a sharp rise from the no less eye watering figure of £50bn reported in 2020.
In our last blog, we highlighted some of the dangers businesses face from fraudulent operators posing as legit companies, but whose real intention is just to rip you off.
So what can you do to avoid these risks? The answer is all about due diligence and knowing exactly who you are dealing with before you make a payment or sign a contract. Nowadays, formal ‘Know Your Customer’ or KYC background check services are available as byproducts of strict anti-fraud regulations in the financial industry.
But as useful as such services are, there are simple things every business can do directly for themselves to check out the credentials of any potential new client or supplier. Here are three simple steps to take to avoid being ripped off.
With incidents of fraud on the rise over the course of the COVID-19 pandemic, we’re all having to be even more vigilant in our dealings, especially online.
But while the risks of phishing scams and lax digital security are well known, companies are still very much at risk from a more traditional approach to con artistry - doing business with cowboy operators whose primary aim is to rip you off.
The government is set to take action to slam shut a loophole in insolvency rules frequently used by unscrupulous directors to escape investigation over failed companies.
Creditors have long complained that the Insolvency Service’s inability to open cases into dissolved companies has handed directors an opportunity to dodge accusations of malpractice.
It’s a sad but well-documented fact that the most unscrupulous individuals will happily try to exploit any crisis for their own gain.
So it was in spring 2020, almost as soon as the first COVID-19 lockdown kicked into gear, that there was a wave of reports of pandemic-related email and phone scams, trying on everything from fraudulent PPE sales to ‘phishing’ for personal information through bogus medical registrations.
At Safe Collections, we’ve been banging the drum on the UK’s late payment culture for years, making the case over and over again that without the stick of meaningful enforcement, there is little incentive for large companies to stop holding smaller suppliers over a barrel when it comes to payments.
Finally, it seems like the message may have gotten through to the government, although on account of the time it has taken, we can only conclude they are listening reluctantly.
When it comes to flexing its censorious muscles over what you can and cannot register as a company name in the UK, it appears that Companies House may have fallen behind the times.
The executive agency in charge of incorporating and dissolving registered commercial entities has long been known as a bastion of decorum and decency. Every year, the government body rejects a few dozen applications to set up companies on the grounds that the requested names are potentially offensive.