The UK's most dyanmic and innovative small businesses face a trio of doom, with rising wages, rising National Insurance bills and the fear of Trump's tariffs, admits Liz Barclay, the government's Small Business Commissioner.

In her latest blog Tough Times, Barclay said small businesses were also losing sleep because larger companies were holding on to their cash at a time when companies were feeling the effect of Chancellor Rachel Reeves' decision to raise National Insurance rates for employers from this month. She said: "Times are additionally tough as firms face increased wage and National Insurance bills and wonder if tariffs will affect them. Many are having to increase prices to customers who themselves are strapped for cash."

The Small Business Commissioner (OSBC) is an independent public body set up by Government under the Enterprise Act 2016 to tackle late payment and dodgy payment practices in the private sector. It covers the whole of the UK - England, Wales, Scotland and Northern Ireland.

Barclay was made head of the Small Business Commissioner in 2021 to help make sure larger companies paid their smaller suppliers on time.

In her latest post, Barclay used the example of a company that was owed £72,000.

She wrote: "If you’re running a big business, you may not lose sleep over £72,000. For a small, micro or even a medium business however it’s significant. There are all sorts of things you can’t do when you’re waiting for money to come in and it’s overdue.

"[Small firms] can’t get invoice financing or any other kind of funding to bridge the gap and have already used up their overdraft and credit card limits, plus borrowed from friends and family who are cash strapped themselves before they come to us. While the bigger customer holds onto £72,000 of free finance the small supplier can’t pay their own bills, wages, or suppliers and can’t pay themselves a wage, so the household struggles with the business."

Barclay urged larger companies to make sure they paid their suppliers on time, saying: "There is a long list of other things that a smaller supplier can’t do while the bigger customer holds onto their money: invest in skills, retraining, people, buy new to replace out of date machinery or equipment, think about plans to reduce carbon emissions, plan for the future, innovate and create jobs."

She added: "The person who contacted us who is owed £72,000 is in the process of having their home repossessed and they’re not alone. Another business owner told me he and his wife who also works in the business had eaten the last of the dried pasta at the back of the cupboard. It wasn’t a joke. A letter from the bank threatening repossession of their home followed on Wednesday."

Barclay said the UK's agile, creative, innovative small businesses are being pushed to the brink by bigger customers holding onto their money, adding "we must do better".

She said: "Our small businesses are losing sleep because they’re not getting money into their accounts when they expect it and can’t manage their cashflow. Times are additionally tough as firms face increased wage and National Insurance bills and wonder if tariffs will affect them. Many are having to increase prices to customers who themselves are strapped for cash."

Barclay said together businesses big and small can get through this tough patch to the benefit of all, but there is the need of understanding "each other’s processes better and communicate better".