Problem 'getting worse'
New commissioner urged to tackle late payments
Firms rely on customer paying on time
Sole traders group IPSE has urged the new Small Business Commissioner Liz Barclay to take a tougher approach to late payments, claiming the issue has become worse during the pandemic.
Research by IPSE (the Association of Independent Professionals and the Self-Employed) has shown that over a third of freelancers (36%) have been affected by an increase in late payments during the pandemic.
It also found one in six (17%) freelancers were left with no money to cover work-related expenses or basic living expenses (15%) as a result.
Derek Cribb, CEO, said: “Late payment is a challenge for freelancers at the best of times, but during the pandemic it can be a crippling problem.
“Liz has been a good friend to us and a great ally of the self-employed for many years, and we know she will work with us to tackle this challenge and ensure all self-employed people promptly receive the payment they deserve and need.”
Ms Barclay has a long history of campaigning for social justice, consumer rights and personal finance and has been a presenter of BBC Radio 4’s consumer affairs programme You and Yours.
She will take over from interim commissioner Philip King just as the office is expected to be given greater powers.
She takes up her post on 23 June and will be the first female Small Business Commissioner, a post which was created in 2016 to help small businesses secure the payments owed to them and to galvanise UK businesses behind a new culture of prompt payment.
The Department for Business, Energy and Industrial Strategy, said Ms Barclay would spearhead the national effort to crackdown on £23.4 billion of delayed invoices – which cause thousands of small businesses to close every year.
Ms Barclay said: “We need a real culture change around business payments in the UK to take pressure off our phenomenal entrepreneurs.
“People who have already delivered goods and services have to be able to turn their attention to their next client and next order rather than chasing up late payments and worrying about their cashflow. I know from personal experience how damaging that can be to mental and emotional health.
Small Business Minister Paul Scully said: “Having run small businesses for most of my professional life I know just how toxic delayed invoices can be, causing needless uncertainty as business owners chase payments which should have been made weeks or even months ago.”
Ms Barclay’s appointment is the latest in a suite of actions which the Government has taken to address the issue of late payments.
Last year, the Government consulted on new powers for the Commissioner, including the power to order payments, levy fines and open investigations based on third-party information. The responses to the consultation and further proposals will be published in due course.
In January this year, the Government also announced reforms to the Prompt Payment Code, a voluntary scheme whereby businesses commit to paying their partners in good time, driving further culture change and encouraging businesses to address their practices.