If you have worked as a contractor or freelancer, putting in those hours to earn your crust, only to have a delay in payment being made, chances are you weren’t best pleased. Contractors and freelancers have bills to pay as well you know!
Regardless, it seems that being paid on time should not only be a common courtesy, but standard practice for all companies that use contractors or freelancers.
Well the good news is that this is more likely to be the case going forward, following small business minister Margot James’ announcement that failure to report how quickly large companies pay their suppliers will soon be a criminal offence.
The Department for Business, Energy and Industrial Strategy has said that from April 2017, large companies and limited partnerships will have to publically report twice a year on their payment practices and performance. This will include the average time taken to pay supplier invoices.
The move has received the backing of the Association of Independent Professionals and the Self Employed (IPSE). The association recently released research which found that the average freelancer spends 20 days each year chasing up the payments they are owed for the work they have done. Staggeringly, this equates to more than £16 billion in lost income.
“It’s outrageous that the average freelancer spends 20 working days chasing invoices each year,” said IPSE’s senior policy adviser Adam Waters. “Time chasing invoices is time not working, and for some that could be the work that keeps their business afloat. It’s good to see the Government finally clamping down on late payment, an issue which has long hampered the income of the UK’s smallest businesses. Government must now ensure the Small Business Commissioner, set to come into action this year, is given appropriate powers to tackle late payments and settle disputes quickly. This is vital in improving the UK’s payment culture for the 4.8 million self-employed.”