IPSE supports calls to end late payment

Thursday 22 January 2015

The Association of Independent Professionals and the Self Employed (IPSE) is supporting calls from the Federation of Small Businesses (FSB) and the Institute of Directors (IoD) to put a stop to late payment.

Recently, the FSB led a cross-parliamentary roundtable on the subject of supply chain bullying, discussing the fact that small businesses can be subject to poor payment practices from larger firms.

This followed on from research that the FSB conducted, which found that close to one in five small businesses had been subject to poor payment practices. Among these practices was that of late payment.

Indeed, late payment can often be problematic for a number of self employed professionals, including limited companies, umbrella company contractors and sole traders.

Joining in with the roundtable was the IoD, which said that late payment can be damaging to small to medium-sized enterprises (SMEs) and could lower the strength of the economic recovery. Its own research in December found that two thirds of its members from SMEs had faced late payment and one in eight had seen customers change payment terms.

IPSE has voiced its support of the actions of the FSB and the IoD, saying that it stands with them in tackling the issue of late payment.

Director of policy and external affairs at IPSE Simon McVicker said: "Late payment is inexcusable, shameless and completely unfair. Independent professionals don’t receive regular income like employees and therefore rely on being paid on time to keep their business afloat."

IPSE has previously released a manifesto on how policies can be adapted to make improvements for small businesses. Late payment is one of the issues at the forefront of the manifesto.

This has been sent to the government and one of the proposals that has been acted upon is setting up a small business conciliation service and enforcing the Prompt Payment Code. However, IPSE says that more pressure needs to be put on big businesses to make sure they pay their suppliers on time.

A survey by ComRes, which was commissioned by IPSE, found that the general public have overwhelming support for tackling the issue of late payment. A total of 1,000 employees and self employed professionals from the most marginal constituencies in the UK were asked about whether rules to prevent late payment should be strengthened and 79 per cent voted in support of this. What's more, 78 per cent of respondents said that a method should be developed to allow small businesses to settle disputes without having to resort to court action.

Mr McVicker said: "Our research shows that the general public overwhelmingly support proposals to end the scandal of late payment and we hope big businesses will wake up to public opinion.

"Late pay means microbusiness owners get caught in a catch-22 situation - they rely on regular pay but can’t excessively chase payment because it ruins relationships. We will continue to work with Government and business to ensure the culture of payment is radically changed across the board."

By Victoria McDonnell

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