Stubborn scourge of late payment hasn’t shifted, 72% of contractors say

More than seven in ten contractors say the problem of late payment has not improved by one iota in the last two years.

The finding from IPSE and Workwell will make uncomfortable reading for the Small Business Commissioner’s Office, which Liz Barclay took over in 2021 to “lead a crackdown on late payments.”

But as many as 72 per cent of contractors told pollsters commissioned by the two contractor organisations that the issue of not being paid on time has “not changed” in the last two years.

'Half of contractors see fifth of income paid 20 days after the due date'

Around half (49%) of the contractors said at least some of their annual income -- typically a fifth of the total -- is paid at least 20 days late.

A separate third or thereabouts (36%) said at last some of their income is 30 days late and on average, they estimated it hits 20% of their invoicing.

Gloomy as they are, the findings don’t surprise Adam Home, a senior collections manager at Safe Collections, who writes today about late payment exclusively for ContractorUK.

'What you gonna' do?'

According to Home, part of the reason late payment has stubbornly not shifted for 72% of contractors, may be that while recovery mechanisms like both himself and the SBC may have helped, late payers have become more sophisticated.

And more brazen.

In fact, in the instance Home shares today, a recruitment agency which he tracked down for an unpaid contractor, laughed at being told to pay up while threatening, “"What you gonna' do?"

'Biggest mistake is not doing anything'

One silver lining of the IPSE-Workwell findings is that being out-of-pocket for 60 days affected the smallest chunk of respondents.

But a still significant 26% reported such two-month delays solely to get paid for services rendered.

“The biggest mistake people make with their credit control [is] not doing anything,” advised Helen Arney, an invoice recovery expert at HJA Business Solutions.

“It’s always one of those things on the list ‘to do.’ [But suddenly] the days speed into weeks and before you know it, your approaching due invoice is now 60 days overdue.”


Chris Mollan, head of accountancy services at Workwell, says it is “concerning” that so few contractors have seen any improvement in late payment “and that for many [of those], invoices are at least 60 days overdue.”

“Late payment has always been a major issue for contractors, freelancers and those running their own businesses,” Mollan acknowledged yesterday. “But it is worrying that nearly half are concerned about late payments, particularly given the current economic climate with bills and mortgages rising.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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