The scourge of late payment is affecting Self Employed workers and Freelancers across the UK according to one source. The average amount owed to self employed freelancers has risen to £5,230 in 2022.
Andy Chamberlain of The Association of Independent Professionals and the Self Employed (IPSE) has highlighted that the problem is bigger than ever today and worsening. Small Business late payment is challenging enough but Self Employed freelancers and suchlike are very often living on the breadline.
Not getting invoices paid on their due dates can have a huge negative impact on Small Businesses and Self Employed. Whilst the mainstream media focuses on the cost of living crisis, the self employed and not been paid sector are being hit hard. Unpaid invoices are crippling the finances of many self employed workers, as much as 1 in 5.
The late payment crisis is so bad for some that they have little or no money to cover basic living expenses.
Unpaid invoices causing mental health decline
Late payment causing mental health issues for many self employed people. According to reports from the IPSE, 49% of self employed freelancers have felt anxiety due to unpaid invoices. Many have also stated that it has affected their productivity also, creating a two fold effect.
A number of freelancers also said they have lost sleep worrying over unpaid invoices and questioned their careers.
A failure to combat the problem
Restricting the problem of non payment of invoices has always been a challenge for the Self Employed and Small Businesses. Despite previous government reforms to try to prevent late payment such as the prompt payment code, things are worsening. The average amount owed to self employed freelancers has climbed to a new high and action needs to be taken.
Latest research from IPSE shows that 35% of self employed workers have not been paid on time within the last year and nearly 1 in 5 self employed freelancers saying they have waited well over three months to get paid on some jobs.
Late payment crisis solutions
IPSE has called upon the government to step up and improve previous reforms by making businesses more accountable for non payment and penalising them. In the USA, there is a ‘Freelance isn’t free’ law. This was introduced in 2017 and forces companies to pay self employed workers within 30 days.
The IPSE claims that the UK needs to implement its own version to protect freelancers and self employed workers.
Whilst many Self Employed contractors have not been paid on time, many have turned to Professional Debt Collection Agencies for help. This ensures they are getting paid and whilst there maybe a small cost to them, this is viewed by most as an essential strategy to ensure they get their voices paid on time. Debt Collection for freelancers has never had a more important role to play.