Freelancers forego £1,800 in unpaid invoices
Freelancers and micro-businesses are being forced to write off an average £1,804 from unpaid invoices each year, FreeAgent has found.
The accounting software firm said that as there are 5million such businesses in the UK, the total that the country’s one-man bands write off in unpaid invoices could be as much as £9billion.
Based on this mountain of outstanding invoices, the firm’s bean counters said they estimate that an additional £800m sales tax could be lost to the Treasury each year.
“It’s possible that some business owners may be incorrectly writing off some of their invoices,” said FreeAgent’s chief executive Ed Molyneux.
“[But] there are likely to be many more who are still holding out hope for payment and have not yet written them off as bad debt.”
As a result, the actual amount of ‘lost’ money – both for firms and the government – “may be much greater,” said Mr Molyneux, a former freelancer.
To come up with the research, FreeAgent looked at all invoices that were sent between 1st April 2014 and 31st March 2015 by a sample of its UK subscribers.
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2nd May 2016