Freelance body backs new offence targeting late payers

Concerns from freelancers’ advisers that clients who regularly pay late will get off scot-free seem to have been allayed, by a government pledge to criminalise those who flout new rules.

In fact, large companies and LLPs will be committing a criminal offence if, from April, they neglect to report twice yearly the average time it takes them to pay their suppliers’ invoices.

Freelancers can spend up to 20 days a year chasing unpaid invoices, said the Association of Independent Professionals and the Self-Employed (IPSE), welcoming the new offence.

“Time chasing invoices is time not working, and for some that could be the work that keeps their business afloat,” said IPSE senior policy adviser Adam Waters.

“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.”

Under the clampdown, the directors of large companies and LLPs will be liable to a fine on criminal conviction if their outfit fails to publish a payment practice report, twice a year.

All such directors will be liable from April, unless they can show they took “all reasonable steps” to ensure the requirement to publish would be met.

Guidance issued to the parties who will be liable also makes it an offence to publish “false or misleading information”; with convictions and fines for people or firms that do.

However, IPSE believes that the government should go further. “[They] 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,” Mr Waters said. “This is vital in improving the UK’s payment culture for the 4.8 million self-employed.”

 

2nd February 2017

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