The Federation of Small Businesses has revealed that half of the small business owners and sole traders it surveyed reported being paid late and one in five said that the issue was getting worse.
The federation surveyed 1,300 small businesses and sole traders between April and June this year for its quarterly report which has sparked growing concerns that late payments will continue due to the cost of living crisis.
Craig Beaumont, chief of external affairs at the federation, said: “There must be a mix of positive and negative actions, carrot and the stick, to make a real difference to the UK’s poor payment culture. Otherwise we will continue as we are, with half of small businesses not getting paid and many saying the situation is deteriorating.”
The findings have prompted calls for the government to do more to clamp down on late payments with the freelancers’ body, The Association of Independent Professionals and the Self-Employed (IPSE) calling for 30 day payment terms to become standard. Andy Chamberlain, the group’s director of policy, said “the government needs to step up” to tackle the issue.
In October 2020, new powers were proposed for the small business commissioner such as the ability to fine poor powers. However, it has been reported that these have yet to be acted upon and while the commissioner issues report that “name and shame” businesses guilty of poor payment practices, it has not done so since February 2020.
Liz Barclay, the small business commissioner, told The Times that she was determined to speed up payments for small suppliers. “If we get a complaint, investigate and find that publishing a report is appropriate, we will do so,” she said.
