Just two per cent of freelancers and micro business owners believe that the incoming late payment tsar will successfully fix the UK’s late payment culture, according to a new poll.
Commissioned by accounting software provider FreeAgent, the survey also revealed that awareness of the late payment tsar, or small business commissioner, remained low – 57 per cent of respondents admitted that they didn’t know there was a position set to be filled.
Applications for the late payments tsar opened on 12 February, with secretary of state Margot James due to announce the final appointment after 13 March. According to the government, the appointed commissioner will become “a national spokesperson for small businesses affected by payment issues”.
Commenting on the poll’s findings, FreeAgent CEO Ed Molyneux said that while the search for a late payment tsar was a step in the right direction, the micro business community remained predominantly sceptical about the powers of such a role.
“Hardly any micro business owners believe that this commissioner will actually be successful in tackling late payment – and most of them don’t even know that the role has been created in the first place,” he said in a statement.
A lack of supply chain accountability in Britain meant that 51 per cent of invoices sent by micro business owners and freelancers were paid late in 2015, according to FreeAgent. Recent research from the Federation of Small Businesses (FSB) revealed that effective action into late payments in 2016 would have generated profit growth of 2.6 per cent for the average small business – an extra £4.8bn in economic value.
FSB chairman Mike Cherry has been particularly critical of poor payment practices and the failure to hold large firms to account, pressing for the government to address late payments “from both an ethical and an economic point of view”.
New legislation will force big businesses to publish supply chain payment records, but Molyneux added that the small business commissioner will need to take a more aggressive stance in order to win the confidence of the micro business community.
“I hope that once the successful candidate is appointed, the government will equip them with adequate powers to penalise late payers and send a message that persistent offenders will not be tolerated. It’s not enough to simply name and shame companies who are putting freelancers’ and micro businesses’ futures at risk,” he concluded.
Suffering from late payment problems? Don’t miss our expert’s guide to effectively tacking unpaid invoices.
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