Tax & admin Rebecca Smith · 22 July 2015
Self-employed workers chase nearly a fifth of their earned cash as late payments
Many of the UK’s self-employed workers end up chasing 200 a month in late payments from customers who don’t have cash in hand to settle up their bills. Sole traders, including cleaners, decorators and gardeners, are following up nearly a fifth of their earned cash income each month, significantly impacting cash flow and wasting time recovering debts. Research carried out by Opinium on behalf of payment company Paym, found that from 2, 004 adults surveyed, 86 per cent agreed that paying small businesses on time was important but many are failing to do so. Some 57 per cent would prefer to pay by cash, but 44 per cent end up needing to head to the nearest cash machine, while nearly a fifth pay late. Younger demographics (18 to 34-year-olds) are more likely to have to make a dash to cash machines, with over half admitting needing to do so, while one in three of those aged over 55 said the same. They are also more likely to pay small businesses late while 17 per cent of respondents said they had paid late, this rose to 26 per cent of those aged 18 to 34. Craig Tillotson, managing director of Paym, said: Window cleaners, gardeners and decorators are facing challenges from well-meaning customers who often don’t have the cash on them to pay there and then. The most popular’sole traders used last year included window cleaners 28 per cent of people used them, followed by 20 per cent who used plumbers, 19 per cent on heating engineers and 18 per cent on car washers. The research also indicated that small firms felt the pressure of continually chasing up payments with time being of the essence for those still developing their businesses early on, 23 per cent said they had given up chasing a payment. From Paym’s study, 30 per cent of sole traders have stopped supplying a customer due to consistent late payment. Business secretary Sajid Javid recently pledged to combat the problem it is set to cost British business more than 40bn this year, with the average amount owed to a small business more than 30, 000. He announced the new Enterprise Bill will includea small business conciliation service to help tackle late payments.
ABOUT THE EXPERTRebecca Smith
Rebecca is a reporter for Business Advice. Prior to this, she worked with a range of tech, advertising, media and digital clients at Propeller PR and did freelance work for The Telegraph.