IPSE welcomes new Small Business Commissioner and calls for stronger action on late payment

IPSE warmly welcomes the appointment of Emma Jones OBE as the new Small Business Commissioner. We look forward to working closely with her to improve prompt payment practices across the UK. 

Having collaborated with Emma during her time at Enterprise Nation, we know she will bring her trademark energy, dedication, and passion to this role.

Late payment remains a serious and widespread issue for freelancers throughout the UK. It’s especially frustrating when companies already have the technology to pay invoices almost instantly – but choose not to.

Our research reveals that one in five freelancers have been left unable to cover basic living expenses due to delayed payments. Even more concerning is that the average amount owed to freelancers has continued to rise, reaching £5,230 by the end of 2022.

The recent update to the Fair Payment Code is a positive step and a testament to the work of outgoing Commissioner, Liz Barclay, whose tireless efforts over the last four years deserve great credit.

The new code introduces much-needed accountability. Companies that delay payments beyond 30 days now face the risk of reputational damage, and the introduction of gold, silver, and bronze awards for prompt payers adds an extra incentive for larger businesses to act responsibly.

However, the code remains voluntary. Businesses are under no legal obligation to participate, which limits its effectiveness. One of Emma’s key challenges as the Small Business Commissioner will be to raise awareness of the code and grow the list of signatories – a goal we are committed to supporting.

While the updated Fair Payment Code may encourage some companies to improve their payment terms, we have to be honest that perennial poor payers can still ignore it altogether.

That’s why IPSE is calling for the Small Business Commissioner to be given stronger enforcement powers. Specifically, we want the Commissioner to be able to investigate repeat offenders and issue penalties or fines. With this kind of authority, businesses would be compelled to take prompt payment seriously.

Current legislation allows businesses to agree on payment terms longer than 60 days, provided they are “fair” to both parties. But in practice, this is too easily ignored. Many freelancers are forced to accept 60-day terms, or even longer – on a take-it-or-leave-it basis by powerful clients.

Worryingly, 90-day and even 120-day payment terms are not unheard of. 

That’s why IPSE is calling on the UK to adopt Belgium’s approach: making any contractual payment terms exceeding 60 days automatically null and void, thereby defaulting to a statutory maximum of 30 days.

We continue to raise this proposal in our conversations with government as we believe it would eliminate the possibility of exploitative payment schedules altogether.

Chasing unpaid invoices can be exhausting – but you don’t have to face it alone.

You can access template reminder letters to chase overdue invoices professionally, get advice from legal helplines about recovering debts, and access a hub of resources to help get your contracts right from the start.