Late payments: better late than never?


The self-employed are the smallest of small businesses. Too often in my time at IPSE I have heard about the difficulties of settling a dispute over late payment, intellectual property or a contract, to name but a few.

Perhaps the most common dispute the self-employed face is late payment. In fact, a recent YouGov survey showed that 85 per cent have experienced this problem over the last two years. In such circumstances, small businesses and the self-employed often cannot afford to resort to court action, either because of the expense or the reputational damage it would cause. And although commercial negotiation is possible, the reality is this doesn’t usually work either.

The self-employed often have little power to resolve disputes with larger clients, as the balance of power means disputes will tend to favour the larger party. This can cause serious damage to a small firm’s cash flow, especially those who depend on their payment on time to fund their work.

Due to this happening far too often, IPSE proposed and campaigned for the UK government to introduce a Small Business Commissioner and to our delight they have agreed. The government is now consulting on the scope and powers the commissioner should have.

A commissioner gives small businesses an independent body to help settle disputes. If set up in the right way it will provide a conciliation, arbitration, advice and dispute resolution service.

In the next instalment of the Late Payments series, we take a look at the Small Business Commissioner model already operating in Australia…