Late payment: Do you know your rights?

Over half of the UK’s self-employed freelancers have worked for free because of late payment or unpaid invoices, new research has found.

The study, compiled by freelancer platform YunoJuno, found that 55 per cent of the UK’s self-employed have done work they have never been paid for.

The study also found that there is a lack of understanding when it comes to late payment. Over half of self-employed people do not understand their rights when it comes to unpaid invoices, and a fifth said they are not confident enough to enforce late payment charges.

What are your rights?
The Late Payment of Commercial Debts (Interest) Act 1998 allows you to claim costs outlined in your invoice alongside any compensation. Even if this was not stated in your payment conditions, you could get compensation against public sector organisations and businesses with more than 50 employees. You can now also claim up to eight per cent interest on payments from other small businesses, starting from the day after the last day it should have been paid.
Click Here

Nearly a quarter of self-employed people admit to continuing to work for businesses despite drastically overdue invoices, with one in ten freelancers saying they do nothing when a client pays late.

Despite the rights freelancers have when it comes to late payment, only seven per cent of freelancers add a late payment charge to their contract, with a quarter of this group admitting they never implement these rules.

Regardless of how aware freelancers are, it’s the companies who pay late who are at fault. The research found that 41 per cent of companies who use freelancers consistently pay late – by an average of two and a half weeks (18.5 days). This delay is felt acutely by freelancers who, according to research by IPSE, lose an average of 20 days a year chasing unpaid invoices.

It seems that those working in the creative industries are some of the worst affected, with Modern Work recently reporting that freelancers in the creative industry are owed £1.1 billion in unpaid invoices.

Top tips to tackle late payment:

  • Consider using apps like Pandle, which automates the process of chasing and reminding clients to pay.
  • Improve your payment terms – consider reducing the number of days clients have to pay to 14.
  • Consider a discount if clients pay on time. Adam Kay, who recently spoke at IPSE’s Freelancer of the Year Awards, recommended adding 10 per cent to your fee, and then offering a 10 per cent discount if the client pays on time.

Leave a Reply

avatar
  Subscribe  
Notify of
error: Our content is protected