IPSE, the Association of Independent Professionals and the Self Employed, has welcomed the announcement that big businesses have committed to tackle late payment but says the move must be met with concrete action.
Simon McVicker, Director of Policy and External Affairs at IPSE, said:
"We welcome the recent moves by businesses to tackle the scourge of late payment, which is crippling microbusinesses across the UK on a regular basis. However, to truly put an end to the problem we need to see concrete action and statutory measures to change the culture around payment. Big businesses have promised before to address this issue and yet nothing really changes, it persists in damaging the livelihoods of the UK's self-employed.
"To really make a difference we believe the prompt payment code must be strengthened significantly. Signatories must commit to paying above the legal minimum interest on late payments and publish regular reports on their performance.
"The self-employed are in a catch-22 situation of relying on payment to keep their business afloat but are not able to aggressively chase their clients without jeopardising future contracts. To tackle this, we believe the Government should create a small business conciliation service to resolve disputes. It is also critical that the legal sanctions against anyone who pays late are made much more severe, with the worst offenders subject to heavy fines.
"It is crucial that payment terms are fair for both the business and the supplier. Ninety day payment terms are simply not acceptable and we believe no one should be paid more than 30 days beyond their agreed date."