The trade association representing freelancers and self-employed professionals, including many making use of a Canary Wharf accountant, Professional Contractors’ Group (PCG), has suggested that the government opens a “witness protection” telephone hotline, through which firms failing to pay in time can be reported.
The body made the call while welcoming plans to allow the naming and shaming of non-paying customers by smaller firms, with a consultation on means of tackling late payments among the four million UK businesses having recently been announced. It is news that will be welcomed by many of those using a Canary Wharf accountant, as it represents a significant acknowledgement of one of the biggest problems facing the freelancing profession.
With freelancers being the smallest businesses in the UK, they also tend to have the greatest scarcity of resources, meaning that they disproportionately suffer when clients fail to pay in a timely manner. Many of those benefitting from a Canary Wharf accountant will be familiar with the major cash-flow problems that can occur in the wait for payment, and in the worst case scenario, it can mean everyday tasks at work and home coming to a halt.
However, PCG did express concern about the potential adverse consequences for small businesses and contractors calling out larger businesses when they did not pay promptly. For freelancers, the relationships that they enjoy with clients are paramount, and it might not help them to be seen to complain about customers. As chief policy director at the Confederation of British Industry, Katja Hall has pointed out, such fears of damaging customer relations prevents many firms from using the means of redress that already exist.
No doubt many of those using a Canary Wharf accountant will agree with Simon McVicker, PCG director of policy and public affairs, that “Anything that puts the prospect of future contracts and recommendations in jeopardy would be disastrous for independent professionals who live or die by the strength of their client relationships. The last thing we want to see is blacklisting of those micro-businesses who are brave enough to speak up when big businesses do not pay within a reasonable time frame.”
This has led the organisation to suggest that an alternative system is considered by the Department for Business, Innovation and Skills (BIS), whereby big businesses can be anonymously reported by small firms in the event of failure to pay within a “reasonable time frame”. According to the government’s own figures, struggling to receive payment from a customer is a problem with which 85 per cent of the UK’s small and medium-sized enterprises have been familiar in the past two years, suggesting the scale of the issue.
Over the summer, it was suggested by business secretary Vince Cable that late-paying companies could be subject to fines, and current clients of a Canary Wharf accountant will be interested to see that this proposal is featured in the present BIS consultation document.