Freelancers are losing an estimated £16.5m annually because of the amount of time spent on chasing invoices for late payment, according to research from the association of independent professionals and the self employed (IPSE), which also warns of continuing difficulties in communicating with HMRC
IPSE says a survey of more than 830 freelancers found they spent an average of 20 days a year following up on late payments.
Chris Bryce, IPSE chief executive, said: ‘It's an absolute travesty that freelancers have to spend a working month chasing late payment. Time chasing invoices is time not working, and for some freelancers that could be the work that keeps their business afloat. The introduction of the small business commissioner this year should clean up the UK's poor payment culture, so our smallest businesses can do what they do best.’
The research also found that 41% of freelancers find it difficult to complete their annual self-assessment, spending two working days, on average, completing their tax return.
In addition, 44% of freelancers said they find it difficult to communicate with HMRC. Almost two thirds (61%) of freelancers have contacted HMRC via its advice helpline them in the last 12 months and IPSE says its research found that these freelancers lose one working day per year contacting HMRC. The cost of this to the UK economy is estimated to be over half a billion (£521m).
Bryce said: ‘Although the majority are able to complete their tax returns relatively quickly, many are spending too much time trying to get through to HMRC, and are often put on hold for considerable periods. There needs to be a much better line of communication between HMRC and self-employed people.
‘Filling out your tax return can be a confusing process, and with the introduction of quarterly tax returns just around the corner, HMRC will be under a lot more pressure. It's essential that they provide the right advice and support, and importantly, make it easy for self-employed people to reach it.’
