• Four in five ( 79 %) have experienced customers refusing to pay for work
• Almost a quarter ( 24 %) of tradespeople have written off withheld payments as losses
• More than a fifth ( 23 %) say withheld payments have led to difficulties paying employees
Tradespeople in the UK are losing thousands of pounds every year due to customers withholding payments , and the problem is getting worse , according to new research .
A study by IronmongeryDirect , the leading specialist supplier to the trade , surveyed workers across the country to discover the scale of the problem and how it is impacting businesses .
It found that almost a fifth ( 19 %) of tradespeople experience withheld payments five or more times a year , compared to just 12 % when the research was done before in 2021 .
Overall , around four in five ( 79 %) say they have encountered customers who refuse to pay .
On average , each individual loses £ 1,062 of income each year because of such reasons , but many lose far more . One in seven ( 14 %) miss out on over £ 2,000 a year .
Some tradespeople are more vulnerable than others to the problem . Young tradespeople
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are more likely to be affected , with Millennial ( 25-34s ) and Gen Z ( 18-24s ) reporting the most instances .
Comparing trades , builders are impacted the most , with an average annual loss of £ 1,462 .
Withheld payments can have serious consequences for trade businesses . Almost a quarter ( 24 %) of tradespeople say they have had to write off some debts as losses , and a similar number ( 23 %) say that this has led to difficulties paying their employees .
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Other repercussions include cash flow problems ( 18 %), delays paying suppliers ( 12 %) and difficulties taking on new jobs ( 15 %).
Ellis Osborn , Ecommerce Manager at IronmongeryDirect , said : “ Customers withholding payments from tradespeople is a real problem , and it can harm workers and businesses in a wide variety of ways .
“ The most common reason why customers don ’ t pay is that they have their own financial difficulties , but they should not be confirming work with tradespeople if
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this is the case , as a lot of time , money and effort is wasted . It ’ s also against the law not to give workers the money they are owed , so we ’ ve partnered with a business coach to explain your rights .”
To read expert advice on how to handle unpaid customer invoices , visit : www . ironmongerydirect . co . uk / blog / expert-tips-for-handling-unpaidinvoices
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