Traditional tradespeople have had a tough time of it in recent years; plumbers, electricians and builders have been hit by a turbulent economy, as well as falling under the scrutiny of HMRC on any unpaid tax. And while many of us might wish we didn’t have to pay so much in tax, the penaltiesRead More
Traditional tradespeople have had a tough time of it in recent years; plumbers, electricians and builders have been hit by a turbulent economy, as well as falling under the scrutiny of HMRC on any unpaid tax.
And while many of us might wish we didn’t have to pay so much in tax, the penalties for failing to declare your full income to HMRC can be punitive indeed. But even if you are a self-employed individual, you don’t have to cope alone with potential interruptions to your cashflow – and CPA are here to help you reclaim what is rightly yours, when customers try to get away without paying you for the work you do.
In the first instance, do what you can to protect your interests proactively: agree work in writing upfront, with a clear price quoted and arrangements for adding any unforeseen costs on top of that amount.
As long as you carry out the work to a good standard, in accordance with any agreed conditions, you should leave your customers with no legitimate excuse for failing to pay. Make sure you issue invoices in writing, itemising the charges and particularly spelling out any additional fees incurred – and crucially, set a clear deadline for payment.
If the deadline is missed, you have several options, ranging from an extension for customers you know and trust, to immediate recovery action for anyone you do not believe has any intention to pay you. You may be able to add penalty fees and statutory interest on top of the amount owed, so it’s worth chasing almost any sum – with the right to reclaim your recovery fees from the debtor as well, you shouldn’t be left out of pocket.
By taking a strict but fair approach to pursuing for payment, you should be able to make sure that you receive 100% of the money you are owed for the work you do, with very few (if any) invoices going unpaid.
Do all you can to maximise your earnings in this way – with CPA’s help if necessary – and you should have the funds to set aside, ready for that next tax bill dropping through your door.