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Surge in late payments since the Budget: "The stress of managing the uncertainty is relentless"

ended 28. January 2025

One business owner, Tony Redondo, Founder at Cosmos Currency Exchange, says he has seen a marked rise in late payments since the Autumn Budget: “A growing number of my SME clients are facing a surge in late payments and non-payment since the Budget, severely impacting their cash flow and business viability, with a knock-on effect across the supply chain.”

Late payments or businesses refusing to pay full stop is a recurrent struggle for SMEs, as exemplified by Bradley Winstanley, Founder at Winstanley Associates & Ability Therapies, who is currently owed over £20k — a debt he says “has had a massive impact on cash flow and stress levels”.

The psychological toll of late payments is confirmed by Gary Parsons, Leadership Mental Health Advocate at Gary Parsons UK: “It’s not just about cashflow: it’s about the sleepless nights, the emotional strain, and the constant worry about whether you’ll have to make impossible decisions like cutting jobs or delaying vital investments.  The stress of managing this uncertainty is relentless, and it often goes unnoticed.”

The views of six business owners are below.

6 responses from the Newspage community

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Tony Redondo
Founder at Cosmos Currency Exchange
A growing number of my SME clients are facing a surge in late payments and non-payment since the Budget, severely impacting their cash flow and business viability. This is then having a knock-on effect across the supply chain. To manage this, businesses are adopting various strategies. They focus on building strong relationships to encourage clients to prioritise their invoices. If that fails, they update terms, track payment dates, follow up proactively, offer payment plans and implement late payment fees or interest. As a last resort, some turn to debt collection or credit control agencies. Insolvency practitioners are also seeing an increase in demand, with expectations for higher activity through 2025.
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Ed Rimmer
CEO at Time Finance
Over the years we’ve seen the Government attempt to curb issues of late payment, more recently through a Fair Payment Code but most measures are reliant on businesses voluntarily adopting best practice. Without enough meaningful deterrent against late payments, they will continue to threaten SMEs' livelihoods. I’ve worked in SME finance for over three decades and seen firsthand that a business owed money in unpaid invoices is a business that will struggle with cash flow. The knock-on-effects have day-to-day repercussions that stunt growth, and managing overheads becomes such a strain that many are forced to fold. This is completely avoidable if SMEs have access to the money they are owed. Over the past few months we’ve expanded the size of our Invoice Finance facilities in response to this challenge and we’ve found businesses are universally relieved to have the pressure eased so they can look beyond their cash flow challenges and concentrate on their growth.
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Bradley Winstanley
Founder at Winstanley Associates & Ability Therapies
I run a small family business, offering recruitment services to technology companies. I am currently owed over £20k from a well known EdTech business. I have successfully built their International Sales and Leadership team, our business has played an instrumental role in placing exceptional talent that has contributed to their success but despite this, they are refusing to pay. Since July 2024 they have an unpaid invoice in excess of £20k. I have repeatedly approached the founders in a professional and amicable manner to try and resolve the issue. Despite my best efforts, the requests have been ignored, leaving me with no other option but to engage solicitors at considerable cost but the business has also ignored the legal letters. As the business are based in Switzerland, it's likely to cost me several thousands to pursue the invoice I am owed. This really has had a massive impact on cash flow and stress levels.
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Matthew Knight
Chief Freelance Officer at Freelancing.Support
Late payments are a huge issue for many freelancers in the UK. Recent research shows as much as 74% of freelancers had to spend time chasing late payments last year. Meanwhile, over 3.6 million small businesses have some form of outstanding late payment, on average over £90,000. This leads to huge issues for cashflow, paying bills and impacts the mental health of our least supported businesses. Many freelancers aren't aware of their rights to charge interest on late payments, and many feel anxious chasing payment might put future work with that client at risk. We see comments from our community almost every week asking for help to deal with an issue around late payment, or a client who has gone very quiet once the invoice has landed. It feels like things are getting worse but as there is no mandatory reporting or good quality data on the issue, it's a hidden problem that needs more attention.
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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
Unfortunately, late payments have become a recurring theme in business, creating a frustrating domino effect. Cashflow gets squeezed, growth plans stall and chasing payments turns into a second job no one signed up for. Since the Autumn Budget, there’s been a noticeable uptick in delays, with some clients blaming "economic uncertainty" while others seem to have mastered the art of avoidance. To stay afloat, we’ve implemented stricter payment terms and gentle yet firm follow-ups, but even that isn’t foolproof. When clients consistently pay late, we’re left balancing empathy for their struggles with the reality of our own. It’s a delicate line to walk, but one we must tread carefully to protect the future of our business.
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Gary Parsons
The Selfish Speaker, Facilitator & Mentor at Selfish Thinking Co
It’s not just about cashflow: it’s about the sleepless nights, the emotional strain, and the constant worry about whether you’ll have to make impossible decisions like cutting jobs or delaying vital investments. During my time as CEO, I faced the heavy burden late payments place on leaders, watching overdue invoices pile up while trying to protect my team and keep the business moving forward. The stress of managing the uncertainty is relentless, and it often goes unnoticed. Since stepping down as CEO last April, I’ve seen how this issue continues to risk people’s livelihoods, especially as economic uncertainty grows post-Autumn Budget. Late payments don’t just hurt businesses, they put an immense strain on the wellbeing of the people running them, and that’s a conversation we need to have.