Getting paid: know your rights
July 31, 2019
July 31, 2019
Most customers are happy to pay a fair day’s wage for a fair day’s work, but there are a few bad apples who will look to delay payment, or even worse, try and avoid it altogether. In this blog, we look at what you need to know about getting paid on time and what to do if it’s starting to become a problem.
If your customer is withholding payment because they’re not happy with the work, try and keep things civil whilst you come to an agreement. By law, customers can only withhold a ‘reasonable’ amount of payment on a job.
For example, if a customer is unhappy with the installation of a single plug socket on a full kitchen refurb then they can only withhold the amount required to fix that issue.
Consumers are often advised to find alternative quotes to fix the problem and then try and negotiate with the tradesperson to either deduct it from their invoice or rectify it themselves. At this stage it’s really up to you whether you continue to make the case, or find a way to finish the job to their satisfaction. Ultimately time is money and you might find that if you work out the cost of the hours you are likely to spend contesting the point or taking things further legally, it might just pay to make the changes they request. Fighting the matter through the courts can end up becoming very expensive. So, if the customer does actually have a point it will only end up costing you more in the long run.
• Sign a prospective contract
It’s best to have your customer sign a contract before you start on any work. This can include full details of the job and can be used to agree things like phased payments. The Citizens Advice Bureau has some useful information online for building and home improvement work in particular. Although prospective contracts tend to be aimed at protecting the consumer, they will also reduce the risk of any dispute for tradespeople too.
• Invoice the client promptly
It’s important to issue invoices quickly once a job is finished. Make sure that the invoice is clear and accurate. State the additional costs you will charge if the client takes too long to pay. Under late payment legislation you have a right to claim interest and debt recovery costs on late payments.
• Visit the Checkatrade Member Area
We offer a number of useful trading standards documents in our Members’ Area. From pricing guidance to customer contracts, the downloadable forms can help make the relationship between yourself and your client feel much more official.
Skilled tradespeople get your business started
It may seem obvious but when chasing for payment keep your calm, or you may find yourself on the wrong side of the law. Persistent or aggressive chasing could be perceived as harassment. You have every right to chase customers for payment but try to keep calls to during office hours and leave time between calls. To save yourself the stress, it might be worth bringing in a third party. Use a debt recovery agency like Cash Flow Protector to chase late-paying customers for you.
It’s the option that nobody wants to take, but if all else fails then the final resort is to take the matter to the Small Claims Court. You can start the process by obtaining a claims form from your local court, or by downloading a form from the HMRC website. Once completed, take two copies to your nearest court and they will assess the claim and serve the defendant by post.
The legal options on offer to you will depend on how big your claim is:
• Small Claims Track for claims under £5,000
• Fast Track for claims between £5,000 and £15,000
• Multi Track for claims over £15,000
If the amount is relatively small then it’s also possible to use the Money Claim Online service, which can be a convenient alternative to going to court.
Getting paid is the best part of any job, but it’s important that it happens on time. Late payments can lead to big issues and shouldn’t be tolerated. By following the guidance set out in this article, you can start to better manage the problem and stand the best chance of getting paid everything you’re owed.
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