What Can I Do About Late Payers?
Business and Commercial Law
The Late Payment of Commercial Debts (Interest) Act 1998 already provides for interest to be added to late payments under most commercial contracts, i.e. between two businesses, where your own terms of business don’t mention interest on late payments. Interest is charged at 8% above the base rate and is intended to provide a suitable deterrent to late payers, without the need to resort to legal action to recover the debt. A fixed penalty can also sometimes be claimed.
The Late Payment of Commercial Debts Regulations 2013 came into force on 16 March 2013 and have enhanced this regime, bringing it into line with the rest of Europe. From this date, broadly speaking, interest will run from the day after the agreed payment date or 60 days after the date of supply if no date for payment was specified in the contract. This period is reduced to 30 days if the purchaser is a public authority.
For more information on the Regulations, help with collection of debts or for a review of your terms of business, please contact one of our commercial solicitors.
