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Late Payment Legislation for Commercial Contracts from 7th August 2002

 

In November 1998 the UK government introduced legislation to give businesses a statutory right to claim interest from other businesses for the late payment of commercial debt. This was introduced to promote a culture of prompt payment.

 

For all commercial business from 7th August 2002 the Late Payment of Commercial Debts (Interest) Act 1998 was amended and supplemented to incorporate the features of EU Directive 2000/35/EC on combining late payment in commercial transactions.

 

If your business has decided to apply the late payment charge you should notify your customer in writing and supply a new invoice to your customer detailing the additional item as interest applied under the Late Payment Act as detailed above.

 

Your customer cannot contract out of the late payment legislation - it is not something they can choose to opt out of.

 

Resolve Collections will advise on the application of these rules and the amount of interest to be added to your commercial debt if you have not already included the interest in the total debt value submitted.

 

Please note the legislation does not apply to any Consumer Debt or any debt for sales or services applied to the public.

 

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