Tackling Late Payment
Late Payment
The government introduced the Late Payment of Commercial Debts (Interest) Act 1998, which gave small firms with 50 or less employees a statutory right to interest for the late payment of commercial debts. This statutory right to interest and other new entitlements have been available to all businesses and public sector bodies since 7 August 2002.
A guidance booklet, A User's Guide to Late Payment Legislation can be downloaded (13 pages). The booklet is no longer available in hard copy.
The late payment legislation does not prevent businesses from setting, and agreeing with customers, their own terms of business including the level of interest to be charged on late payment.
Leaflets providing guidance on all aspects of recovering debts through the courts are available from the Court Service or from county courts.
The Law Society operates the Lawyers For Your Business scheme, offering a free consultation with a solicitor. Details of the scheme can be found on the Law Society website.
Encouraging Prompt Payment
BIS launched a new Prompt Payment Code for business, sponsored by the Institute of Credit Management (ICM) and supported by a range of businesses and small business representative bodies. Key elements of the code include encouraging businesses to pay suppliers on time, give clear guidance to suppliers; and encouraging good practice through their supply chains. For further information visit the Prompt Payment website.
BIS has worked with the Institute of Credit Management (ICM) and leading business and finance organisations to launch a series of guides on managing cashflow, to ensure every business has access to the very best support and guidance.
Business Debtline provides free, confidential and independent advice on how small businesses can deal with debt problems. The advice they provide is targeted to the small business.
