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Companies 'should make use' of late payment legislation
12/04/2007
Businesses should use the late payment legislation that the UK was one of the first countries in the EU to introduce to take action against late payers, a law firm has urged.
While some firms often wait longer than necessary to receive payment from other companies, this could lead them into financial difficulties of their own, especially if they have a business loan to repay themselves.
However, north-east law firm Dickinson Dees has said that there is no reason for businesses to accept this constant late payment and that there is legislation in place to combat it.
"The UK was one of the first countries in the European Union to introduce late payment legislation to help promote a culture of prompt payment, but many businesses are still unaware that where commercial debts are paid late and where no contractual right to interest exists between the parties, a claim can still be made for interest," said Jonathan Blair, a partner at the firm, according to the Northern Echo.
Any commercial business-to-business transaction that is late can be claimed against, the newspaper stated, with interest at the base rate plus eight per cent from the day the debt started also possible to be claimed.
While some firms often wait longer than necessary to receive payment from other companies, this could lead them into financial difficulties of their own, especially if they have a business loan to repay themselves.
However, north-east law firm Dickinson Dees has said that there is no reason for businesses to accept this constant late payment and that there is legislation in place to combat it.
"The UK was one of the first countries in the European Union to introduce late payment legislation to help promote a culture of prompt payment, but many businesses are still unaware that where commercial debts are paid late and where no contractual right to interest exists between the parties, a claim can still be made for interest," said Jonathan Blair, a partner at the firm, according to the Northern Echo.
Any commercial business-to-business transaction that is late can be claimed against, the newspaper stated, with interest at the base rate plus eight per cent from the day the debt started also possible to be claimed.