Late Payment Compensation

Empowering Small Businesses: A Call to Action Against Late Payments 26th January 2024 Introduction Late payments can pose a significant challenge for small businesses, impacting cash flow, hindering growth, and even risking insolvency. However, there’s a glimmer of hope on the horizon as the European Union (EU) takes a decisive step to address this issue head-on. The proposed reforms to strengthen the late payment directive aim to provide enhanced protection for suppliers, ensuring timely payments and shielding businesses from potential financial pitfalls. EU’s Bold Move In response to a call […]

In his Autumn Statement the Chancellor announced that businesses would be excluded from bidding for large government contracts (Those larger than £5m) if they have payment times of over 55 days by April 2024, reducing to 45 days by April 2025. Legislation passed this year already means that companies securing public sector contracts have to pay 30-day payment terms within their supply chains for that specific work. The rule will now be extended to all suppliers used by companies bidding for large public contracts. This was part of a range […]

Legislation fails to speed up payments 28 August 2023 – James Salmon Research by the Chartered Institute of Procurement & Supply (CIPS) shows that rules designed to force large companies to reveal how long they take to pay suppliers have failed to improve payment practices. Since ‘duty to report’ legislation was introduced in 2017, the average time it takes a large business to pay an invoice has fallen by just one day, to 36 days. The CIPS found that there has only been a “slight improvement” in the number of […]

Your Rights Legislation was introduced as long ago as 1998 when The Late Payment of Commercial Debts (Interest) Act 1998 came into force. This initial legislation has since been strengthened and extended by the implementation of The Late Payment of Commercial Debts Regulations of 2002 and 2013 The legislation had two purposes. Firstly, to provide compensation to creditors for the late payment of debts. Secondly, to discourage late payment of invoices. The legislation provides for interest to be a statutory right, claimed at 8% over the Bank of England base rate and […]