Businesses cheer tighter late payment rules

An update on our previous article: "Legal Basis for Prompt Payments"

Further tinkering by the BIS has addressed a technical problem with the Late Payment of Commercial Debts Regulations 2013.

With the catchy name of the “Late Payment of Commercial Debts (No. 2) Regulations 2013”, the amendment slashes the maximum period before statutory interest starts to run by 30 days, to 60 days or 90 days after contractual performance.

Throughout the recession late invoice payment has strained the cashflow for many businesses, and although awareness of the rules remains low, they have provided a legislative basis for speeding up debt collection.

This further clarification has helped, although since the changes do not have retrospective effect, ambiguity about the position with contracts formed before May 2013 is inevitable.

If you are struggling to collect payments, or would like advice on your payment terms, contact Tolhurst Fisher’s commercial department on 01245 216100.