Late payment crackdown confirmed
New legislation to tackle late payments is currently going through parliament.
The Bill will introduce:
- a new 60-day cap on payment terms for larger firms paying smaller suppliers
- new mandatory interest on late payments, with a requirement for all commercial contracts to include statutory interest set at 8% above the Bank of England base rate
- a time limit for raising disputes on payments
- action to ban the practice of withholding retention payments under construction contracts, to prevent small firms losing retentions to insolvency or non-payment
- significant new powers for the Small Business Commissioner to investigate poor payment practices; adjudicate disputes outside the courts; and fine the worst offenders.
Provisions are intended to apply UK-wide, though this will require regulatory alignment in Scotland, Wales and Northern Ireland.
Payment issues are always disruptive, and we can advise on cash and debtor management if this is relevant to you. Please contact us for an in-depth discussion.
© This publication is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this publication can be accepted by the authors or the firm.
