
As part of a package of measures detailed in its Small Business Plan released today the UK government has announced plans to tackle late payments to small and medium sized businesses (SMEs) in the UK with the most significant legislative reforms in over 25 years aimed at introducing the toughest laws on late payment in the G7 [Backing your business: our plan for small and medium sized businesses – GOV.UK].
At present the key legislation in the UK is the Late Payment of Commercial Debts (Interest) Act 1998 which provides all businesses with the option to charge interest at 8% over the Bank of England base rate on overdue payments owed by other businesses or public bodies unless an alternative “substantial remedy” for late payment has been agreed. In addition, payment terms in excess of 60 days are open to challenge on the grounds of unfairness with public bodies obliged to offer payment terms not exceeding 30 days.







