Opinion

EU doesn't want to be late

The European Union has adopted the European Late Payments Directive, which, by 16 March 2013 at the latest, will bring in 30 day payment terms.

Under the Late Payment of Commercial Debts (Interest) Act 1998 and the Late Payment of Commercial Debts Regulations 2002, businesses can already charge interest of 8 per cent above base rates on late payments. The new directive brings in 30 days as the latest a payment can be made or 60 days in certain circumstances. Anything in a contract that doesn't comply with the directive will be unenforceable.

The question is whether small businesses will use the legislation against larger customers.

This was first published in May 2011

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