Late Payment Act

The Late Payment of Commercial Debts (Interest) Act 1998

The late payment interest rate is calculated using the Bank of England base rate during the period of time of the late payment

Current Figures/Calculation

Explanation :

The late, and non-payment of commercial invoices is the single most destructive chain event for many small businesses.

There needed to be a way to focus the debtor on the increasing cost of delaying payment to both them and the creditor.

With this in mind, the government brought in the Late Payment of Commercial Debts (Interest) Act 1998 to deal with commercial payment default taken as a right within the UK business community. As with many government initiatives, getting the message out is arguably the easy part but getting those intended to benefit from the legislation to use it is the difficult part !

The introduction of late payment interest is not meant to act as a deterrent alone, it needs to be implemented and managed within a credit control environment but acts as essential legislation to put you in the right and keep the law fighting on your behalf to ensure you keep your overdraft facility to a minimum.