Share your views on late payment legislation
The UK government is consulting on how it should implement the revised Late Payment directive, which has to be done by March 2013.
The main requirements of the directive are:
Public authorities will be required to pay suppliers within 30 calendar days of receipt of an undisputed invoice.
For business to business payments, the period for payment fixed in the contract should not exceed 60 days, unless otherwise expressly agreed and provided such terms are not grossly unfair.
It copies current UK practice of a default payment period of 30 days, where terms have not been agreed.
There is a minimum €40 (approximately £31) for compensation (current UK legislation sets three levels of compensation payment according to the value of the payment). Suppliers will not be prevented from seeking to claim additional recovery costs.
Views are invited on:
Should the three tiered approach be retained or changed to a minimum compensation? The current UK system, suggests a fixed charge of £40, £70 or £100 depending on the size of the debt (under £1,000, under £10,000, and higher) as compensation for recovering costs. The revised directive propose a creditor is entitled to obtain from the debtor, as a minimum, a fixed sum of €40, as compensation for recovery costs, plus additional costs incurred.
When the directive is implemented on 16 March 2013, our proposal is to exclude contracts concluded before 16 March 2013 from being subject to the directive, given the changes introduced are not sufficiently substantive to warrant retrospective application, and that retrospective applications will incur a costly process of contract review – is this the correct choice?
If you have any thoughts on the subject please email Jenny at email@example.com by the 19th October.