On the 16th March 2013 the Late Payment of Commercial Debts Regulations 2013 (SI 2013/395) (‘Regulations’) came into force, these Regulations have amended the Late Payment of Commercial Debts (Interest) Act 1998 and apply to commercial contracts for the supply of goods and services.
1. The debt must be in England and Wales and be between B2B.
2. You can start to charge interest on outstanding payments from 30 days. If you are contracting with a public body this sum can be more than 60 days (if you agree) but cannot be grossly unfair to you.
3. The rate of interest remains unaltered under the Regs ie the default statutory rate is Bank of England base rate plus 8% (European Central Bank plus 8% in the Eurozone).
4. Whilst you have always been able to apply a fixed charge as compensation for the cost of recovering a debt (£40, £70 or £100, depending on the size of the debt), you can also claim other reasonable costs of recovery. This will include debt recovery costs, subject to the the Unfair Contract Terms Act 1977.
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