Almost three quarters of the 1,476 businesses surveyed on the Better Payment Practice Group’s (BPPG) website admitted that they are unable to calculate the interest due to them.
Under the UK's late payment legislation, businesses are entitled to charge late paying customers interest at a current rate of 11.75% on overdue commercial debts. Interest runs at a daily rate while the debt remains outstanding. Businesses are also able to claim up to Ј100 in debt recovery compensation.
Clive Lewis, chairman of the BPPG commented, "Businesses should remember that they have a statutory right to interest on unpaid debts. By not understanding how to calculate what is due, it is impossible to make an informed decision on whether using the legislation would be an effective lever to encourage payment.”
