Phase 3 of the Late Payment of Commercial Debts Act to be introduced in the autumn 2002, will allow large firms to charge interest on late payments of commercial debt. Research by CMRC found that only 14% of businesses, were aware of this. Professor Nick Wilson, director of CMRC, said: "Our survey shows that usage of the Late Payment Legislation by small firms has dropped 50% to 1 in 20 in the last 12 months. Whereas SMEs are reluctant to enforce the interest charge for fear of losing business, large firms will almost certainly make full use of the act."
Over 90% of small firms were aware of the first phase of the legislation (small firms can charge large firms interest) and 80% were aware of the second phase (small firms can charge large firms and other small firms interest) but only 14% were aware of the final phase (all firms can charge interest).
