A European Commission Directive that gives businesses the right to claim interest on late payments will come into effect on 8 August 2002, three months earlier than envisaged.
The legislation was originally due to be implemented in the UK on 1 November 2002 but has been brought forward in line with an EC Directive.
It is the third and final phase of a late payments law – The Late Payments of Commercial Debts (Interest) Act 1998 – which currently allows small businesses to claim interest on overdue bills from similar-sized and larger businesses.
As of 8 August, however, the law will apply to businesses of all sizes, meaning that any company can claim interest from any company that has debts outstanding, regardless of size. In addition, companies will be able to claw back administration costs involved in recovering debt.
