Charge late payers

There is a very simple solution to payment abuse: apply existing legislation, namely, The Late Payment of Commercial Debt (Interest) Act 1998.

A recent survey by the Better Payment Practice Group shows that businesses are using this legislation more: 28% have successfully charged interest under the legislation, up from 20% last year.

The interest rate for companies wishing to apply the late payment legislation is 12.5% for payments overdue between 1 July and 31 December 2005. The interest rate for 1 January to 30 June 2006 will be the Bank of England base rate plus 8%.

That should concentrate the minds of those who don’t want to change. Further information can be obtained from www.payontime.co.uk.