Under the Late Payment of Commercial Debts Regulations 2013, the regime covering the late payment of commercial debts in England, Wales and Northern Ireland has been changed from 16 March 2013 in respect of contracts entered into on or after that date. In Scotland, these changes were brought into effect by the Late Payment of Commercial Debts (Scotland) Regulations 2013 from 29 March 2013.

Where the purchaser is a public authority, a maximum payment period of 30 days will apply. Where the purchaser is not a public authority, a maximum payment period of 60 days will apply unless a longer period has been expressly agreed by the parties. Where a longer period applies, it will need to be demonstrated that this is not ‘grossly unfair’ to the supplier.

The legislation permits interest to be charged on overdue commercial debts at 8 per cent above base rate.

Interest will run from the latest of:

• the date of receipt of the supplier’s invoice;
• the date of receipt of the goods; or, in certain circumstances,
• the date on which the purchaser confirms that the goods supplied are in accordance with the contract.