Business – EU crackdown on late payers

Business - EU crackdown on late payers

A proposed European Union directive designed to crack down on late payment across Europe has come under fire from UK business groups.

The EU late payment directive, agreed by industry ministers last month, will allow small and medium-sized companies to charge interest on overdue payments at 6% above Bank of England and European Central Bank rates.

The higher rate will kick in 30 days after the invoice date – providing no prior agreement has been reached.

It is not yet clear to what extent the EU legislation will force governments to change national legislation.

The UK’s Late Payment Act allows small companies to charge interest of 8% above base rate after 30 days if no agreement has been reached with suppliers. With controversy triggered by Rentokil Initial’s 60-day payment policy, the UK Act has come under continued attack by UK small business groups. But the groups have questioned the practicality of the EU move.

Stephen Alambritis, head of parliamentary affairs for the Federation of Small Businesses, said: ‘It will be very difficult to enforce.’

The CBI also said it was opposed to any form of late payment legislation.

Nick Goulding, however, head of policy at the Forum of Private Business, welcomed the EU directive. ‘If a UK company is trying to export to a European country which has wildly different payment rules, it is very difficult,’ he said.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource