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The Better Payment Practice Group (BPPG) has advised businesses wishing to apply
the late payment legislation that the interest rate for payments, which become
overdue between 1st July and 31st December 2006 will remain at 12.5%.
The legislation provides businesses with a statutory right to claim interest and
compensation on overdue commercial debts.
For contracts dated on or after 7th August 2002, the late payment interest rate
is set twice a year by adding 8% to the reference rate, which is the Bank of
England base rate on 30th June and 31st December.
This interest rate is applicable for payments, which become overdue in the
ensuing six-month periods, i.e. between 1st July and 31st December and 1st
January and 30th June respectively.
Source:
Credit
Control Journal
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