Hold in interest rate for commercial late payments

The Better Payment Practice Group (BPPG) has advised businesses wishing to apply the late payment rules to overdue invoices, that the current interest rate applied to late payments remains at 12.5% for payments which become overdue between 1st July and 31st December 2006.

This interest rate remains unchanged from the previous period, 1st January to 30th June 2006.

The late payment 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.

We also have a wealth of articles on late payment within the Bytestart Credit Control section, including our guide on How to Manage Late Payers.