Bacs Research Shows UK SMEs Don't Take Advantage of Late Payment Legislation
Eighty-three per cent of small-to-medium sized enterprises (SMEs) in the UK are not exercising their right to charge interest on late payments owed to them by other organisations – despite the fact that legislation to this effect was introduced almost a decade ago. This figure, revealed as part of ongoing research from Bacs, highlights the ongoing battle SMEs face in claiming the estimated £18.6bn that is collectively owed to them in outstanding payments. Initially launched on 1 November 1998, the Late Payment of Commercial Debts (Interest) Act was introduced to offer SMEs protection against late payments by providing them with the statutory right to charge interest on overdue invoices. However, when questioned as part of Bacs’ annual business omnibus, just 15% of SMEs confirmed they had utilised their legal rights and charged interest on an overdue business payment.