There is a piece of law which lays down a statutory right to interest for overdue payments.
It is called the Late Payment of Commercial Debts (Interest) Act 1998.
Some businesses will already have late payment clauses in their contracts but rarely use them.
The Late Payment legislation only applies to business to business supplies.
As well as interest there is a legal right to claim reasonable debt recovery costs (£40 for debts up to £1,000, £70 for debts from £1,000 to £10,000 and £100 for debts of £10,000 or more).
The legal rate of interest chargeable is the Bank of England base rate + 8%.
A payment is late after the last day of the agreed credit period.
If there is no agreed period then 30 days applies.
Visit www.lawgistics.co.uk or call 0870 26 77 118 for more information.