Goverment brings forward late payment law

The Government has brought forward plans to implement a European Directive which makes a 30-day standard invoice payment term compulsory for all businesses. The deadline for implementing the Directive is 2013, but the Government plans to bring it into force from early 2012. Under the Directive, businesses could set 60-day terms by prior agreement, but terms longer than 60 days could be deemed "grossly unfair" by the courts. Small businesses will be able to charge 8% interest and a £35 fee for late payments. Lawyers have warned that the Directive could lead to increased contractual disputes and litigation.

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