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Interest boost for small firms
Page 11
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by Sally Nash II Hauliers with fewer than 50 staff will be able to charge a higher rate of interest on outstanding debt than was first mooted as part of a Government clamp-down on late payment.
The Government's bill, which was outlined last week, means that from next summer small businesses will be able to demand interest on late payment at the base rate plus 8% instead of base rate plus 4%.
Initially, only employers with fewer than 50 staff will be able to pursue late payment on these terms against large companies and public sector organisations. After two years small businesses will be able to take such action against all firms. And after a further two years, all companies will be covered by the law.
Small firms minister Barbara Roche says: "Late payment is a real problem for Late payment bill could become law by business. Firms next July, says the DTI. are tired of having to carry the cost of their customers' late payment."
For hauliers who have no specified contract terms, late payment will be taken to mean after 30 days from the date of invoice or from delivery of the goods or service.
The Forum of Private Business supports the legislation. Nick Goulding, the FPB's head of policy, says: "At last we have a real chance of ending the UK's huge late payment problem. This is the start of a process which we believe will boost regional economies and hence the national economy."
A spokesman for the Department of Trade and Industry says the law could be on the statute books by July next year.