Hauliers slow to ask interest
Page 10
If you've noticed an error in this article please click here to report it so we can fix it.
• Legislation designed to crackdown on the late payment of small businesses is having little effect on the problem, according to a new survey and reports from the Road Haulage Association.
The study by the Credit Management Research Centre at Leeds University Business School published last week discloses that only 5% of small businesses have used The Late Payment of Commercial Debt Act since it was introduced by the government in 1998.
The law allows businesses with fewer than 515 employees to claim interest from large firms at 8% above the base rate if payments are made more than 30 days after the invoice date, unless by prior agreement.
The second phase of the legislation comes into effect this November, allowing small firms to charge each other interest on late payment.
The RHA says that the report's findings bear out its experience that the legislation is little used, despite it being Mentioned in the RHA's terms of business documentation. The low level of recompense available and the costs of taking a client to court are putting hauliers off, it adds.
Chris Ramploy, RHA infrastructure, environment and business affairs manager, says: "A lot of our members are reluctant to rock the boat because they fear that they'll lose the work if they do. The few that are using it are those that have lost the business anyway, so they've got nothing to lose."
Haulage is claimed to be one of the sectors most severely impacted by the problem with clients routinely expecting 45,60 or 911-day payment terms.