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The aim of the new Regulations is to encourage prompt payment of invoices - a perennial problem for small suppliers suffering cashflow problems, particularly so in the current economic climate.
Time limits for payment
There are new time limits for payment, depending on who you are contracting with:
It is possible to agree more than 60 days provided the agreement is in writing and such terms are not “grossly unfair”.
“Grossly unfair” means anything which, in the circumstances, is a gross deviation from good commercial practice and contrary to good faith and fair dealing. As this is a new concept under English law it will be interesting to see how the courts apply this in practice.
What if payment is late?
Under the Regulations the creditor can charge:
What should I do about this?
We recommend that:
If you have any questions or would like any advice on this area please do not hesitate to contact Cathrine Ripley.