The Department for Business, Innovation & Skills (BIS) has launched a consultation on how best to implement the European Commission Directive on late payment in commercial transactions (2011/7/EU). It requires responses by 19 October 2012.
The UK is required to implement an EC Directive on late payment by 16 March 2013. The key change in the Directive will be that it could make payment terms longer than 60 days (and in the public sector, 30 days) unenforceable. However, we need to see the UK legislation to understand exactly how it will work.
We had expected to see draft legislation in the consultation, detailing how the Directive will be implemented in the UK. Instead, the Government has opted to launch a broader consultation, posing a broad series of open questions. The impression we get is that the UK Government is not particularly enthusiastic about this legislation. We suspect that actual implementation will be later than the date required in the Directive.
Any business that buys or sells goods or services will be affected by the new legislation that comes into effect. Stakeholders must act if they want their voices to be heard, so if your business is not responding directly to the consultation, we advise that you ensure your relevant trade association is.
Any comments should be submitted to BIS by no later than 19 October 2012.
Visit our previous alerts on the Directive to see how it affects your business:
New EC Law on payment terms: an analysis of the key changes under the Directive
Charging interest for late payment: a general overview
The Late Payment of Commercial Debts Act - what constitutes substantial?