Introduction to the Late Payment of Commercial Debts (Interest) Act 1998

It is important to realise that this legislation only applies to a commercial debt. The debt should be one that has arisen in the course of business. Both parties should be businesses, commercial entities or public sector organisations.

Note: this does not mean that both parties have to be Limited Companies. A self-employed person/free-lancer/sole trader would be considered to be a business.

Examples of debts not covered would include: An employee who was owed unpaid wages. There would be other employment legislation that would be more appropriate. A business chasing a consumer for an unpaid bill or bounced cheque.

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