When the Late Payment legislation was introduced, it was decided that it would be brought in, in several stages. Subsequently the law has been amended to bring it into line with the EU Late Payment directive (2000/35/EC).
This means that diferent rules apply, depending on the date that the 'contract was formed'. You don't have to know the exact date the contract was formed, just into which period it falls.
Interest on Late Payment may be claimed at 8% over the base rate. However only small businesses can use the legislation to claim against large businesses. Click here for more information on whether a business is large or small.
Extended so small businesses may also claim against other small businesses. Large businesses are still not able to use the legislation.
Revised to bring into line with the EU directive. Interest rates are fixed for six months at a time rather than changing every time base rates change. In addition companies may demand compensation for the costs of collecting late payments up to a fixed amount.
The law also now applies to all companies large or small