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GOVERNMENT REJECTS STATUTORY INTEREST ON LATE PAYMENT

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The government has confirmed its 1994 decision not to introduce legislation to provide for interest on overdue comm...
The government has confirmed its 1994 decision not to introduce legislation to provide for interest on overdue commercial invoices.

The decision follows a five-month review by small business minister Richard Page.

The government will shortly publish a consultation document on whether PLCs and their large subsidiaries should be required to publish their payment performance. And tough new targets for government departments were also published on Friday; they will aim to pay 100 per cent of undisputed bills on time.

The statutory right to interest review sought comments from business representatives and was informed by the Your Business Matters conferences, and by commercial and academic research.

Eight out of nine organisations representing small firms who responded to the review don't want a statutory right to interest on late payment. They fear it will be used against, rather than by small firms; will lead to longer credit periods and legitimise the practice of late payment.
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