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30 or 60 days? Clarification required please.

5 years 7 months ago #1212 by JH

On this site, here: tinyurl.com/32jz7tc it reads: ‘On 16 March 2013 further amendments were made to the existing legislation requiring private businesses to pay within 60 days and public within 30 days.’

I’ve read the legislation and nowhere does it mention 60 day payment terms. From the above I’m assuming that as a private freelancer dealing with private (non public/governmental) bodies, a payment is now late after 60 days and not 30 as it used to be. Is this correct or is it still 30?

Thanks for any insight.

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5 years 7 months ago #1215 by ashley smith
In 2006 a report was commissioned by the EC to advise on further amendments to Late Payment Legislation with one of the recommendations being that the maximum term should be reduced to 30 days. This had initial approval by MEP's but a lobby group managed to get the maximum time extended to 60 days.

Where we now find ourselves though is that the default (UK Late Payment Regulations 2013) is 30 days, that is to say if neither party has in place terms that state an invoice will be paid within a certain time frame the 30 days rule kicks in.

The reality though is a number of larger companies have used the legislation to re-look at their terms and change (increase) them to 60 days !

A few companies have tried to increase to even longer, saying both parties had agreed (how many people would say no when a gun is against their head?), thus you have the right to claim such a term is Unfair.

I hope this assists, If you want the reports that I refer to above let me know and i can send the links - you will need a few hours to trawl through though !!!!

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5 years 7 months ago #1217 by JH
Thanks for the clarification. Good to know the 30 day rule will still stand up in court when no contract has been signed.

Do you know who the members of the lobby group were that held out for the 60 day rule?

The analogy of having a gun to your head is correct, one company I work for stipulate 90 day payment terms! I only discovered this after the work was done and they required me to agree to these terms when accepting the purchase order - basically I accept or I don’t get paid.

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