What is reasonable?

Hi,

When you failed to pay your supplier on time, this no doubt caused them additional work and affected their own cash flow.

As you paid late, then they are entitled to the compensation made available by the legislation.

The legislation is there to break the culture of late payment that is invasive in business culture.

Your supplier is entitled to claim this compensation up to six years after the late payment occurred.

It is only by applying the legislation that the culture can be changed.

At the time a customer can use their promise of future business as a way to make suppliers accept late payment without asking for interest or compensation.

However the lesson is that once they stop being a customer, the supplier can go back up to six years and ask for the compensation on any late payments.

Therefore businesses should pay on time. If they don't they risk facing a potential claim later on.