How to Tell if a Payment is Late Under UK Regulations?
Payment delays can severelyimpact your business. As such, the UK has legislation in place to mitigate this impact and protect businesses from late payments from public bodies. But, before you take action, you must know how to tell if a payment is late under UK law.
This guide covers everything you need to know about determining when a payment is late and what legal recourse is available for your business.
How to Tell if a Payment is Late
There are a number of reasons why UK businesses should know how to determine if a payment is late. Not only does it ensure you only contact clients at the appropriate time, but it also ensembles you to assess whether you’re eligible to make a late payment compensation claim.
Under UK regulations, businesses can generally consider a payment late if they don’t receive it by the agreed-upon due date. However, this can vary depending on the context.
To help you tell if a payment is late under UK law, follow these steps:
1. Review payment terms
The first step is to check the payment terms and conditions that you have in your contract with the public sector client. As a general rule, these payment terms should specify the due date and a grace period if applicable.
2. Check the invoice date
The next step is to check the invoice date. Typically, the payment term begins from the date of the invoice, so always ensure that you have included the correct date. It’s also important to note that the payment term generally begins following the date on an undisputed invoice. As such, it’s crucial to get all the information on your invoice correct to avoid payment delays.
3. Take into account any agreed grace period
In some cases, your business may have agreed upon a grace period. This simply means that the debtor (public body client) has a little wiggle room past the official due date to make the period. If this is the case, you will need to factor this in and consider the payment late once it exceeds the grace period.
4. Count the days
You should now calculate how many days have passed since the invoice was invoiced. If you still haven’t received the payment by the set due date, then it’s considered late. Alternatively, if you don’t have a due date but your client is a public body, they have 30 days to make the payment (more on this in step 6). This 30-day period begins from the time you send them an undisputed invoice.
5. Double-check your communication
The next stage is to check If, for any reason, your public sector client has provided a new payment date. In the event that they have, it’s important to maintain clear documentation of this and to consider the revised date.
This is also a good time to confirm that there are no outstanding disputes or issues with the invoice. As, naturally, these could impact the payment timeline.
6. Get to know your rights
It’s now time to consult the relevant regulations to know your rights. For instance, if you’re dealing with a late payment from a public authority, you’ll need to refer to the Late Payment of Commercial Debts (Interest) Act 1998.
This regulation provides specific guidelines for payment terms and compensation for delayed payments. More specifically, public authorities are generally required to pay suppliers within 30 days of receiving a valid invoice.
However, there are some expectations and variations to this standard rule. Since these legislations can be complex, you may consider enlisting the help of a specialist service. That way, they will navigate the complexities of the public procurement process on your behalf.
Before you take action, it’s best to consider internal policies in your business. In some cases, your business may provide flexibility in payment dates or have a protocol in place. As such, always consult these policies before reaching out to your public sector client.
8. Maintain accurate records
In the event that your payment is late and you’re entitled to claim compensation, you’ll need clear records of all invoiced and payment-related communications. These will come in handy if you pursue a late payment compensation claim or there is an invoice dispute.
9. Consult a specialist
If you are unsure whether a payment qualifies as late under UK regulations, consider consulting with specialists. Not only can they provide guidance, but they can handle the process for you.
For example, latepaymentaction.com navigates the entire claims process on your behalf. That way, you can concentrate on your daily operations while our expert team ensures the best outcome for your claim.
In summary, suppliers must be proactive in tracking payments, issuing invoices, and addressing late payments. By doing so, they stand the best chance of successfully claiming compensation for late public sector payments.
What to Do About Late Payments From the Public Sector?
Under UK law, suppliers can claim late payment compensation from public sector bodies that deliver untimely payments. This ensures that your business doesn’t lose out or suffer from the impact of late payments. However, the legislation and processes around this can be complex and time-consuming.
We’ve created a simple, four-step claim process to get you the compensation you deserve without the hassle. All you have to do is follow the steps below, and we’ll handle the rest.
1. Check your eligibility
Our free Eligibility Checker will tell you if you’re entitled to compensation for late payments from the public sector. In addition, we also have a Claims Calculator so you can estimate how much compensation you can claim.
We’ll send you an electronic claim pack, which covers all the information our specialist will need to complete the claims process.
4. We’ll proceed with your claim
Once you complete the pack and send it back, we’ll start working on your claim. Moreover, we’ll give you regular updates on the status of your claim so you’re always in the loop. That way, you can rest assured that we’re doing everything we can to maximise your chances of a successful claim. Plus, we work on a no-win, no-fee basis, mitigating any potential risk for your business.
Got questions? Consult our FAQ page for comprehensive information about every aspect of the process. Alternatively, get in touch with our qualified team.
latepaymentaction.com is a trading style of Nobu Statutory Ltd, a private limited company incorporated in England and Wales, whose registered number is 14408762, and registered address is Quarry Cottage, Swincliffe Top, Hampsthwaite, Harrogate, HG3 2HY.