The UK’s departure from the European Union, commonly known as Brexit, has had significant ramifications for various sectors of the economy. One area that concerns many suppliers is late payment claims against the public sector. This blog post will delve into Brexit’s impact on late payment claims against public sector organisations and what suppliers need to know.

Pre-Brexit Scenario: EU Directives and UK Legislation

Prior to Brexit, the UK was a member of the European Union and bound by EU directives. These directives covered a wide range of topics, including the public procurement process and late payments. 

As a result, the EU implemented the Public Contract Regulations 2015. These regulations govern the procurement of goods and services by public sector organisations within the European Union. The aim was to ensure fairness, transparency, competitive procurement processes, and the protection of public funds.

To learn more about these regulations, visit our Public Contract Regulations 2015 page.

In particular, Regulation 113 of this bill mandates that all public sector bodies and contracting authorities pay their suppliers within 30 days of receiving a valid and undisputed invoice. This rule works to prevent late payments to suppliers, ensure fairness, and promote a healthy business environment. 

Post-Brexit Changes to Late Payment Legislation

Following Brexit, the UK was no longer legally obliged to follow EU directives. However, the Public Contract Regulations 2015 remained in effect, preserving the 30-day payment rule. 

In addition, the Late Payment of Commercial Debts (Interest) Act 1998, another key legislation protecting businesses facing late payments, continues to apply.

In short, these critical pieces of legislation that protect suppliers against late payments from the public sector have not been affected by Brexit.

Late Payment Claims in the Post-Brexit Landscape

Despite the significant changes brought about by Brexit, the legal framework protecting suppliers from late payments remain robust. Businesses can still make late payment claims against public sector organisations that do not adhere to the 30-day payment rule. This continuity assures suppliers that their rights to timely payment remain protected, helping to mitigate the impact of late payments.

If you have received late payments from the public sector and would like to know if you’re entitled to compensation, browse our Claims Process page for more information.

The Future: The Procurement Bill

While the existing protections remain in place, the proposed new Procurement Bill may introduce further enhancements to safeguard suppliers from late payments. This legislation, currently under discussion, could reinforce the emphasis on timely payments. In addition, it may introduce stricter penalties for public bodies that consistently fail to meet their payment obligations.

As the legal and regulatory landscape continues to evolve, it’s crucial for businesses to stay informed. Keep an eye on our Articles section for the latest updates. 

Brexit’s Impact on Late Payment Claims: A Final Word

Thanks to Brexit, the UK is entering  a new era of independence. As a result,  many aspects of business and legislation are changing. However, when it comes to late payment claims against the public sector, the fundamental protections for suppliers remain intact. Companies retain the right to claim compensation for late payments under the Late Payment of Commercial Debts (Interest) Act 1998 and the Public Contract Regulations 2015.

If you believe you’re entitled to late payment compensation under the existing laws, check our Eligibility Checker to see if you can make a claim.

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