Clarification please

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8 years 6 months ago #908 by mglassey
There seems to be conflicting information going around. Could I ask you to clarify a point please?

In a Users Guide issued by the Department for Business Innovation & Skills it states;-

'If you do not pay within the deadline, you are obliged to automatically pay the outstanding amount that includes, daily interest......plus the fixed amount....the supplier is not obliged to remind you that payment is outstanding.'

Some are of the opinion that this means the public authority must police their payments & pay interest etc to the supplier, instead of the supplier sending us a request for late payment.

Any clarification or comments would be most welcome.
Thank you

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8 years 6 months ago #909 by David J
Replied by David J on topic Re: Clarification please
Hi Margaret.

It would be fair to say that there are many parts of the amendments which are unclear at the moment. Government have not done the private sector any favours. In fact they have made it a lot worse (or better if you are a large company). It is going to take time to work out the best way of applying the legislation.

As you have noted, the public sector must pay within 30 days. It is of course still up to the supplier to make that claim so in answer to your question, I would think that you only have to pay interest and compensation when you receive a claim from a supplier. Using the legislation is still optional.

However public authorities, you should be paying your suppliers within 30 days without the supplier having to resort to using the legislation. It is the right thing to do and is the example public authorities are being asked (told?) to set. The 'mystery shopper' will allow suppliers to anonymously report public authorities not complying with the new legislation. It is also worth noting that a supplier has up to 6 years to make a retrospective claim for interest and compensation on each invoice paid, but paid late. This allows the supplier to keep the business if he feels that making claims for late payment could damage the relationship, then claim later. A habitual late payer may be faced with thousands of pounds in claims at a later date.

Just my opinion but I'm sure other readers have a different view.

Regards

David

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