Late payment of debt is the bane of every business. The European Union is proposing to update its Late Payments Directive that was passed in 2000 with new stiffer penalties for those that insist on delaying payment.
The proposals, adopted by MEPs last week, demand that public bodies pay businesses within 30 days, or in exceptional circumstances, within 60 days. Businesses will have to pay within 60 days unless contractually agreed (and even then, it cannot be "grossly unfair").
Businesses will automatically be entitled to interest for late payment and compensation for recovery costs, if reasonable. Also, the interest rate to be charged will be at least 8 per cent above the European Central Bank's rate (which is already the case in the UK).
Sounds great? Sadly it won't be in force until the start of 2013.