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Charging interest on overdue debts

Robin Hunter (Money Marketing, May 9) is correct in stating that IFAs may charge interest on overdue debts but I thought I would bring to your attention the changes to the Late Payment of Commercial Debts (Interest) Act 1998 that will come into effect in August.

From August 7, 2002, UK businesses will benefit from new European legislation. The new legislation will complement the UK&#39s existing Late Payment of Commercial Debts (Interest) Act, which was to have been introduced in three phases.

The third and final phase was originally due to be implemented in November 2002, to allow all businesses and the public sector the right to claim interest from all other businesses and the public sector.

The EC directive will bring this final phase forward, thereby giving all businesses, regardless of size, the right to claim interest on late payment. It also has additional benefits including:

•To allow creditors to claim a fixed sum of compensation should late payment happen. The compensation is to cover debt recovery costs,

•To allow all businesses and public sector bodies to challenge contractual terms that do not provide a substantial remedy for late payment;

•To provide SMEs with the right to have appropriate organisations act on their behalf and challenge contractual terms that try to remove or alter their right to statutory interest and

•To create a reference rate which will be used to determine late payment interest rate. The late payment interest rate is the reference rate plus 8 per cent.

Guidance about the new late payment legislation can be found at the Better Payment Practice Group&#39s website:

Claire Symonds

Better Payment Practice Group


BFS in bid to attract Invesco Peps

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Forums focus on depolarisation

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Sipp gives people chance to make their own choices

Following Philip Rose&#39s comments about the launch of our Sipp (Money Marketing, May 16) I wish to clarify the position. Our Sipp will be a framework for investment. It is a wrapper, not an investment product – therefore not subject to the “better than best rules”.Investment can be made to absolutely any collective or share […]

Blowing the whistle on World Cup skivers

Although lazy, the Diary has never really been a skiver (putting on a croaky voice to call in sick is just too much effort).But the rest of the country is quite dedicated to the noble art, according to the latest study by the Centre of Economics & Business Research.Apparently, absenteeism will be so rife during […]


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