Friday 24 March 2017

Does the Late Payment of Commercial Debts Act Apply in Scotland?

Our article explaining how businesses have a legal right to add interest and compensation to unpaid invoices is one of the most visited pages on the My Credit Controllers website.

Recently we received an enquiry asking whether the legislation applies the same way in Scotland as it does in England and Wales.

The simple answer is 'yes' - the interest rate you can apply, the compensation payment and the ability to add 'reasonable recovery costs' are just the same in Scotland as elsewhere in the UK.

You can check this yourself using the website.

The original legislation that applies is the Late Payment of Commercial Debts (Interest) Act 1998. This law was first created in 1998 by the government in Westminster, but has been amended over the years - in 2002, 2013 and 2015.

Amendments from 2002 onwards were made separately by the UK parliament and by the Scottish Government, but it seems that the amendments were coordinated so that the legislation in effect remained the same both north and south of the border.

If you open up the latest version (revised), and tick the 'Show Geographical Extent' check-box on the left side of the page you'll see at the top of the page that the legislation applies in all the devolved regions of the UK.  The image below shows the marked up page with the geographical extent shown and notes to show which parts have been amended by subsequent regulation.

So, yes, adding interest to overdue commercial invoices works just the same in Scotland, so get on over to our late payment interest calculator to work out how much interest and compensation you should add.

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