Under the Late Payment of Commercial Debts (Interest) Act, UK businesses have a statutory right that allows them to charge interest on debts that exceed credit terms.
The UK was one of the first countries to really clamp down on the challenges posed by late payment of commercial debts, which damage the cash flows of suppliers and ultimately threaten their very survival.
The Late Payment of Commercial Debts (Interest) Act was introduced in 1998 to compensate small businesses for the cash flow problems caused by late payment, additionally helping to cover the costs of outsourcing the debt collection to a commercial debt recovery company or taking legal action.
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