Vital Agri firms aware of looming changes to late payment law
Leading North West accountancy firm Mitchell Charlesworth is urging Agri firms to be aware of looming changes to late payment law.
Mitchell Charlesworth which specialises in accountancy for small to medium sized businesses said the coalition government has announced it will fast-track adoption of the EU late payment directive so that it can become a UK law in 2012, ahead of the 2013 deadline.
Mitchell Charlesworth partner David Darlington said the EU regulations set 30 days as standard terms for public and private sector organisations to pay invoices.
This is very good news indeed for a lot of small firms managing tight cash flow, he said. For too long good businesses have been undermined – some fatally – by slow paying clients particularly big firms and the private sector. So we strongly urge firms to ensure they are fully aware of this legislation so they can actively enforce it as part of their credit control systems.
Mr Darlington said the main points in the directive include public authorities having to pay suppliers within 30 days of being invoiced. He added that the directive introduces a cap on the maximum contractual payment period at 60 days, unless other terms are agreed.
Businesses will also be automatically entitled to claim interest on late payment and claim around 35 for recovery costs. The statutory interest rate will rise to at least 8 per cent, bringing it into line with the current UK standard.
In most cases payment terms beyond 60 days will be termed grossly unfair and hence unlawful.
Mr Darlington said: Mitchell Charlesworth manages accounts for many SMEs across the region and there has long been a concern that larger companies are improving their cash flow at the expense of suppliers by delaying payment. Invoice management is a critical part of any business and it is essential that all business owners are clear on where they stand.
In the past legislation added to late payment rules has been little used. The new limits which the directive introduces will help to clamp down on unfair payment terms and encourage a change in culture ensuring that paying late is simply unacceptable.
For further information contact a member of the Mitchell Charlesworth team in Liverpool: 0151 255 2300 Manchester: 0161 817 6100 Chester: 01244 323051 Warrington: 01925 635141 Widnes: 0151 423 7500.
Mitchell Charlesworth
Mitchell Charlesworth was formed over 125 years ago and has grown into one of the largest independent practices in the North West.
Operating with over 150 staff from five offices in Manchester, Liverpool, Widnes, Warrington and Chester the firm of Chartered Accountants and Business Advisors provides a comprehensive range of services in the areas of financial and taxation advice.
Mitchell Charlesworth excel at working closely with its clients to ensure they maximise their full potential by using their experienced partners and staff as well as their extensive contact base in the financial markets to achieve the best results.
Whether looking at business improvements, extending trade alternatives or ensuring the best deal is obtained in a business acquisition or disposal the services are led by partners with years of experience supported by a qualified and enthusiastic staffing team delivering:
* Statutory audit* Accountancy* Corporate & personal taxation* Company acquisitions and disposals* Corporate recovery and insolvency* Management buyouts* Due diligence* VAT* Tax planning* Pensions and investment advice* Payroll