Terms and conditions- 30 day payment "rule"....

[ameliagrey]

Someone has told me that when you invoice a company, payment within 30 days is the standard legal requirement.

I'd never heard of this, TBH, but what they are saying is that if the company wants to offer other terms they must do so at the time of awarding the contract to you, otherwise the legal position is they pay in 30 days- after which you can add interest/late payment fees.

This query relates to one particular type of work, but the person who told me this implies the 30-days rule applies to all payments, any business.

Is this right?

Unless other terms are agreed the law is that there is a credit period of 30 days from either the date the goods or services were delivered or the date on which the invoice was issued, whichever is later. As long as they pay within that credit period you cannot charge interest. You can agree a shorter credit period but you cannot impose one. This agreement doesn't have to be at the time the contract is awarded but there is really no incentive for them to agree at any other time.

If they exceed the credit period you can charge interest. If nothing has been agreed in advance the interest will be at 8.5% pa (8% over the reference rate which is currently 0.5%). You cannot add on any late payment fees unless these have been agreed in advance. You can, however, add on a debt recovery cost of £40 for debts less than £1,000, £70 for debts from £1,000 to £10,000 and £100 for debts of £10,000 or more.

In practise many businesses take longer than 30 days to pay. For example, payment by the end of the month following the invoice month is fairly common. The amount of interest due for this is generally so low that it isn't worth the hassle and possible damage to your relationship with the customer to try to collect this.

payontime.co.uk/

For all the info you need!