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Local Authorities

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Your statutory rights with Local Authority Invoice Payments.

If Invoices are not paid within the original deadline then private companies supplying local authorities are obliged to receive the outstanding amount and in addition, a liability for statutory interest on the outstanding amount accrues for every day payment is late which can be claimed without a reminder from the Supplier. 

The statutory rate of this interest is 8 percentage points above the Bank of England’s reference rate plus a fixed amount depending on the size of the unpaid debt, and any reasonable costs associated with reclaiming the original debt. 

Initial tendering contracts cannot exclude interest for late payment or compensation for recovery of costs if paid late. Verification and acceptance procedures should be expressly mentioned in the tender documents and in the contract and strictly has to adhere to 30 calendar days unless otherwise expressly agreed and is not deemed unfair or improper towards the winning tender applicant / eventual supplier. If this is found to be the case the Supplier is entitled to full compensation as per the Late Payment Regulations. 

The UK Government sought to set an example in 2010 by setting an initial target of paying 80% of all undisputed commercial invoices within 5 working days and all due invoices within 30 days. 

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