New laws on late payment will have very little effect
Legislation allowing small businesses to slap interest charges on late-paying hotels and restaurants has been branded as gutless by suppliers.
At present small companies can use interest charges to hit big firms and public bodies only, but this November changes to the Late Payment of Commercial Debts (Interest) Act 1998 will include small firms too.
A consultant financial analyst working for Surrey-based Simpson Fisheries said that late payers would "laugh" at the legal changes. "Collecting what is due to you is difficult enough," he said, and warned increasing charges could make slow payers even more reluctant to cough up.
"Unless the interest rate is going to be very substantial I don't think it's going to make the slightest difference," said Richard Horwell, managing director of wine cooling equipment supplier Chilla. "The court system here is a joke. We get a court date six months' ahead and the people involved have gone out of business."
A spokesman for the Federation of Small Businesses welcomed the legal changes, but said that he was unsure whether they would have a big impact on debtors.