The late payment legislation allows businesses to automatically levy penalty interest on late payments in business-to-business transactions, i.e. where payment is not received by the due date agreed in the contract or after 30 days where there is no contractual payment period specified.
Under the Late Payment in Commercial Transactions Regulation, interest at the rate of the European Central Bank rate plus 8% will apply to payments made after the 30-day payment period has expired (in the absence of a written contract specifying an alternative payment period).
As of 1 July 2017, the current rate is 8.00%, which equates to a daily rate of 0.022%. This is based on the ECB rate (as at 1 July 2017) of 0.00% plus the margin of 8%. Penalty interest due for late payments should be calculated on a daily basis.
The full SFA Late Payments Guideline is available here.