Tuesday, February 05 12:08:01
The long-awaited Late Payments Directive will come into force next month, the Government confirmed today.
Fine Gael Meath West TD and Chair of the Oireachtas Jobs Committee, Damien English, welcomed confirmation from the Minister for Jobs, Enterprise and Innovation, Richard Bruton TD, that the Late Payments Directive will be brought in.
In response to a Parliamentary Question tabled by Deputy English on the matter, Minister Bruton confirmed that he has signed a Statutory Instrument that will bring the Directive into force on March 16th 2013.
"The enactment of the Late Payments Directive will have a hugely positive impact on small and medium businesses across the country, which rely on prompt payments to maintain liquidity and stay in business. The prompt payment for goods and services is critical to the functioning of any economy, and it's something that the Government has been determined to take action on."
"Anyone who runs or owns a small business understands just how important it is to be paid for the goods or services you provide. The Directive lays down specific deadlines for the payment of invoices, and it says that compensation will have to be paid where payments on commercial transactions are late."
"Crucially, the introduction of this Directive means that even if a payment date is not set out in the contract, the business which is owed money will still be entitled to interest on late payments once certain time limits run out. Interest will be incurred if invoices are not paid within 30 days, and even if there is no invoice, a time limit of 30 days after the receipt of the goods or services will apply. The Directive also states that the payment period in contracts shouldn't exceed 60 days, unless otherwise agreed."
"These changes will have a number of positive effects. They will discourage debtors from paying late, while providing creditors with measures to exercise their rights when they are paid late. And, as this Directive is being implemented across Europe, it will create a level playing field across EU Member States, which will be of particular importance for Irish exporting companies.
"Essentially, this should lead to a system where paying on time is the norm, and all businesses, be they big or small, will have to accept that they will be penalised if they pay late. This will significantly contribute to the liquidity and cash flow of small businesses, which is crucial for economic growth and job creation."