EU Governments could face fines for late payments

Late payment is a major drain on the European economy and the cause of 1 in 4 bankruptcies, wiping out an estimated 450 000 jobs every year. Small businesses are most vulnerable because they depend on timely receipts to maintain cash flows, especially now banks are reluctant to issue loans.

The European Commission has drafted legislation introducing tougher penalties against late payments.

Under the proposed directive, authorities – and publicly funded bodies – would face a 5% fine for bills that aren’t paid within 30 days. They would also have to pay interest on the amount due and compensate businesses for costs incurred trying to collect late payments.

Full details are available from the press release here.