Dáil Éireann Debate, Tuesday - 18 May 2021
183. Deputy Marian Harkin asked the Tánaiste and Minister for Enterprise, Trade and Employment if a regulatory body is in place to ensure the enforcement of the late payments directive; and if he will make a statement on the matter. [26481/21]
Amharc ar fhreagraLate payment in commercial transactions is governed by the European Communities (Late Payment in Commercial Transactions) Regulations 2012, as amended, which gives legal effect to Directive 2011/7/EC of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions.
Under these Regulations it is an implied term of every commercial transaction that where a purchaser does not pay for goods or services by the relevant payment date, the supplier shall be entitled to late payment interest on the amount outstanding and a compensation payment. The Regulations provide that public authorities must pay for goods and services they procure within 30 days of receipt of a valid invoice or as specified in a contract and that businesses should make payments within 60 days.
In addition, in 2017 a commitment was made that public sector bodies would pay late payment interest and compensation costs (minimum of €40) automatically after 30 days without an obligation on the provider to request such a payment.
My Department collates data in respect payment made by Government Departments and makes this data available on its website. In 2019 and 2020 respectively, 98% and 97% of all invoices received by Government Departments were paid within 30 days and did not incur late payment interest or compensation.
In line with its commitment to address the issue of late payments, Government has gone a step further by requiring public authorities to pay for goods and services within 15 days. Compliance with the 15-day requirement has also been strong among Government Departments with 82% on 80% of invoices received by Government Departments having been paid in 2019 and 2020 within 15-days.
While I acknowledge that late payments to suppliers can have a negative impact on business cashflow, I would also draw the Deputy’s attention to the fact that the establishment of a regulatory body to ensure the enforcement of late payment legislation would likely increase the level of administration and reporting requirements of business. This would place an increased administrative burden on businesses, particularly the SME sector, as monitoring compliance would require payment history details to be provided by business.
The various measures undertaken by my Department and across Government to ensure the terms of the legislation have been observed have gone beyond mere transposition of the Directive and are proving very successful as is evident from the high level of compliance reported. I can assure the deputy that Officials from my Department will continue through participation in the European Commission’s Late Payment Directive Expert Group to seek ways of ensuring compliance with the Directive.
