Tánaiste Publishes Figures on Government Departments’ Earlier Payments to Business Suppliers
“Departments Continue to Pay Early”
The Tánaiste, Mary Coughlan, T.D, Minister for Enterprise, Trade and Employment, today (Friday, 5th March, 2010), published the latest set of composite figures from returns of Government Departments on payments made to their respective business suppliers. The figures cover the last Quarter of 2009.
“This is now the second set of composite quarterly figures to be published since the Government decision in May of last year,” said the Tanaiste. “The figures show that central Departments are making significant progress in meeting their requirement to pay suppliers within 15 days of receipt of a valid invoice. Across all Departments 97.9% of payments in value terms were paid within 15 days and this rose to 99.7% being paid within the 30 day statutory period.”
Under the new arrangements, Departments are now required to report quarterly to the Tánaiste’s Department on how they have complied with the Government commitment. The second returns published today cover the last quarter in 2009, (i.e. 1 October to 31 December). The table below shows the overall returns of Departments for Quarter 3 and Quarter 4 and also includes some revised Quarter 3 figures*.
These returns show:
- A total of 68,528 payments were made by Departments in the above period amounting to ¤1.634bn;
- 56,542 payments totaling ¤1.599bn were paid within 15 days. These payments represent 82.5 % of the total number of payments made by Departments, an increase of over 3% on revised Quarter 3 returns. In value terms 97.9% were paid within 15 days compared with 97.8% for revised Q3 figures.
- A further 8,682 or 12.7% were made between 16 and 30 days;
- Overall in value terms, 99.7% of payments during the period, amounting to ¤1.629bn, were paid within 30 days
- While there continued to be some variation between the performances of individual Departments, in respect of the number of invoices, 7 Departments were paying in excess of 90% of invoices within 15 days, (compared with 5 in the previous quarter); a further 6 Departments were paying in excess of 80% of invoices within 15 days, (compared with 7 in the previous quarter), while the remaining 2 had paid 47% and 66% of their invoices within 15 days;
- 13 Departments had paid between 96% and 100% of their invoices within 30 days, in respect of the number of invoices, while the remaining two Departments had paid 78% and 87% of invoices within 30 days.
“The latest tables show that Departments are continuing to make strong efforts to pay their suppliers within 15 days, and are playing their respective parts in assisting the cash flow of their suppliers, many of whom are Small and Medium Enterprises. I believe that the procedures and processes introduced last year are continuing to have a real impact in assisting Irish SMEs cash flow.
ENDS/ETE2171
Note for Editors
Details of the figures received from Government Departments showing payments made within 15 days and up to 30 days are attached.
In May 2009, the Government approved formal arrangements to reduce the payment period by central Government Departments to their business suppliers from 30 to 15 days. This commitment came into effect from 15 June 2009.
The aim and purpose of the new arrangements were to help ease cash flow difficulties for small business operating under the current economic environment and at the same time, set an example for businesses in the private sector to improve their payment record and pay each other more promptly.
Current Legal Position in relation to Late Payments
Late payment in commercial transactions is addressed by the European Communities (Late Payment in Commercial Transactions) Regulations 2002 (S.I. No. 388 of 2002). The 2002 Regulations transposed EU Directive 2000/35/EC on Late Payment in Commercial Transactions into Irish law.
Under the 2002 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 interest (“late payment interest”) on the amount outstanding. Interest shall apply until such time as payment is made by the purchaser. The current interest rate applicable since 1 January 2010 is 8% per annum or 0.022% per day. This rate is set as at 1st January and 1st July each year at a rate of 7 percentage points above the European Central Bank interest rate on its most recent main refinancing operation. In the absence of any agreed payment date between the parties, late payment interest falls due after 30 days has elapsed. Departments automatically include late payment interest where late payments are being made after the 30 day period.
Under the arrangements announced in May 2009, there was no change to this legal situation as a move to earlier payments by central Government Departments was done on an administrative basis only. Any question of late payment penalty interest will only arise in the context of delayed payments beyond 30 days. No penalty interest applies in cases where payments are made outside the 15 day administrative period, but within the 30 day period.
Last modified: 05/03/2010
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