2 Amendment of the Late Payment of Commercial Debts (Interest) Act 1998
1 Section 4 of The Late Payment of Commercial Debts (Interest) Act 1998 (period for which statutory interest runs) is amended as follows.
2 After subsection (2) insert—

“2A The relevant day for a debt is—
(a) where there is an agreed payment day, that day, unless a different day is given by subsection (2D), (2E) or (2G);
(b) where there is not an agreed payment day, the last day of the relevant 30-day period.
2B An “agreed payment day” is a date agreed between the supplier and the purchaser for payment of the debt (that is, the day on which the debt is to be created by the contract).
2C A date agreed for payment of a debt may be a fixed date or may depend on the happening of an event or the failure of an event to happen.
2D Where—
(a) the purchaser is a public authority, and
(b) the last day of the relevant 30-day period falls earlier than the agreed payment day,
the relevant day is the last day of the relevant 30-day period, unless subsection (2G) applies.
2E Where—
(a) the purchaser is not a public authority, and
(b) the last day of the relevant 60-day period falls earlier than the agreed payment day,
the relevant day is the last day of the relevant 60-day period, unless subsection (2G) applies.
2F But subsection (2E) does not apply (and so the relevant day is the agreed payment day, unless subsection (2G) applies) if the agreed payment day is not grossly unfair to the supplier (see subsection (7A)).
2G Where the debt relates to an obligation to make an advance payment, the relevant day is the day on which the debt is treated by section 11 as having been created (instead of the agreed payment day or the day given by subsection (2D) or (2E)).
2H “The relevant 30-day period” is the period of 30 days beginning with the later or latest of—
(a) the day on which the obligation of the supplier to which the debt relates is performed;
(b) the day on which the purchaser has notice of the amount of the debt or (where that amount is unascertained) the sum which the supplier claims is the amount of the debt;
(c) where subsection (5A) applies, the day determined under subsection (5B).
2I “The relevant 60-day period” is the period of 60 days beginning with the later or latest of—
(a) the day on which the obligation of the supplier to which the debt relates is performed;
(b) the day on which the purchaser has notice of the amount of the debt or (where that amount is unascertained) the sum which the supplier claims is the amount of the debt;
(c) where subsection (5A) applies, the day determined under subsection (5B).”

3 Omit subsections (3) to (5).
4 In subsection (5B), for “subsection (5)(c)” substitute “subsections (2H)(c) and (2I)(c)”.
5 In subsection (6), for “subsection (5)(a) has effect as if it” substitute “subsections (2H)(a) and (2I)(a) have effect as if they”.
6 In subsection (7A)—
(a) for “(3C)” substitute “(2F)”;
(b) for “(3B)” substitute “(2E)”.