Interest payable on late payment
5.—(1) Paragraph (2) applies where—
(a)the whole or any part of the amount required to be paid by a manufacturer or supplier under regulation 3 is not paid in accordance with table 1 of Schedule 1 and so an amount is overdue; or
(b)the whole or any part of the amount required to be paid by a manufacturer or supplier under a direction given under regulation 4 is not paid in accordance with that direction, and so an amount is overdue.
(2) Where this paragraph applies, the manufacturer or supplier is liable to pay to the Secretary of State interest, calculated in accordance with paragraph (3) read with regulation 1(4) and 7(4), on the amount referred to in paragraph (1)(a) or (b) which is overdue until that amount is paid.
(3) The interest payable under paragraph (2) shall be simple interest calculated from day to day at a rate of 2.5 per cent per annum over the Bank of England base rate as it may be from time to time and applied to any amount outstanding on that day.
(4) For the purpose of this regulation—
the “Bank of England base rate” means—
the rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short term liquidity in the money markets; or
where an order under section 19 of the Bank of England Act 1998(1) (reserve powers) is in force, any equivalent rate determined by the Treasury under that section.