The same right, different rules
The Late Payment of Commercial Debts (Interest) Act 1998 applies across the UK, including Scotland. Businesses that supplied Scottish public sector bodies and were paid late are entitled to the same statutory interest (8% above the Bank of England base rate) and the same fixed compensation of £40–£100 per invoice as businesses in England and Wales.
Where Scotland differs is in two areas: the time limit for bringing a claim, and the procurement legislation that governs the payment obligation itself. Both are worth understanding before assessing whether a claim exists.
The prescription period: five years, not six
In England and Wales, late payment claims are subject to a six-year limitation period. In Scotland, the equivalent is the five-year short negative prescription under section 6 of the Prescription and Limitation (Scotland) Act 1973. The clock starts from the date the interest became due on each invoice.
In practice, this means businesses supplying Scottish public sector bodies have a narrower look-back window. Any late payment interest that became due more than five years ago will generally have prescribed and cannot be claimed.
| Jurisdiction | Time limit | Governing legislation |
|---|---|---|
| England and Wales | 6 years | Limitation Act 1980 |
| Scotland | 5 years | Prescription and Limitation (Scotland) Act 1973, s.6 |
| Northern Ireland | 6 years | Limitation (Northern Ireland) Order 1989 |
The Scottish procurement framework
While businesses in England, Wales, and Northern Ireland have been governed by the Procurement Act 2023 since February 2025, Scottish public sector bodies operate under a separate framework. Procurement is a devolved matter in Scotland, and the Scottish Government chose not to adopt the new UK-wide regime for devolved authorities. Section 2(5) of the Procurement Act 2023 expressly excludes devolved Scottish authorities from its scope.
The four pieces of legislation that matter for suppliers to Scottish public sector bodies are set out below.
Prescription and Limitation (Scotland) Act 1973
Sets the five-year short negative prescription period under section 6. This is the time limit within which a late payment interest claim must be brought in Scotland. After five years from the date the interest became due, the right to claim prescribes.
Late Payment of Commercial Debts (Interest) Act 1998
Applies UK-wide, including Scotland. Creates the entitlement to statutory interest and fixed compensation on late commercial invoices. The rate, compensation tiers, and non-derogability provisions are the same as in England and Wales.
Procurement Reform (Scotland) Act 2014
The foundational Scottish procurement statute. Sets out the framework within which Scottish public bodies must conduct regulated procurement, including sustainability duties, community benefit requirements, and transparency obligations. Section 15(5)(d) requires contracting authorities to set out in their procurement strategy how they intend to ensure, so far as reasonably practicable, that payments to contractors and through the supply chain are made within 30 days. This is a procurement strategy duty rather than a directly implied contractual term. The Public Contracts (Scotland) Regulations 2015 sit alongside it and provide the detailed procedural rules.
Public Contracts (Scotland) Regulations 2015 (SSI 2015/446)
Scotland's equivalent of the Public Contract Regulations 2015 that applies in England, Wales and Northern Ireland. Sets out the detailed procurement procedural rules for Scottish public sector bodies. The 30-day payment obligation that underpins late payment claims in Scotland flows from the Late Payment Act 1998 itself, supported by the procurement strategy duty in section 15 of the Procurement Reform (Scotland) Act 2014. Remains in force. It has not been superseded by the Procurement Act 2023 for devolved Scottish authorities.
The Procurement Act 2023 and Scotland
The position is more nuanced than a simple in/out. The Procurement Act 2023 extends to Scotland (section 126) and forms part of Scots law, but its application is limited. Section 2(5) excludes devolved Scottish authorities: broadly, Scottish public bodies whose functions are exercisable only in or as regards Scotland and do not relate to reserved matters.
In practice, this means the Scottish Government, Scottish local authorities, NHS Scotland bodies, and other devolved public bodies continue to be governed by the Public Contracts (Scotland) Regulations 2015. Non-devolved bodies operating in Scotland, such as HMRC or UK government departments procuring in Scotland, are subject to the Procurement Act 2023.
Cross-border procurement. Where a devolved Scottish authority purchases from a framework established under the Procurement Act 2023, or alongside a UK contracting authority, the Procurement Act rules can apply. The Scottish Government published the Public Procurement (Scotland) Amendment Regulations 2025 (SSI 2025/392, made 3 December 2025, in force 20 December 2025) to address uncertainties at the intersection of the two regimes. Suppliers involved in cross-border arrangements should take separate legal advice on which rules govern their specific contract.
The five-year window applies. If you supplied Scottish public sector bodies, act sooner rather than later.
If you supplied Scottish public sector bodies and invoices were paid late, the Late Payment of Commercial Debts (Interest) Act 1998 entitles you to statutory interest and fixed compensation — subject to the five-year prescription period. Late Payment Action can assess whether a claim exists and, if so, purchase the entitlement outright, paying a fixed sum on completion and taking on full responsibility for pursuing the claim. Your involvement ends when you receive payment.
