SMALL firms increasingly affected by late payment are being offered relief in the form of new rights.

Concern about late payments among small firms is rising ahead of changes aimed at tackling the problem, according to a new survey from Alliance & Leicester Business Banking.

For example, in professional services, the number of small businesses citing overdue invoices as their biggest worry has climbed to 45 per cent from 27 per cent in July last year.

However, legislation coming in to force on August 7 will make it simpler for companies to claim interest on overdue debts, as well as up to £100 towards the cost of each unpaid bill.

Manufacturers and other producers have also recorded a big increase in concerns about late payment, up from 28 per cent in July 2001 to 34 per cent.

Among retailers and whole-salers, it has risen from 13 per cent to 16 per cent.

Alliance & Leicester Business Banking, as part of its Business Barometer research, surveyed 500 firms with a turnover of less than £1 million.

John Walker, policy chairman at the Federation of Small Businesses, said: "Alliance & Leicester Business Banking's figures suggest many small businesses will find the right to claim compensation useful.

"But the legislation should not be seen as the complete solution - it is just one of the tools that can be deployed as part of an active credit management system."