Interest and Compensation on late payments
Under the Late Payment of Commercial Debts (Interest) Act 1998 you are entitled to be compensated by your debtors who have gone over the agreed payment terms of your invoice. Not only does this provide you with compensation for the reduced cashflow but it acts as a deterrent to your debtors from paying invoices late in the future.
This act is only applicable to the commercial supply of goods and/or service and if you do not have a provision for interest built into your terms of business.
What you can claim:
· Interest at 8% over the current Bank of England base rate
· Compensation between £40 & £100 per invoice (depending on inv. value)
· For orders placed after the 16th March 2013 your reasonable costs of collecting the debt, providing these costs have not been covered by the compensation rates outlined above.
Are your invoices eligible?
Providing your invoices meet the following criteria you are able to add the additional charges outlined above.
Both you and your debtor are acting in the course of business.
You have supplied goods and / or services
The contract is not for a consumer credit agreement
The contract does not contain a provision for interest
Try our calculator to the left to see how much you are owed. Please note our calculator doesn’t include any additional reasonable costs, however, if you instruct us to act on your behalf we will add our costs making this a free service for you.