Late Payment Legislation
At Veritas Legal, we have devised our
charging structure around the Late Payment of Commercial Debt
(Interest) Act 1998 (the "Act"), so that you can
effectively benefit from FREE debt recovery in many instances,
if not all.
To get maximum
benefit from our services, you need to consider the effectiveness
of your present interest clause in your existing terms
and conditions and ultimately amend them so that you too
can benefit from the protection that the Act affords you.
In November 1998,
the UK Government introduced the long overdue legislation
to give businesses a statutory right to claim interest from
other businesses for the late payment of commercial debt.
The UK was one of the first countries in the EU to introduce
late payment legislation to help promote a culture of prompt
payment.
The Act was amended
by the Late Payment of Commercial Debt Regulations 2002 so
that "reasonable debt recovery" costs can be recovered
from your debtor with effect from 7 August 2002 in addition
to interest as defined below.
| Size
of unpaid debt |
Sum
to be paid to the creditor ("Compensation) |
| Up to
£999.99 |
£40 |
| £1,000.00
to £9,999.99 |
£70 |
| £10,000.00
or more |
£100 |
The revisions
to the legislation also include the simplification of the
calculation of statutory interest. A reference rate is now
used to determine the late payment interest rate, which is
fixed for a six-month period. The late payment interest rate
that applies in the UK is the reference rate plus 8%. The
new fixed-reference periods are:
| The
six month period |
| The Bank of England
base rate on 31st December will be the reference rate
for: |
1st January
to 30th June |
| The Bank of England
base rate on 30th June will be the reference rate for: |
1st July to 31st
December |
Period
|
Reference
Rate |
Interest
Rate
(Reference rate plus 8%) |
| 7th August – 31st December 2002 |
4% |
12% |
| 1st January – 30th June 2003 |
4% |
12% |
| 1st July - 31st December 2003 |
3.75% |
11.75% |
| 1st January – 30th June 2004 |
3.75% |
11.75% |
| 1st July - 31st December 2004 |
4.50% |
12.50% |
| 1st January – 30th June 2005 |
4.75% |
12.75% |
| 1st July - 31st December 2005 |
4.75% |
12.75% |
| 1st January - 30th June 2006 |
4.50% |
12.50% |
| 1st July - 31st - December 2006 |
4.50% |
12.50% |
| 1st January - 30th June 2007 |
5% |
13% |
| 1st July - 31st December 2007 |
5.5% |
13.5% |
| 1st January - 30th June 2008 |
5.5% |
13.5% |
| 1st July - 31st December 2008 |
5% |
13% |
If you use Veritas Legal to recover your
debts under this Act, then you will enjoy FREE
debt recovery. Even if you do not, our rates are still extremely
competitive.
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