Irrespective of what your terms and conditions of business provide for, you are entitled to charge Late Payment Interest and Compensation under The Late Payment of Commercial Debts (Interest) Act 1998.
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.
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:
Interest Rate (Reference rate plus 8%)
|1st July – 31st December 2012||0.5%||8.5%|
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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The debtor pays our fees under The Late Payment of Commercial Debts (Interest) Act 1998