The Late Payment of Commercial Debts (Interest) Act 1998 was introduced for the purpose of compensating Creditors for the late payment of commercial debts and to penalise those Debtors who exceed payment terms and misuse their supplier’s credit facilities.
In other words, not only should the debt be repaid, but there is provision late payment charges and interest. Here, our commercial debt recovery solicitors go into some detail about who can claim, how much can be claimed and the claiming of late payment interest.
(Click here for an article about how our debt recovery solicitors can help directors pay themselves).
Can Everyone Claim Charges for the Late Payment of Commercial Debts?
No, The Act relates purely to Commercial debts (business-to-business transactions). This includes: Limited companies, sole traders, freelancers and anyone else who falls into the self-employed category. Claims can be retrospective, too, for up to 6 years.
What Can I claim in Late Payment Charges?
The amount that a Creditor is entitled to claim is as follows:
|Amount of Debt
||Late Payment Charge
Can I Claim Interest as Well?
Yes. You will be entitled to claim Statutory Interest which is currently 8% above the Bank of England’s base rate p/a.
Alternatively, if your Terms and Conditions include provision for interest you may be entitled to claim contractual interest.
What are Reasonable Costs?
In some cases it is possible to claim any ‘reasonable costs’ that have been incurred in collecting your debt as well as the fixed costs. Our debt recovery solicitors will advise.
Contact our Debt Recovery Solicitors About Charges for the Late Payment of Commercial Debts
Our Debt Recovery Solicitors are experienced in claiming charges and interest for the late payment of commercial debts. If your company is suffering from a late payment, please contact us or call us on 01922 616306 for a FREE initial discussion.