The Late Payment of Commercial Debts (Interest) Act 1998 has two purposes. Firstly, to compensate creditors for the late payment of debts. Secondly, to deter late payment. It only applies to the commercial supply of goods and services where you don’t have a provision for interest in your Terms of Business.
In brief, it enables you to claim interest and compensation for invoices that are not paid on time. Interest can be claimed at 8.5% over base together with compensation at the rate of £40 – £100 per invoice.
For answers to the following questions…
- When you can claim
- The interest you can claim
- The compensation you can claim
- Inform your customers you will be claiming late payment interest and compensation
- Change your terms of business to claim late payment interest and compensation
- How to claim late payment interest and compensation
- What happens if there’s an argument over what’s due?