We have previously reported how SME’s in the UK are wasting hours chasing late payments and how they are impacting the mental health of business owners. This is a longstanding issue and not just something that has come about from the current pandemic.
Did you know you can add interest and additional fees to your late payments under the Late Payment of Commercial Debts (Interest) Act 1998? Many business owners don’t realise they can and why wouldn’t you, when it is additional revenue for your business. The act was specifically introduced to compensate creditors for late payments and more importantly, to deter late payments.
What can I claim?
If you are owed money from another business, you can claim interest of 8% above the Bank of England base rate. Under the Late Payment of Commercial Debts Act (Interest), you are also entitled to charge a fixed amount to cover some of the recovery costs. Below, we have set out those charges:
Up to £999.99 – £40
£1,000.00 to £9,999.99 – £70
£10,000.00 or more – £100
Depending on the circumstances of the debt, you may also be able to recover your reasonable debt recovery costs.
How do I know if I am eligible to claim this?
You can claim statutory late payment interest, compensation and costs, if the following applies:
- You have supplied goods and/or services
- Your contract/terms of business does not contain an interest provision
- The goods and/or services were bought for commercial use
- The contract isn’t a consumer credit agreement
If you are struggling with late payments and have exhausted your in-house collections process, contact our team today to see how we can help. We offer FREE advice regarding your debts and will run through the following before you even have to instruct us:
- Honest opinion about the likelihood of recovery
- Tell you if we think we can help
- Set out our strategy for recovery
We also work on a no collection, no fee basis so if we aren’t successful in recovering your monies, you don’t pay a penny!