Late Payment
Are you using Late Payment Legislation to deter your debtors from paying late?
On 7th August 2002, the Late Payment of Commercial Debts(Interests) Act 1998 came into full force.
For contracts made after that date all businesses may claim interest at the rate of 8% above the Bank of England base rate in addition to compensation for "reasonable debt recovery costs" at fixed scale rates between £40 and £100 per debt.
|
The Compensation Scale Rates
|
|
|
Unpaid Debt
|
Amount Allowed
|
|
Less than £1,000
|
£40.00
|
|
£1,000 to £9,999.99
|
£70.00
|
|
£10,000+
|
£100.00
|
Understanding Legislation
The Late Payment of Commercial Debts(Interest) Act was introduced on the 1st of November 1998 to encourage a better payment culture in Britain. The Government is seeking to deter businesses from paying late by giving businesses the right to claim for interest and compensation.