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When it comes to late payments of money that your business is owed by another company or organisation, this area of law is covered by the Late Payment of Commercial Debts (Interest) Act 1998. The legislation is designed to deter late payments of commercial debts in the first place, but also ensures that if repayments are late, the business that is owed the money can be appropriately compensated.
The Late Payment of Commercial Debts (Interest) Act 1998 applies only to commercial debt, but this includes sole traders, freelancers and other self-employed individuals as well as limited companies. This legislation does not cover personal transactions or borrowing.
If your business is trying to recover interest on late payments that are owed to you, or you want to know more about the commercial debt recovery process, please contact our expert team on 0161 696 6170 to find out how we can help.
With some business dealings, the agreed reasonable interest rate for late payments will be set out in your contract with the other company or individual. If this is not the case, the maximum interest that can be charged is 8% above the Bank of England’s current base rate.
It can be difficult to balance taking action and charging interest for late payments with trying to maintain positive commercial relationships; so, if your business is faced with this issue, the expert team at Stephensons can help to handle debt recovery on your behalf, handling the communications and logistics of the entire process with professionalism and many years of experience in dealing with sensitive situations such as this. Call us on 0161 696 6170.
In addition to any interest that is owed on late payments, you are also able to charge a fee for each individual invoice that is late if your company is registered in England. The late payment fees you can charge range between £40 for invoices of a value of £999 or less, £70 for invoices with a value between £1000 to £9,999 and £100 for invoices with a value over £10,000.
These late payment charges can be applied on top of the interest for the late repayment. You can find out more about the legislation and related action for late payment of commercial debts here.
With a proven track record in achieving positive outcomes for our debt recovery clients, we can help you with tailored advice for your business and your specific circumstances. Get in touch to find out more; call us on 0161 696 6170.
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