Do you know how much you can legally claim back from your debtors?
Many people are unaware of the laws behind late payment charges, so we are here to help.
This blog shows the simplified version of what the Late Payment of Commercial Debts Act 1998 really means and how it can benefit you and your business.
When instructed Darcey Quigley attach late payment interest, compensation and reasonable costs to the debt, pursuing your debtor to pay all the balances. The best outcome being - Free Debt Recovery.
A recent client review found that we had successfully recovered 93% of all additional costs for one of our loyal customers, meaning they only paid £700 to recover over £140,000 of outstanding debt from their debtors.
This illustrates how cost effective using our service is before going down the legal route or claiming on your insurance.
What does the law mean?
The Late Payment of Commercial Debts (Interest) Act 1998 compensates creditors for the late payment of debts, as well as deterring debtors from late payment.
This act exclusively applies to the commercial supply of goods and services where there is no provision for interest in the creditors company Terms of Business (T&Cs).
The act entitles creditor’s to claim interest, compensation and reasonable costs on unpaid debts.
When can you claim?
If your customer hasn’t paid on time, you are entitled to claim money from them, providing: • You supplied goods and/or services • Your buyer bought for business purposes • The contract is not a consumer credit agreement • The contract does not contain any kind of provision for interest on overdue invoices or other solutions for non-payment.
What can you claim?
Interest: You can claim interest at 8% above the Bank of England base rate from the date the invoice is due (at the end of the agreed credit window) to the point when it’s paid. You have up to six years to make that claim.
Compensation: This can be claimed for every overdue invoice – you can even claim it if an invoice has now been paid, providing you’re still within the six-year window.
Reasonable costs: The compensation is intended to cover your costs for recovering the debt but if these exceed the above figures, you can claim what hasn’t been covered.
This could be the cost to your business of implementing credit control procedures and/or hiring a commercial debt recovery agency.
For more information regarding what you can claim from your debtors or if you have any outstanding accounts that you are struggling to gain payment from - get in touch.