Claim Debt Recovery Costs for Overdue Payments
The Late Payment of Commercial Debts (Interest) Act 1998 adds an implied term in business-to-business contracts for the supply of goods and services, giving at least 8% a year interest on the price, plus a fixed sum and reasonable costs of recovering the debt.
Example
If your business were owed £1,000 and the Bank of England base rate was 0.5%:
- the annual statutory interest on this would be £85 (1,000 x 0.085 = £85)
- divide £85 by 365 to get the daily interest: 23p a day (85 / 365 = 0.23)
- after 50 days this would be £11.50 (50 x 0.23 = 11.50)
The amount you are permitted to charge is determined by the amount of debt. You may only charge the business once for each payment.
Amount of Debt | What you can Charge Up to |
---|---|
£999.99 | £40 |
£1,000 to £9,999.99 | £70 |
£10,000 or more | £100 |
These amounts are set by late payment legislation.
Late Payment Calculator
Please complete the form below to calculate the late payment interest due: