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Interest on Late Payments
1. Who Can Charge Interest?
The statutory right to charge late-paying business customers interest applies to contracts which do not already include their own arrangements for 'substantial' interest. The right was introduced in three distinct phases.
1.1 Small businesses have been able to claim interest from large businesses and the public sector since 1 November 1998.
1.2 Small businesses have been able to claim interest on late payments from other small businesses since 1 November 2000.
1.3 All businesses and public sector bodies have been able to claim interest on late payments since 7 August 2002.
- All organisations also have a right to claim reasonable debt-recovery costs.Creditors can claim an extra £40 for debts of up to £1,000, £70 for debts from £1,000 up to £10,000, and £100 for debts of £10,000 or more.
Labels: Cashflow Management, Getting Paid
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