× Welcome to the late payment of commercial debts (interest) act. Forum!

Post questions here regarding the use of the Late Payment Legislation

Debt recovery costs

More
7 years 5 months ago - 7 years 5 months ago #1976 by angellily
Replied by angellily on topic Re: Debt recovery costs
Hello Helen
i support the point of view of site admin as he says:-

Yes you must include the initial invoice amount including any VAT.
The debt recovery cost does not effect the daily rate of interest.

The daily rate of interest is calculated on the invoice amount only.

So if the invoice plus VAT was £1000.00

Your daily interest rate is: 0.2329 pence per day

If payment was 10 days late that means £2.33 in interest is owed.

On top of that you will then add your compensation. Of £40, £70 or £100 depending on the invoice amount.

I hope that helps

Best regards
angellily

Please Log in or Create an account to join the conversation.

More
5 years 5 months ago - 5 years 5 months ago #3094 by lesley@ukcrosshire.co.uk
With regards to compensation claims and whether to charge on each invoice or consolidate the total amount. This is from the Credit Protection Association -

'Each transaction is viewed as an individual debt, so effectively the compensation can be calculated and applied to each individual invoice.'

We are going through this at the moment with a largish Company that owes us just over £10,000. This is the third time that we have reached this point with this particular Company. Not so much money previously. From now on it is strictly Pro-Forma invoices only for them, after they have paid what they owe.

We sent them an invoice detailing all the individual invoices with daily interest calculated and debt collection fee on each individual invoice. Now they are querying whether these collection charges are legal. In honesty, I just wanted to make them sit up and take notice. The additional invoice totaled £680.00. I have said that we would accept a consolidated collection fee of £100 if paid by a specified date. We will wait and see what happens.

Please Log in or Create an account to join the conversation.

More
5 years 5 months ago #3096 by j.salmon@cpa.co.uk
Hi Lesley,

Of course the charges are legal. Direct them to this website or the legislation.

Just one thing. You mention that you are thinking of switching to proforma invoices from now on.

Proforma invoices may help you avoid the VAT cash flow issue but they can't legally be paid late and therefore you will not be able to apply late payment charges or interest to them.

Just one thing to consider.

Please Log in or Create an account to join the conversation.

More
5 years 5 months ago - 5 years 5 months ago #3097 by lesley@ukcrosshire.co.uk
Thanks for your reply.

I think they know it's legal and are trying to use another stalling tactic, apart from he's on holiday, she's on holiday, he's off sick etc.,

With regards to the Pro-Forma invoices, if they don't get paid before we arrive on site then we don't go. We have had to go down this route before with this particular company. They were on Pro-forma for 6 months. Then they had an urgent job come in after office hours, so we went ahead without a pro-forma. This 'normal' invoicing went well until recently when they are now playing silly buggers again.

Their hires office get the right hump on when we tell them, no money, no operator.

Just about to send them their account statement to end of September with a big red STOP across it.

Always seems that it is the bog Companies that think they can ride rough over the small Companies. Well, not this one.

Please Log in or Create an account to join the conversation.

More
5 years 5 months ago #3098 by j.salmon@cpa.co.uk
ah ok - understood - yes that makes sense.

Please Log in or Create an account to join the conversation.

More
5 years 3 months ago - 5 years 3 months ago #3201 by appslure
Replied by appslure on topic Re: Debt recovery costs
It’s really a cool and useful piece of information. I’m glad that you shared this useful information with us. Please keep us up to date like this. Thanks for sharing.

Please Log in or Create an account to join the conversation.

Time to create page: 0.169 seconds