If your business has late paid invoices then you could be entitled to compensation from your customers. At CEA Ltd we can help you recover your unpaid invoices using the Late Payment of Commercial Debts regulations.
For invoices sent to limited companies, plcs and LLPs we provide a comprehensive commercial debt recovery service. Don’t let the late payment of invoices affect your cashflow – make sure you chase up your debts.
What are your rights for late paid business invoices?
The Late Payment of Commercial Debts (Interest) Act 1998 was introduced to minimise the problem of late invoice payments. This gave smaller companies the right to claim late payment interest from large businesses and the public sector.
The Late Payment of Commercial Debts regulations were added in 2002, which gave provision for statutory interest to be charged between small companies for late paid invoices.
The aim of the regulations is to provide compensation for businesses when invoices are paid late, as well as to encourage prompt payment. This means that, even if you don’t have it stipulated in your contract, you can legally claim for interest and compensation.
How much compensation can you claim for late paid invoices?
The statutory interest rate that can be claimed on business debts is 8% over the Bank of England base rate.
In addition, there are also three levels of compensation that can be charged. These are £40 for invoices under £1000; £70 for invoices under £10,000 and £100 for invoices over this. The compensation is charged for each individual invoice, so where you have a large number of smaller overdue invoices the compensation can soon build up.
Late payment compensation can be charged on business invoices of any amount – there is no minimum. It’s best to start chasing up commercial debts as soon as they are overdue. This reduces the length of time the customer takes to pay; rectifies any disputes or discrepancies and limits the risk of the business becoming insolvent.
At Civil Enforcement Agents we can help you recover your late paid invoices quickly. Our professional debt collection team will start work straight away on sending out the relevant communication to your customer.
Additional recovery fees are legislated for under the Late Payment of Commercial Contracts 2013. This makes it beneficial to use a dedicated debt recovery company to chase up your late paid invoices.
When can you charge late payment compensation from?
Late payment compensation can be claimed for unpaid business debts once the invoice is overdue. Where there are no agreed payment terms, the act stipulates that it will be 30 days from the date of the invoice.
What transactions does the late payment compensation apply to?
The Late Payment of Commercial Debts Regulations only apply for services and goods provided to registered companies.
Where you have invoiced a consumer or a business that isn’t a limited company, plc or partnership, compensation can’t be charged unless it has been agreed in your contract. However, we can still help you to chase these debts on a commission basis.
Good Day
Can you help me I have been trying to get my invoices paid for 2 months now and the company that owes me gave me a date of this week but it hasn’t been paid despite several e mails and me asking for payment they don’t pay. I have 15 invoices outstanding today I received a remittance today for 5 of the 15 invoices saying they will pay on Fri 03.
They owe me £19,348.40 and if they pay the remittance on Friday of £7014 they will still owe me £12,334.40. They said it would all be paid this week but clearly they have no intention of paying. They are a big company and I am a very small company I rely on prompt payment to pay my bills and people who have done work for me. They are bullies and take advantage I think they think I will just sit back and wait.
The Accounts manager said they wouldn’t pay my invoices as their was an issue with some work I did. It turns out this work was done in June and I have already been paid for it and its nothing to do with the invoices they owe me, I also proved to them that it wasn’t me that did the work. I didn’t think they are allowed to withhold payments on invoices that have no issue.