The Late Payment of Commercial Debts (Interest) Act 1998 (“the Act”) seeks to provide redress for small businesses to encourage payment within agreed timescales.
The Act has two purposes; firstly, to compensate creditors for the late discharge of invoices and secondly, to deter late payment.
To achieve this, the Act enables businesses to claim interest and compensation on invoices that have been paid late. Interest can be claimed at 8% over Bank of England base rate (currently 0.5%), together with compensation of between £40 – £100 per invoice.
It is key to note that acceptance of a late payment does not extinguish the right to claim for interest and compensation.
Parkers Solicitors successfully obtained a judgment for a client which confirmed that, in addition to the outstanding invoices, the sum £32,000 was also due with regard to interest and compensation on invoices paid late or, in some cases, not paid at all.
Read more about the Evolution Costs claim here: