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Payment of Debt Act - Compensation

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13 years 10 months ago #337 by dgratton
Payment of Debt Act - Compensation was created by dgratton
I understand that this Act allows creditors to impose interest to any late payment (as defined by the act) and also charge a flat rate of £40 compensation in my case. My query is how often can you levy the £40 compensation. If I add £40 compensation to the outstanding invoice amount and then submit the invoice, can I then charge the £40 again if the new invoice has not been paid within 30 days (or as per agreement)?
Any help in this matter would be appreciated or if anyone has any previous experience I'd be very interesyed to hear.
Thanks

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13 years 10 months ago #339 by David J
Replied by David J on topic Re:Payment of Debt Act - Compensation
Hello David

The entitlement to compensation depends on the size of the debt.
    Up to £999.99 =£40.00
    £1.000.00 to £9.999,99 = £70.00
    £10.000.00 or more = £100.00
You only apply the compensation once. From there on, interest will continue to accrue at a daily rate until the interest, debt and compensation are paid In full.

When a purchaser pays late, you should make a written demand for the interest and/or compensation for debt recovery costs. You do not raise an invoice.

I would recommend that you read the Users guide to the legislation and pay particular attention to these pages.

How to calculate late payment.
How to collect late payment interest and compensation

I hope this helps.

David

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  1. Discussions forums
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  5. The late payment of commercial debts (interest) Act.
  7. Payment of Debt Act - Compensation
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