£40 Compensation payment

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7 years 3 months ago #1049 by wayner75
Hi Just after some advice - we are an electrical company and buy materials from our supplier - with a 60 day payment terms - we had a quiet spell and could not pay the months for:

March - Due 1 June
April - Due 1 July
May - Due 1 August

These where all paid on the 4th October and we have a clear account - the same day we receive a letter for late payment charge -

I asked for a breakdown of the figure and this is the response i got:

"Claim for compensation for late payment is claimed pursuant to Late Payment of Commercial Debts(interest) Act 1998 whereby we can claim minimum compensation of £40.00 per invoice as each invoice is a separate individual contract.
I have in fact reduced are entitlement to compensation for the sake of proportionality and I have not claimed our entitlement under the terms of the Act for interest which can be claimed at 8.50% ,30 days from date of invoice."

Are they within there rights to claim for each individual invoice??

I was in contact with one of there team all through this hard period and at no time where any additional charges mentioned - he was happy as long as we kept him in the loop.

Any advice you can give on this would be appreciated.

Wayne

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7 years 3 months ago #1051 by Safe_UK
Hi Wayne,

We can confirm your supplier is entitled to fixed costs on every single invoice paid outside of agreed terms.

Unfortunately if you didn't agree to extending credit terms before your quiet period then the charges are both due and legitimate.

Although technically interest would only begin accruing at 60 days as these are the agreed terms that over ride the default.

Our advice is pay the charges and sit down with your supplier and work out how this can be avoided next year, so you don't get charged and the supplier can forecast their cashflow.

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