Compensation Charges

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6 years 9 months ago #1155 by wmccarron@nrl.co.uk
Hi,

We have recently starting charging a compensation charge to our worst offenders where late payment is concerned in addition to the standard interest charge. Just wondering (as I cannot seem to find the answer anywhere) if anyone knows if this can be applied upon receipt of each late payment, each month that the account is overdue, or once per debt value?

Also, does anyone know if there is any restrictions to the number of compansation charges that can be charged to a customer?

Thanks in advance.

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6 years 9 months ago #1156 by Safe_UK
Replied by Safe_UK on topic Re: Compensation Charges
Hi Wayne,

Compensation is chargeable *per invoice* and is only applicable once to each invoice.

However if you have a customer late on ten invoices, you can charge compensation on each individual invoice.

As far as limits go, the only one would be the statute for claims of six years. You can theoretically go back and recover the costs on any invoice paid late in that entire period.

Hope that helps :)

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6 years 9 months ago #1157 by wmccarron@nrl.co.uk
Thanks for that. Very helpful.

Wayne.

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6 years 9 months ago #1158 by ashley smith
This link refers to the original guidance www.bis.gov.uk/files/file37581.pdf

Section 3, Page 15 details the 6 year rule under Statute of Limitations Act 1980.

The charge is per invoice.

It should be noted that contracts entered into after March last year are subject to enhanced charges where the fixed charge is the minimum amount claim able. In addition to the fixed claim you can also claim all reasonable costs of collection.

Google late payment regulations 2013 for guidance notes (the link is too long to copy via an iPAD).

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6 years 9 months ago #1159 by wmccarron@nrl.co.uk
Thanks Ashley. Again very helpful.

Wayne.

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