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  5. The late payment of commercial debts (interest) Act.
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Late Compensation Fee

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10 years 4 months ago #1171 by MelPick1
Late Compensation Fee was created by MelPick1
Hi,
My husband is owed a substantial amount of money for around 35 invoices for one ex-client.
We are now at the stages of starting court proceedings to get the money owed.
My main questions are:
1. Do we have to issue a new invoice including interest added for every invoice?
2. Does the late compensation fee count for the overall amount outstanding, or for each individual invoice? (For example, on the overall amount owed, we would add £70, or £40 for each invoice? This would make the LCF around £1400, which is why I am unsure)
3. My husband is now VAT registered, but wasn't when the original debt occurred. Is he obliged to add on VAT to reissued invoices with interest to the debtor?
4. Are we able to give notice of charges in a statement format rather than reissuing 35 separate invoices?
Any credible advice is most welcome.
Thanks in advance
Mel

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10 years 4 months ago #1172 by David J
Replied by David J on topic Re: Late Compensation Fee
Hello Melanie

Please see my response to each of your questions below.

1. You can charge interest and compensation for each unpaid or late paid invoice. You do not create an invoice to do this, you create a claim. Do do this, you can use one of our template letters:
goo.gl/xLEc6u

Or you can use The Advanced calculator which will do all the hard work for you by creating the letters and tracking the daily interest and updating the amount the debtor owes: goo.gl/1qFn3

2. The Compensation fee is added separately to each unpaid invoice.

3. The interest and compensation is calculated on the invoice total. So if not VAT registered and the invoice was £100.00 that would be your claim amount. VAT registered and the claim would be based on £120.00

4. Yes you could make the claim in a statement format. Separately may be easier though if the daily interest amount is different for each invoice or if some invoices are disputed or part paid. This may be more time consuming initially but easier to manage after.

I hope that helps and please ask any other questions. More importantly, please let us know how you get on!

Best regards

David

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10 years 4 months ago #1173 by MelPick1
Replied by MelPick1 on topic Re: Late Compensation Fee
Thanks for your reply David.

I read somewhere on here that when part payment of an invoice is received, you calculate the interest on the whole amount of the invoice. Is this correct? Around 30 of the invoices are part paid, so would make the interest around £500 instead of £150 based on the actual outstanding amount, so need to confirm this.
Also, after the initial claim, can I not calculate the daily interest on the whole amount outstanding?

Thanks again for your time

Mel

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  1. Forum
  3. Pay on time supporter forums
  5. The late payment of commercial debts (interest) Act.
  7. Late Compensation Fee
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