Aggregate interest from serial offenders

It is my understanding of the legislation that it is the reference rate that is due. This is because the legislation didn't want to complicate the calculations with the interest rate being used changing regularly and therefore instigated the reference rate to give some stability to the calculations.

Therefore the reference rate to use now is 8.25% (0.25% base rate plus 8%) but that will be updated on the 30th June 2022.

Note it is not 0.25% but 8.25% as the reference rate is 8% above the bank of England base rate.

i admit it is confusing. So confusing, even the people who write the governments website can get it wrong.

If you want to charge the higher rate, I doubt anyone will notice and only an expert will be aware of the subtle difference.

In an environment of falling rates it benefits the supplier but in an environment of rising rates the rules benefit the late payer.

I've known lots who have gone after a late payer for a few hundred pounds of interest and compensation, just as a matter of principle.

However, I really like the idea of registering late payment claims to form a class action against serial late payers!

I'll have to think about that.

We already do something similar. We find that most people aren't willing to pursue existing customers who pay late because they are worried about goodwill and its not worth it for a small claim, but we offer a service where we go through your historic sales ledger and find all your former customers who you no longer trade with and identify all the times they late paid and aggregate their late payments to create substantial claims.

We then pursue the debts.

You may not pursue a late payer for late payment compensation and interest on one invoice, but when there are tens or even hundreds of late paid invoices, it suddenly becomes worth pursuing. And if they are no longer customers, you are not trying to protect the goodwill.