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Contractual Interest

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13 years 6 months ago #404 by D83
Contractual Interest was created by D83
Hi,

I have issued a client a £1000 invoice and gave them 21 days to pay. The invoice is now 6 days overdue.

I have a signed contract which states:

"Failure to pay the invoice within this agreed timeframe will result in an interest charge of 8% above the Bank of England base rate. Interest will be charged daily until the balance is paid."

However when I use your calculator for contractual interest it says I can claim £425. Is this correct?

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13 years 6 months ago #405 by David J
Replied by David J on topic Re:Contractual Interest
Hello Darren

The contractual calculator allows you to choose a daily, weekly, monthly or annual interest rate.

Your calculation has been made with the daily interest rate button checked which would give you £425.00 at 5 days overdue (1000 / 8.5% = £85.00 x 6 =£425.00). Checking the annual interest rate button would give you the same result as the statutory calculator.

You would be better off using the legislation to claim interest (which is currently 8.5%) as you can also add £70.00 compensation.

Kind regards

David

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  1. Forum
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  5. The late payment of commercial debts (interest) Act.
  7. Contractual Interest
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