Interest on Statutorary Charges

I have been advised that the strict letter of the law allows interest to accrue on the Statutory charge from the date that the Statutory Charge falls due and not the date you applied the charge to the Debtor since the charge is statutory and therefor automatically falls due.

I have however been advised by some solicitors that a court would not see it this way and would in turn only apply the interest from the point of request.

Comments from any solicitors on this point and specifically any who have succeeded in this matter would be very much appreciated.

Dear Ashley

You are correct in that interest accrues from the date it falls due and not the date of request. Did this solicitor advise this to you recently?

Regards


Chris Harvey

I believe you will find the following the case.

Interest begins on the day after payment became due, until the date paid.

But be careful, as to who's payment terms apply.

Even though you might state 30 days on your invoices, if the customer always paid late, it might be considered such payment terms were the norm, and thus you might not have any claim for interest, as you had always accepted these so called late payments.

My question was in relation to charging interest on the original debt,

Under the statute you are entitled to interest on the late paid debt plus a compensatory charge.

My question related to charging interest on the compensatory charge.

For example.

A debt of £500 is paid late
This attracts 8.5% interest from the date it falls due until the date of payment.

Since the amount is £500 a £40 statutory charge is also due.

Now if I decided not to raise the statutory charge until The debtor ceases to be a debtor say 5 years. Then since the £40 is a statutory charge it's none payment should also attract interest - eg. 8.5% on £40 by 5 years....

Clearly there is little point if you are only charging one late payment charge but if charging an ex client for say 100 invoices over a long term ( maximum 6 years), then this could add up not an inconsequential amount.

Just wondered whether anyone else has tested this theory out.

My question was in relation to charging interest on the original debt,

Under the statute you are entitled to interest on the late paid debt plus a compensatory charge.

My question related to charging interest on the compensatory charge.

For example.

A debt of £500 is paid late
This attracts 8.5% interest from the date it falls due until the date of payment.

Since the amount is £500 a £40 statutory charge is also due.

Now if I decided not to raise the statutory charge until The debtor ceases to be a debtor say 5 years. Then since the £40 is a statutory charge it's none payment should also attract interest - eg. 8.5% on £40 by 5 years....

Clearly there is little point if you are only charging one late payment charge but if charging an ex client for say 100 invoices over a long term ( maximum 6 years), then this could add up not an inconsequential amount.

Just wondered whether anyone else has tested this theory out.

I think you are getting carried away a little.

If I understand you correctly, you want to know if interest can be added to the statutory charge of £40 as well.

I would say your off your rocker if you think a court would give you that also.

It is hard enough getting the interest due on the debt and the statutory charge as well, never mind trying to add interest to this charge.

Forget it !