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  5. The late payment of commercial debts (interest) Act.
  7. VAT on compensation and interest
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VAT on compensation and interest

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12 years 2 months ago #764 by tomw
VAT on compensation and interest was created by tomw
Assume a debt of £100 overdue for 1 year

Compensation due £40 plus interest £8.50.

As a VAT registered business do I raise an invoice for £48.50 plus VAT or should this be an exempt or zero rated invoice?

Thanks in advance.

Tom

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12 years 2 months ago #765 by David J
Replied by David J on topic Re: VAT on compensation and interest
Hello Tom

You make a written demand for interest and compensation. Not an invoice. So no VAT is added. In your case, your demand is for £48.50 and increases every day with interest until paid in full.

There is more information here about making a claim for late payment interest and compensation.

Regards

David

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  1. Forum
  3. Pay on time supporter forums
  5. The late payment of commercial debts (interest) Act.
  7. VAT on compensation and interest
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