Interest Charges

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
My husband is self employed and I prepare all of his accounts, including invoicing to Companies for his services. One Company in particular, are constantly late in paying his invoices. Does anybody know if we can 'legally' charge interest on late payments?

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  • System
    System Posts: 100,537 🤖 Admin 🤖
    Interest Charges

    Not sure about the old invoices. Perhaps you can write to your client and give new terms i.e. if they are not paid within 30 days you will charge 1.5% per month going forward.<BR><BR>For future invoice, you can certainly include terms on the invoice which state a penalty charge will apply to late invoices. I seem to remember a directive (I can't remember from whom) stating that overdue invoices were killing the economy and interest should be charged. I imagine 1 to 1.5% should be adequate to get people paying more quickly.<BR><BR>Although 1.5% per month (~18% APR) may be excessive.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Interest Charges

    You need to look up the Late Payments of Commercial Debts (Interest) Act 1998. From 1 Nov 2002, all businesses are able to claim interest from all businesses and the public sector incurred under contracts agreed after that date.

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