For most types of debt, the rate is usually 8%.
To calculate this, use the steps below:
- Work out the yearly interest: take the amount you’re claiming and multiply it by 0.08 (which is 8%).
- Work out the daily interest: divide your yearly interest from step 1 by 365 (the number of days in a year).
- Work out the total amount of interest: multiply the daily interest from step 2 by the number of days the debt has been overdue.
For example, if you were owed £5,000.00 and the amount had been outstanding for 90 days:
- the annual interest would be £400.00 (5000 x 0.08 = 400)
- you’d divide £400.00 by 365 to get the daily interest: about £1.10p a day (400 / 365 = 1.0958)
- after 90 days this would be £98.62 (90 x 1.0958 = 98.622)
If you’re owed money by another business, you can charge interest on a late commercial payment and may also be entitled to late payment compensation.
If a company is late in paying for its goods or services, you might be able to claim late payment interest and compensation for the late payment. This will largely depend on your terms and conditions of payment.
If you have no specific payment terms with other businesses, the law says that payment is considered late either 30 days after the invoice has been delivered or 30 days after the goods have been delivered/services have been provided (whichever is the later).
If you have not received payment for your goods or services after this 30 day period, you are entitled to claim “statutory interest” which is interest at 8% plus the Bank of England’s base rate.
If the contract between you and the other company provides for a different rate of interest, then you can only claim that rate of interest and not “statutory interest”.
On top of claiming statutory interest, you are also entitled to claim a late payment compensation from a company that is late in paying its commercial debts. The level of compensation is dependent upon the amount of the invoice that you are claiming:
Invoice Value Late Payment compensation (per invoice)
Up to £999.99 £40.00
Between £1,000.00 and £9,999.99 £70.00
Above £10,000.00 £100.00
Remember, you can claim a compensation fee per invoice you are seeking to recover.
Please contact one of our expert county court lawyers now for your informal and friendly consultation. At Francis Wilks & Jones, we have all the county court experience needed to handle any type of county court problem. We offer quick and effective county court advice, whatever your situation. Don’t delay. Call now for a friendly consultation.