[Gurdy]

Hello, i do some sub contract work, (1 or 2 big jobs per month,) which is handy as it pays well, the only problem is it's a drag trying to get payment from contractor, as yet i don't charge a % for late payment (30 days?), could anyone give me some advise on % to charge over the given time.

[Chris Cottrell]

I think from what I can remember you are allowed to charge interest at a rate of 10.05% per anum , not quite sure how exactly you calculate this but I think you take for example £100 owed x 10.05% = £10.05 (interest) divided by 12 months = 0.8375% per month
I may be wrong on the calc but you can find out more by googleing for "late payment act"

http://www.payontime.co.uk/calculator/index_new.html (interest calculator_

http://www.opsi.gov.uk/ACTS/acts1998/19980020.htm (the Act itself)

http://www.is4profit.com/business-advice/finance-money/late-payment-invoices-2002.html (more swoting up)

Chris

[Chris Cottrell]

I also found this example

Example
If the base rate is 4% for the six-month period when the debt became late, then the statutory interest rate is 12% (4% base rate plus 8%)
Debt is £851.06 plus £148.94 VAT = total £1,000
If this debt is 30 days late, then the interest owed is:
£ 1,000 x 12% = £120 (the annual rate)
£ 120 ÷ 365 = 32.9p (the daily rate)
32.9 pence x 30 days = £9.86 (the interest owed to date)

[Gurdy]

cheers chris that a huge help, i'll have a good look into those links as well.

[mk1]

this my mate is on all my invoices & used 



PAYMENT IN FULL IS DUE WITHIN 14 DAYS FROM INVOICE DATE. WE RESERVE THE RIGHT TO CLAIM STATUTORY INTEREST AT 8 % ABOVE THE BANK OF ENGLAND BASE RATE AT THE DATE THE DEBT BECOMES OVERDUE IN ACCORDANCE WITH THE LATE PAYMENT OF COMMERCIAL DEBTS. (INTEREST ACT 1998)