Specialists in the collection of business to business debts
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Interest Charges

Late Payment of Commercial Debts (Interest) Act 1998

The statutory rate of interest is currently 8.5%pa. The charge applies from the date each invoice (or debt) becomes overdue until the invoice (or debt) is paid in full.

 

The Late Payment of Commercial Debts (Interest) Act 1998 introduced the statutory right to charge interest on late paid invoices etc.

 

The Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002 Regulations (SI2002/1675) subsequently amended the Act by adding:

The rate of interest for the purposes of the Late Payment of Commercial Debts (Interest) Act 1998 shall be 8 per cent per annum over the official dealing rate in force on the 30th June (in respect of interest which starts to run between 1st July and 31st December) or the 31st December (in respect of interest which starts to run between 1st January and 30th June) immediately before the day on which statutory interest starts to run.

The 'official dealing rate' is defined as:

...the rate announced from time to time by the Monetary Policy Committee of the Bank of England (“the Bank”) and for the time being in force as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short term liquidity in the money markets.

The currently (and previous) decisions of the Monetary Policy Committee of the Bank of England (i.e. the Bank of England interest rate) are available here.

 

We calculate interest charges on debts referred to us for collection.
Interest accrues until the invoice(s) is paid in full.

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