Under the Late Payment of Commercial Debts (Interest) Act 1998 and subsequent regulations (2002, 2013), you are legally entitled to claim fixed compensation for every overdue commercial debt.

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Statutory Compensation Rates

The compensation you can claim depends on the value of each overdue payment:

Value of unpaid or late paid debtCompensation Entitlement
Up to £999.99£40.00
£1,000.00 to £9,999.99£70.00
£10,000.00 or more£100.00

Compensation Entitlement is not subject to VAT

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Key Benefits of Statutory Compensation

No court judgment required – These charges apply automatically when payment is late. You don’t need a County Court Judgment to claim them.

No advance notice needed – Debtors don’t need to be informed in advance. These charges are calculated in accordance with an Act of Parliament and apply by law.

Applied per overdue payment – We calculate the relevant charges for each overdue invoice and add them to the total amount we recover from the debtor.

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How we apply these charges

 When we take on a case, we automatically:

  1. Calculate the appropriate Compensation Entitlement based on each debt value
  2. Add this statutory compensation to the total amount owed
  3. Pursue the full amount (original debt + compensation + interest) from the debtor

This ensures you receive the maximum recovery you’re legally entitled to – at no extra effort on your part. The “Statement of Debt” sent to the debtor, includes a breakdown of the various additional charges added to the debt.

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Legal Foundation

These statutory charges are established under:

View full legislation details: www.debtcollectionservice.uk/legislation/

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Questions about entitlement to add Compensation Entitlement? 

Our team can explain exactly what you’re entitled to claim for your specific debts.

Contact us today:📞 0117 370 4236✉️ office@debtcollectionservice.uk

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