Every business has the right to reclaim costs and interest from debtors on late payment of their commercial debts. The level at which these can be reclaimed will either be at the statutory interest rate under the Late Payment of Commercial Debts (Interest) Act 1998 or as agreed in your businesses terms and conditions. Statutory interest can be reclaimed at the rate of 8% above the bank of England base rate.
Compensation costs can also be claimed under the under the Late Payment of Commercial Debts (Interest) Act 1998, the amount of which is linked to the size of the invoice that is outstanding:
Up to £999.99 you can claim additional compensation costs of £40 per invoice
For debts between £1000 and £9999.99 you can claim additional compensation costs of £70 per invoice
On debts over £10,000 you can claim additional compensation costs of £100 per invoice
