Statutory Interest
The right to charge interest applies to overdue accounts relating to a sale of goods, the hiring of goods or to a supply of services. The court can modify or exclude the provisions if the conduct of the supplier has been such as to make the imposition of interest, in whole or in part, against the interests of justice.
Interest can accrue from the latest of
- 30 days after the goods are supplied or the service is completed,
- 30 days after receipt of invoice (or the customer is told the amount due is payable).
- the agreed date for payment.
The "statutory interest" rate chargeable, which is simple and not compound, is the Bank of England base rate plus 8%. The increment was set to allow the small business to cover late payments by bank borrowings.
Read more about this topic: Late Payment Of Commercial Debts (Interest) Act 1998
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