Late payment charges

GC2011

Hello,

I am hoping someone can help me, please?
I am just becoming involved in a small business which has been going for a number of years. For the past few years they have been dealing with a supplier who has gone into admistration. We have now received a letter from the administrator saying we have to pay £40 plus interest for every invoice that has ever been paid late, including ones for £15 that were a day late! I know that some of these were paid late due to there being problems with the goods but I have not gone into the reasons behind each payment yet.
Do these we have to pay all of this? From the leglisation I have found, it looks like we do.

Thank you!

paddyrg

You could refuse.

bengalknights

Not if they was not chased previously by the supplier only on current invoices.
You should state to the administrator that a query was lodged and that the delay in payment was due to supplier error.

oldoakey

£40 charge for a £15 invoice that you paid a day late that's taking it to the limit if you ask me.
Do you have any terms and conditions from the supplier when you signed the credit agreement for the payment terms. I would request a copy of that original agreement (as signed by you or someone in your company) because if they don't have that they possibly don't have anything.

I would in no way agree to pay these charges and contest them to the hilt and tell the administrators that in no uncertain terms that you are not going to pay these ridiculous charges. Then get some legal advice.

I would also state that all of them were in dispute with your supplier and that's why they were paid late - what can they do to prove otherwise!

hippyadam

oldoakey wrote: »

£40 charge for a £15 invoice that you paid a day late that's taking it to the limit if you ask me.
Do you have any terms and conditions from the supplier when you signed the credit agreement for the payment terms. I would request a copy of that original agreement (as signed by you or someone in your company) because if they don't have that they possibly don't have anything.

I would in no way agree to pay these charges and contest them to the hilt and tell the administrators that in no uncertain terms that you are not going to pay these ridiculous charges. Then get some legal advice.

I would also state that all of them were in dispute with your supplier and that's why they were paid late - what can they do to prove otherwise!

£40 is the statutory amount according to the "Late Payment of Commercial Debts (Interest) Act 1998 and Late Payment of Commercial Debts Regulations 2002". It is perfectly legal for an administrator to seek to recoup these charges on behalf of the supplier.

Are the charges legal? Yes.

Do you have to pay them? Again technically yes the business does.

Is it ethical? Well that is another question entirely...

But if you were a creditor of the company that went into administration wouldn't you want the administrator to do everything they could to recoup your funds?

For more info you need to check out https://www.payontime.co.uk and in future you may want to ensure you pay your suppliers on time, every time. That way you wont be running the risk of a similar claim in the future.