The late Payment of Commercial Debts (Interest) Act 1998 provides that in any case where payment due from a business or a public body is late, the seller is entitled to claim interest on late payment at a specified rate. Currently the rate is 8% above the Bank of England Base Rate as at the preceding 31st December, or 30th June, whichever is the more recent. Our STC provide for interest to be charged at this rate regardless of who the customer is.
While the University does not make a practice of charging interest on late payments in the ordinary course, where an invoice is 60 days old, it may be appropriate to advise the customer that interest will be charged if payment is not received within e.g. the next 14 days. In deciding whether to charge interest, you need to consider the relationship with the customer, the likely reason for non-payment and the reaction which it is likely to bring about. Please contact Accounts Receivable Team to discuss further.