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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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. Im an electrical contractor. My account from my goods

Resolved Question:

Hi.
Im an electrical contractor. My account from my goods merchant has been on hold following a query regarding credits. I spoke there their accounts team last week whom said all further action will be on hold until they have had time to speak to their area manager. This took place last Friday, during which time I was out of the country until yesterday. I have since on my return opened post to find a letter dated last Tuesday (3 days before they spoke to the area manager) requesting full payment of account including interest and £150 recoverable costs or they will issue a winding up petition against my limited company.
I was never not gong to pay. I just needed to pay what I owe but i looks like they've never had any intention on holding my account pending further enquires. My question is: Do i legally need to pay the interest and the £150 costs? The owing money less costs and interest is £4395.80 which i will pay. Many thanks
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this.

Alex Watts :

What is the £150 made up of please?

Alex Watts :

Did you sign a contract agreeing to pay for costs etc?

Customer:

Hi.

Customer:

Ive no idea TBH. I signed a standard credit agreement when i opened my account with the merchant some 4 years ago. There is no break down for the £150 costs. I can forward you the letter I received?

Alex Watts :

If you can attach it here that would be great

Customer:

Full Size Image

Alex Watts :

Was this the first time they demanded the interest etc?

Customer:

Yes. The only other demand was a commercial debtor compensation cost. About £50 if memory serves!

Alex Watts :

When were the invoices due?

Customer:

The original invites were due a few months ago. I was waiting payment from my customer to pay but they were having financial problems. I offered to pay the merchant £2k there and then with the other £2k to follow shortly after. Th branch manager said he'd have to get back to me as their accounts have demanded the full payment. He got back to me a few weeks later by which time all this had escalated. Also to make things more complicated theres the credit issue. I can and will pay but as I've alway been waiting on them for a reply. And again now, i spoken to the manger regarding the letter and he knew nothing about it. Theres zero communication.

Alex Watts :

Interest is owed from the date the invoice should have been paid.

Alex Watts :

Under the Act are you liable for:

Alex Watts :

- £70 lump sum

Alex Watts :

- 8.5% interest from the date it became due until you pay it

Alex Watts :

But what you can do is pay the outstanding invoice amount.

Alex Watts :

Then they can NOT wind up your company as threatened

Alex Watts :

But you do owe the £70 fixed compensation and 8.5% interest.

Alex Watts :

Please use this calculator to work out what is owing>

Alex Watts :

http://payontime.co.uk/late-payment-legislation-interest-calculators

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

What about the £150 recoverable costs they're demanding?

Alex Watts :

No - its not recoverable.

Alex Watts :

£70 only.

Customer:

isn't there a process they must follow or can they just do as they please!? Ive always been waiting for them to contact me and all i get is letters in the post demanding more money, not the phone call id been promised!

Alex Watts :

No, there is no process they need to follow. The Act states they are entitled to fixed cost compensation (£70 in this case) and interest from the date the invoice becomes DUE

Alex Watts :

If they want to pursue it, they have to take it to Court.

Alex Watts :

But if you pay the debt (less the costs) the only way they can pursue it is in the County Court as a small claim

Alex Watts :

They can't wind you up for the £150 plus interest

Alex Watts :

Does that help?

Customer:

can you pen me something to state the reason why i don't need to pay the £150

Alex Watts :

Because the law does not require it.

Alex Watts :

The Late Payment of Commercial Debts (Interest) Act only states £70 is due plus interest.

Alex Watts :

Nothing else

Alex Watts :

Does that clarify?

Customer:

ok cool many thanks

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