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Jamie-Law
Jamie-Law, Solicitor
Category: Law
Satisfied Customers: 5036
Experience:  Solicitor
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My company, after a 4-year experience of late payment from a

Customer Question

Hello, my company, after a 4-year experience of late payment from a client company, have finally decided that enough is enough. we have a 'late payment interest' clause on all of our invoices which we have now invoked.
The sum is over £18,700.00. The client has accepted that it was their fault that the invoices were late and has agreed to pay. However, they have now severed all dealings with us for the future, so I have nothing to lose in pursuing the claim in full. They have issued a settlement agreement which claims that the amount should not be subject to VAT and even if HMRC in future decide that it should attract VAT, I would be liable to pay that £3000-odd out of the settlement amount. Naturally I don't want to leave myself liable to that.
So- the question:
would a late payment interest invoice be subject to UK VAT, please?
Submitted: 1 year ago.
Category: Law
Expert:  Jamie-Law replied 1 year ago.

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

Just to be clear, is this interest or a penalty?

Jamie-Law and other Law Specialists are ready to help you
Customer: replied 1 year ago.
Hi, not sure how to define the difference between those, but it is an invoice based on an interest charge because they didn't pay on time historically. Does that help?
Customer: replied 1 year ago.
016285 30325
or
07802 549045
Customer: replied 1 year ago.
hello, are you there please?
Customer: replied 1 year ago.
I have spoken direct with HMRC and they inform me that this is outside the scope of UK vat, SO NOT CHARGEABLE,
Expert:  Jamie-Law replied 1 year ago.

Thanks,