Nobody Like's not Getting Paid
Here at Social Media Manager Ireland we are customer obsessed, we want our clients to be 100% happy with the services we provide. We also, like all organisation like to be paid on time for our services. Let's face it nobody likes late payments, do they?
Your invoice due date is clearly stated on all of our invoices, please ensure you settle your invoice on or before the due date to avoid late charges and adminstrations fee's.
Interest Rates for Late Payments
The European Communities (Late Payment in Commercial Transactions) Regulations 2012 provide that 'interest' shall be payable in respect of a late payment.
The Regulations, which apply equally to the public and private sector, provide an entitlement to interest if payment, in respect of a commercial transaction, is late.
What is the Current late Payment Interest Rate?
With effect from 1 January 2021, the late payment interest rate is 8.00% per annum (that is based on the ECB rate as at 1 January 2021 of 0.00% plus the margin of 8%). This rate equates to a daily rate of 0.022%.
Penalty interest due for late payments should be calculated on a daily basis.
Unless otherwise specified in an agreed contract, the penalty rate is the European Central Bank main refinancing rate plus 8 percentage points.
The ECB rates in force on 1 January and 1 July apply for the following six months in each year. Only one ECB rate will apply to a late payment – that is the ECB rate in force on the payment date.
The ECB rate can be checked on the Central Bank the Financial Services Authority of Ireland website.
How to Calculate Late Payment Interest
To calculate the interest due on a late payment, the amount of the debt should be multiplied by the number of days for which the payment is late, multiplied by daily late payment interest rate in operation on the date the payment became overdue.
- amount of debt: €500
- number of days late: 25 days
- late payment interest rate in operation on the date the payment became overdue: 8.00%
- daily interest rate in operation on payment date: 0.022%
Calculation as follows:
1000 x 25 x 0.022 = 550 = €5.50 (550 divided by 100)
Please also see the calculator on the European Union website. Follow the 3 easy steps to see how much interest you could be due.
Interest accumulates on a daily basis, so the longer the debt remains unpaid, the more interest Social Media Manager Ireland are due. If our client ignores our request for late payment interest and compensation, then we will contact you again to chase up, explaining that interest is continue to accrue.
Who the Late Payment Regulations Apply to
The European Communities (Late Payment in Commercial Transactions) Regulations 2012 apply to “commercial transactions” in both the public and private sectors. They do not apply to:
- contracts made before 16 March 2013
- transactions with consumers
- debts that are subject to other laws, for example insolvency proceedings
Late Payment Interest and Compensation for Recovery Costs
Where late payment interest falls due, in addition to the amount of late payment interest, Social Media Manager Ireland is also legally entitled to compensation of recovery costs as outlined in the schedule to the Regulations.
Social Media Manager Ireland is automatically entitled to compensation costs without the necessity of a reminder and, therefore, is not required to cite evidence of having incurred recovery costs.
It is not necessary for the client to have been notified in advance of your intention to charge late payment interest and compensation costs and you do not have to refer to it in your contract.
Compensation Payments Under Late Payment Regulations
Compensation for recovery costs should be paid automatically to the supplier without the necessity of a reminder. The Regulations provide that the following “Flat Rates” should be used:
Schedule of Compensation Costs:
|Not exceeding €1000||€40|
|Exceeding €1000 but not exceeding €10,000||€70|
In addition to the compensation for recovery costs set out in the above Schedule, the 2012 Regulations also entitles Social Media Manager Ireland to obtain further recovery costs, for example, the cost of using a Solicitor or employing a debt collection agency.