Debt Collections Handbook UK 2017

Debt Collection Reports

  • United Kingdom
  • Agriculture,
  • Automotive/Transport,

16th June 2017

Having drawn from the expertise of the Atradius Collections' local offices, the International Debt Collections Handbook explains the different stages, regulations and procedures for the UK.

Amicable phase

General

 

Handbook Report Page - Amicable Phase

 

Our collectors try to collect the debt without recourse to legal action by telephone and letters. We always try to obtain payment of the debt in full but will negotiate to agree a payment plan or a settlement figure. In order to support this process in the UK, we must issue a letter before claim, which is the start of the legal process. This is not used in all cases, only those when the collector considers that the debtor has the ability to pay and needs some strong evidence of our intentions. In England and Wales, we can issue a copy of the proceedings that will be sent to the court in the event that the debtor fails to make payment. When there is a dispute, we aim to reach an amicable solution between the creditor and debtor. We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and delivery notes, as well as standard terms previously agreed upon). All investigations are completed with the assistance and agreement of our legal team.

Interest

Late Payment of Interest Act

This act sets out to assist businesses faced with late payment problems. It does this by adding a number of rules to contracts between businesses. It is important to realise that this legislation only applies to commercial debt. It does not apply when one of the parties is not acting as a business; for example, sales to a private individual / consumer. The debt should be one that has arisen in the course of business. Both parties should be businesses, commercial entities or public sector organisations. Interest is claimed at the prevailing Bank of England rate – currently at 0.5% plus 8%. The rate is listed as the UK clearing bank base lending rate in the Financial Times and is also known as the repo rate. The rate that applies is the rate in force at the end of the day that the payment was due.

Costs

As well as interest, the supplier may also charge an amount to compensate for the costs of collecting late payments. The amount of compensation that can be claimed is determined by the amount outstanding as follows:

Handbook Report Page - Amount owed

Changes made under the Late Payment of Commercial Debts Regulations 2013 (Regulations) with effect from the 16th March 2013.

A supplier over and above the listed compensation costs may also claim any “reasonable costs“ incurred in recovering the debt as compensation.

The Debt Collections Handbook presents a snapshot of the UK's local economic situation and covers the following topics:

  • Accepted and most common payment methods
  • Types of companies
  • Legal procedures & legal system
  • Insolvency proceedings
  • Enforcement in debt, movable and immovable goods
  • Debt collections in Scotland

To read more about steps and procedures undertaken in the field of debt collection:

Download Debt Collections Handbook UK now!

 

Disclaimer

The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation, advice or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.