When a contractor enters into a contract with their client or agency, one of the key clauses in the contract will be the payment terms Some client’s and agency’s finance departments will try and flannel contractors by saying it’s ‘30 working days’, but according to the law there is no doubt – 30 calendar days it is. This means that if the contractor sends an invoice dated the first of the month, the payment should be expected to arrive by the 30th day of that month. The law says that, in the absence of agreed terms between the supplier, ie the contractor, and their customer, ie the client or agent, the payment terms are assumed to be 30 days from invoice. Most, however, expect to be paid within seven days of invoice if they are a ‘weekly’ contractor, or within 30 days of invoice if they are a ‘monthly’ contractor. In some rare cases, it will state how many days after performing the service or getting a signed timesheet the client or agent must pay.īecause contractors come in all shapes and sizes, so do their payment terms. Typically, the contract will specify after how many days from the date of invoicing the payment should be made. When a contractor enters into a contract with their client or agency, one of the key clauses in the contract will be the payment terms. The Late Payment of Commercial Debts (Interest) Act 1998, and amendments in 2000, 20, mean that contractors have a statutory right to claim interest from their clients or agents who don’t pay bills on time.īut how is interest calculated? When is a payment deemed to be late? And when should interest be charged? Contractor Calculator’s late payment interest calculator, in conjunction with this guide, can work out how much contractors should charge and when. The right of any business, including contractor limited companies, to claim interest on unpaid bills from customers and clients is enshrined in UK and European law.
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