This FAQ deals with the steps you can take to reduce the risk of this happening, and what you can then do to both get paid what you're owed and the legal position around claiming interest.
State your terms
- State the 'terms' of payment on every invoice i.e. the date it must be paid by, or the number of days within which to pay.
- Bear in mind practices are very busy, and a well organised practice will have a set day at least once a month to lock themselves away, login to the practice account, set up new payees and make payments, so practices therefore tend to find it much easier to pay their locums once per month.
- The UK government says that if you agree a payment date, it must usually be within 30 days for public authorities such as an NHS Trust, or within 60 days for 'business' transactions, such as GP practices. You can agree a longer period than 60 days for business transactions, but it must be fair to both you and the practice.
- Be aware that if you're contributing to the NHS pension scheme, you must not leave submitting your contribution for work that was carried out more than 10 weeks previously.
- If you do not agree a payment date, the law says the payment is late 30 days after either the customer gets the invoice.
Clear, consistent invoicing
- Most practices pay by BACS, so always show your account number and sort code, and in the same place on the invoice each time, and state this as your preferred option.
- Just in case, give your account name too in case they need to pay by cheque.
Cockup vs conspiracy
- A likely cause for late payment is the practice simply being busy, or someone being on holiday.
- LocumDeck includes a simple way to resend an invoice, highlighting its due date.
- Failing that, a quick phone call might help.
Terms & Conditions
- Having clearly defined T&Cs makes it much easier to stand your ground if a payment is late.
- LocumDeck includes its own fully-customisable T&Cs pick-n-mix. The default late payment text is "If delayed payment results in the local Area Team refusing to accept my NHS pension contributions relating to any work at this practice, I reserve the right to later charge an additional 20% on top of my rates to compensate me for loss of NHS pension benefits."
- Some members copy this text into LocumDeck's 'other' box below the default text, and substitute 20% for 14.38%, just to make it simpler.
- 14.38% is the statutory employer's contribution for NHS pension scheme; if the payment is so late that the work becomes unpensionable under the 10-week pension rules, at least you don't have to pay anything back.
Charging interest on a late payment
- Once you've taken reasonable steps to clarify with the practice that your invoice has not been paid, you can then generate an invoice for the interest as stated in your T&Cs.
- Apply the interest to the full amount, including any pension contributions; the interest charge is itself non-pensionable.
- Send a new invoice if you decide to add interest to the money you’re owed.
- LocumDeck allows you to cancel an existing invoice for the original amount and then issue a credit note with an explanation. To keep things simple, we recommend not to do this until.
- You can also charge a practice a fixed sum for the cost of recovering a late payment on top of claiming interest from it.
- The amount you’re allowed to charge depends on the amount of debt. You can only charge the practice once for each payment.
Charging statutory interest
- The interest you can charge if another business is late paying for goods or a service is ‘statutory interest’ - this is 8% plus the Bank of England base rate for business to business transactions.
- You cannot charge statutory interest if you've already stated a different interest rate in your T&Cs.
- You cannot use a lower interest rate if you have a contract with public authorities.
If all else fails
- It's important that you do not allow yourself to be bullied, coerced or made to feel under pressure in any way to forgo late payment interest or a debt recovery.
- Even if you're not a member of your Local Medical Committee, get in touch with them - anonymously if you prefer - to pass let them know what's happened. The LMC are not just there to represent members, they're also there to ensure that employing practices behave responsibly for all concerned.
- Failing that, contact your trade union.