Chasing a debt

[SodaPop]

Hi,
For a few months last year I worked as a software contractor via a limited company that I set up. I only worked on a single contract and I ended up not getting paid.

The invoices I issued were for just over £40,000 plus VAT (I am VAT registered).

The owner of the company that I did the work for has strung me along since September, just repeatedly saying that he "needs a few weeks to get the money together".

Things are not very clear cut because

1) I never got a signed contract from them (they sent me one to sign, but never signed it themselves)
2) The company is in the UK, but most of the project's workforce as actually employed by a foreign company (owned by the same owner), so I think that they could chose to shut down the UK company if they wanted to

I do have some emails that I think show that there was a contract in place, including responses to my invoices that acknowledge receipt but then say that they are not sure when they will get paid.

I have waited patiently for them to sort their issues out, but I would now like to move the process forward, including taking legal action if necessary.

I think that I have perhaps not pushed enough over the last few months, and worry that this might harm my case. All the statements from the owner about needing more time have been verbal.

I just wondered if anybody could please advise on the best way to proceed. Should I take legal advice at this stage, and are there any other steps that I should be taking?

Any help would be greatly appreciated.

[cojak]

Dunning and debt recovery.

http://forums.contractoruk.com/accou...id-heyalp.html

http://forums.contractoruk.com/accou...d-opt-out.html

http://forums.contractoruk.com/busin...ltrincham.html

http://www.businesslink.gov.uk/bdotg...cId=1074453392

http://www.businesslink.gov.uk/bdotg...cId=1073924370

The guy thinks you're a sucker and is laughing at you as we speak.
he sent you a contract and you signed it and accepted it - that's how contracts work.

Get professional help from someone like Thomas Higgins. Let them work out the 'complications'.

[SodaPop]

Get professional help from someone like Thomas Higgins. Let them work out the 'complications'.

Thanks for this cojak and thanks for all the links, which I will read through.

In terms of firms such as Thomas Higgins, do you think that it would be too early to talk to them now?

[DaveB]

Thanks for this cojak and thanks for all the links, which I will read through.

In terms of firms such as Thomas Higgins, do you think that it would be too early to talk to them now?

No, don't piss about, get after them. The longer you leave it the harder it will get. £40k is not peanuts.

Take advice and start action now. A Letter Before Action costs little to nothing to send out and will get the process started.

[Clippy]

Thanks for this cojak and thanks for all the links, which I will read through.

In terms of firms such as Thomas Higgins, do you think that it would be too early to talk to them now?

I think you have pussy-footed for long enough.

Start taking some decisive action now to recover your money.

Oh, and if you do engage a professional to recover your money and the owner of the company that owes you money subsequently contacts you, refer him on to the professional you have hired - do not engage him in conversation - the time for him to deal with you directly has long gone.

Good luck and let us know how you get on.

[TykeMerc]

I think you have pussy-footed for long enough.

Start taking some decisive action now.

Absolutely. £40k isn't chicken feed.

I'm afraid this is one of those times when hobnail boots not silk slippers are required.

You essentially have 2 options:-

Pursue it actively, directly and positively, don't shy away from any legal means to secure payment - 10-50% chance of getting paid, 75% if the company is serious about surviving in the UK.
Wait and carry on listening to their excuses - 0% chance of being paid, they will string you along indefinitely hoping you give up and leave them alone.

[Old Greg]

Absolutely. £40k isn't chicken feed.

I'm afraid this is one of those times when hobnail boots not silk slippers are required.

You essentially have 2 options:-

Pursue it actively, directly and positively, don't shy away from any legal means to secure payment - 10-50% chance of getting paid, 75% if the company is serious about surviving in the UK.
Wait and carry on listening to their excuses - 0% chance of being paid, they will string you along indefinitely hoping you give up and leave them alone.

WTS - just imagine you need that 40k to stop your house being repossessed or something similar. Should motivate you and if it's not true now, who knows what the future holds. And let us know how it goes.

[SodaPop]

Thanks for all of the support and advice.

I think that I am going to send the invoices out again along with an email asking when they are going to be paid. Depending upon that response (which I don't expect to be positive) I will go forward with the legal action.

Because I did the work (and also originally issued the invoices) last year, do I still keep the VAT at last year's rate or do I need to increase it to 20% because the invoices haven't been paid yet?

Thanks again.

[TykeMerc]

It's time to take the gloves off and put on the spiky knuckle dusters. Sending copy invoices and a polite enquiry when you can expect payment is just a recipe for you having to wait for no useful response I'm afraid.

You're chasing payment of an old debt so the VAT rate you should use is the one relevant when the invoices were raised, if you do send new copies, mark them clearly as file copies.

In your situation I'd send copies together with a demand for immediate payment, notice that interest will be charged from the day each invoice went overdue and a Letter before action. £40k is too much for the small claims court unless there are many smaller invoices and you action each of them. I'd be looking at issuing winding up orders.

[Old Greg]

Thanks for all of the support and advice.

I think that I am going to send the invoices out again along with an email asking when they are going to be paid. Depending upon that response (which I don't expect to be positive) I will go forward with the legal action.

Because I did the work (and also originally issued the invoices) last year, do I still keep the VAT at last year's rate or do I need to increase it to 20% because the invoices haven't been paid yet?

Thanks again.

It's easy for me to say, but... you've already done this. 'If you always do what you've always done, you'll always get what you've always got.' Or whatever.

If you are going to re-send the invoices, perhaps do so with a Letter before Action: How do I use the County Court to recover money owed? :: Contractor UK or just get the debt collectors in.