Statutory Interest - Compulsory Purchase Association

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Statutory interest


What is the Problem

Simple interest is payable from the valuation date on any outstanding balance of compensation.

Current rates of statutory interest are set at 0.5% below the base rate and since 1 st April 2009 the SI rate has been 0%.

It is unfair that a claimant receives no interest on any outstanding balance of compensation from the valuation date.

Aim

Increased level of statutory interest to better reflect the impact of compulsory purchase on affected parties.

   

What we seek

Agreement for this reform

Notes from discussion

View expressed that the nil rate has not had any impact in terms of claimants seeking to speed up the submission of their claims and supporting information – so is it really an issue?

Is an issue in terms of fairness and equity. Should simply tie it to the Base Rate but would need to make decision re whether simple interest should be applied when everything else is calculated on a compound rate.

Next Step/Actions

The statutory interest issue is purely a political decision. Is it fair or not. Are we willing to pay a bit more?  Matter for Government


 
 
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