---
type: Guide
title: How much can I charge in late fees?
description: How much you can charge in late fees in the UK in 2026: the 11.75% statutory interest rate, the £40/£70/£100 fixed sums, one invoice calculated, and a ready-reckoner table.
resource: https://accounting.events/resources/how-much-can-i-charge-late-fees/
tags: [how much can i charge for late fees, late payment fee amount, late payment interest uk, statutory interest amount]
timestamp: 2026-10-19
---

Summary

- You can charge statutory interest of 8% plus the Bank of England base rate, which is 11.75% a year with the base rate at 3.75%, from the first day the invoice is late.
- On top of the interest you can add a fixed compensation sum of £40, £70 or £100, plus your reasonable recovery costs.
- To automate it, Paidnice applies the fee or interest per customer group and posts it to the Xero or QuickBooks ledger.

On an overdue business-to-business invoice in the UK, you can charge statutory interest at 11.75% a year, plus a fixed compensation sum of £40, £70 or £100, plus your reasonable recovery costs on top. This guide turns those rules into actual numbers: one invoice calculated, and a ready reckoner showing exactly what you are owed at common invoice sizes.

**Related guides:** [the full UK late payment fees guide](/resources/late-payment-fees-uk/), [how to add late payment fees in Xero](/resources/late-payment-fees-xero/), [the best credit control software UK](/reviews/best-credit-control-software-uk/)

## The short answer

You can charge **statutory interest of 8% plus the Bank of England base rate**, which is **11.75% a year** with the base rate at 3.75% since 18 December 2025, on the overdue amount, running from the first day it is late.

On top of that you can add a one-off fixed fee: **£40** for debts under £1,000, **£70** for £1,000 to £9,999.99, and **£100** for £10,000 or more. If your costs of recovering the debt are higher than the fixed fee, you can claim those instead.

## The interest rate today

Overdue amount (£5,000) x Statutory rate (8% + base) x Days late / 365 (45 / 365) = Interest (£72.43)

Statutory interest on one £5,000 invoice, 45 days late. A fixed sum of £40 to £100 is added on top. The rate moves with the base rate.

The statutory rate is 8% a year on top of the Bank of England base rate. With the base rate at 3.75% since 18 December 2025, that gives **11.75% a year**. Day to day, that works out at roughly 3.2 pence per day for every £100 outstanding, or £117.50 a year on every £1,000.

It is simple interest, not compound, so it does not snowball. You calculate it as the overdue amount, times 11.75%, times the number of days late divided by 365.

## The fixed compensation by debt size

- **£40** (Debts up to £999.99): Plus interest at 8% over base
- **£70** (£1,000 to £9,999.99): Plus interest, plus recovery costs
- **£100** (£10,000 and above): Plus interest, plus recovery costs

The fixed compensation sum is set by the size of each overdue invoice. It is the minimum you can claim.

| Size of the overdue debt | Fixed compensation |
| --- | --- |
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 and above | £100 |

## £5,000 invoice, 45 days late

Take a £5,000 invoice paid 45 days late, with the base rate at 3.75%, so the rate is 11.75%.

- Interest: £5,000 × 11.75% × (45 ÷ 365) = **£72.43**
- Fixed compensation (debt in the £1,000 to £9,999.99 band): **£70.00**
- Total you can add to the £5,000: **£142.43**, making £5,142.43 due

If chasing that debt cost you more than £70, say a £180 debt-collection agency fee, you could claim the £180 in place of the £70 fixed sum instead.

## What you can charge at a glance

Total you can claim on a 30-day-late invoice

- £1,000: ~£50
- £5,000: ~£118
- £10,000: ~£197
- £25,000: ~£341

Interest for 30 days at the current 11.75% rate plus the fixed sum. The interest portion moves with the base rate, so [confirm the live rate](https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt) before you bill.

Interest at the current 11.75% rate for common invoice sizes and delays, plus the fixed sum that applies. Use it as a quick check; for an exact figure across a changing base rate, use a calculator.

| Invoice amount | 30 days late | 60 days late | 90 days late | Fixed sum |
| --- | --- | --- | --- | --- |
| £500 | £4.83 | £9.66 | £14.49 | £40 |
| £1,000 | £9.66 | £19.32 | £28.97 | £70 |
| £5,000 | £48.29 | £96.58 | £144.86 | £70 |
| £10,000 | £96.58 | £193.15 | £289.73 | £100 |
| £25,000 | £241.44 | £482.88 | £724.32 | £100 |

## Claiming your recovery costs on top

The fixed sum is the minimum you can claim. The 2013 Regulations let you claim the reasonable costs of recovering the debt where they exceed the fixed sum: think solicitor letters, debt-collection agency fees, or court costs.

You claim the higher of the two, not both, and you should be able to evidence the cost. For most small overdue invoices the fixed sum is the practical figure; for larger or harder cases, the recovery-cost route is the one that matters.

## Can you charge more than the statutory rate

You can set a higher rate in your contract, but only if it offers a substantial remedy that genuinely compensates for or deters late payment and is fair to impose. A modest contractual rate does not override the statutory one, so in practice the statutory 11.75% is the figure most businesses fall back on.

Charging a consumer is different: the statutory right covers business-to-business invoices only, and consumer late-payment terms are governed by the Consumer Rights Act 2015 and must not be an unfair penalty.

## Frequently asked questions

### How much can I charge for a late invoice in the UK?

Statutory interest of 8% plus the Bank of England base rate, which is 11.75% a year, on the overdue amount, plus a fixed fee of £40, £70 or £100 by debt size. For example, a £5,000 invoice paid 45 days late earns about £72 in interest plus £70, so £142 in total.

### Is the late payment fee per invoice or per day?

The interest accrues per day, at 11.75% a year on the outstanding amount. The fixed compensation sum is charged once per overdue invoice, not per day or per reminder.

### Can I charge a flat late fee instead of interest?

For B2B invoices, the statutory entitlement is interest plus the fixed sum, not an arbitrary flat fee. You can set a different rate in your contract, but it only replaces the statutory right if it offers a substantial remedy. A made-up flat fee with no contractual basis can be challenged.

### Does VAT apply to a late payment fee?

No. Statutory interest and the fixed compensation sum are outside the scope of VAT, so you do not add VAT when you raise them, and they stay out of your VAT return.

### What if my recovery costs are more than the fixed fee?

You can claim the reasonable costs of recovery instead of the fixed sum where they are higher, for example a debt-collection agency fee. You claim the higher figure, not both, and you should keep evidence of the cost.

## The bottom line

At the 11.75% statutory rate, an overdue B2B invoice earns 11.75% a year in interest plus a fixed £40, £70 or £100, with your recovery costs claimable on top if they are higher.

The numbers are modest on a single small invoice but add up across a ledger, and applying them consistently does more to change a slow payer's habits than another polite reminder.


General information, not legal or financial advice. Interest figures use the 11.75% statutory rate (base rate 3.75%); the Bank of England base rate changes over time. This resource is published by Accounting.Events.