BadCop › Late fees by jurisdiction › The uk

Late payment interest and fees on invoices in the UK

For business-to-business and public-sector invoices, the Late Payment of Commercial Debts (Interest) Act 1998 gives you a statutory right to interest at 8% above the Bank of England base rate, plus a fixed compensation sum per invoice, even if your contract says nothing about late fees.

The rules

• Statutory interest: 8 percentage points above the Bank of England base rate. The base rate used is the one in force on 30 June or 31 December before the invoice became overdue, so the rate is fixed for six months at a time.
• Fixed compensation per late invoice: £40 for debts under £1,000, £70 for £1,000 to £9,999.99, £100 for £10,000 or more. Since 2013 you can also claim reasonable recovery costs above the fixed sum.
• It applies to B2B and business-to-public-sector contracts, not to consumers.
• If your contract sets its own late-payment terms they replace the statutory ones, but only if they give a substantial remedy; a token rate can be struck out.
• Interest runs from the day after the due date. With no agreed due date, the statutory default is 30 days after the invoice or delivery, whichever is later.

Configuring it in BadCop

Set late_fee_pct to the annualised statutory rate divided by 12 (for example base rate 4% + 8% = 12% a year, so 1.0 per month), and put the fixed compensation in late_fee_flat (40, 70 or 100 depending on your typical invoice size). Say "statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998" in the final-notice template.

Work the numbers with the late-fee calculator, and see the final-notice template that applies the fee.

Sources

• Late Payment of Commercial Debts (Interest) Act 1998: the rate of statutory interest (Penningtons)
• Late payment fees UK: how much you can legally charge (Paidnice)
• Statutory interest on late payments in the UK (Sprintlaw)

General information, not legal advice. Verified against the sources above in September 2026; rates and rules change. If money is at stake, ask a lawyer or accountant in your jurisdiction.