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Can I charge a late fee on an invoice in the UK?

Updated 16 October 2026 · Sources: GOV.UK, legislation.gov.uk

Yes, for business-to-business invoices you can charge for late payment, even if you never agreed a late fee. The safest way is to use your statutory rights under the Late Payment of Commercial Debts (Interest) Act 1998 rather than inventing a flat fee. This is general information, not legal advice.

What the law already gives you

• Interest at 8% a year above the Bank of England reference rate, calculated daily from the due date.
• Fixed compensation per invoice: £40 for debts under £1,000, £70 for £1,000 to £9,999.99 and £100 for £10,000 or more. See GOV.UK: claim debt recovery costs.
• Reasonable extra recovery costs where the fixed sum doesn't cover them.

What about a flat "late fee"?

You can agree a contractual late fee in your terms, but it must be a genuine remedy agreed before the work, not a penalty added afterwards. A one-off "£50 admin fee" you add to an overdue invoice without having agreed it in advance is unlikely to be enforceable. Statutory interest and compensation don't need any clause.

Consumers are different

These rights apply to B2B debts only. For private individuals you can only charge what your contract allows, and consumer protection rules apply.

Put it on your invoices

Adding a line such as "We reserve the right to claim interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998" sets expectations and tends to speed up payment.