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Statutory Interest Payable

Statutory Interest applied to each Late Invoice.
Claiming Statutory

Claim Statutory Late Fees on Late Paid Invoices

Your business has a statutory right to claim interest on commercial late invoice payments which is 8% above the Bank of England Base Rate of Interest. Alternatively you are completely free to increase the statutory 8% rate if you have specified it in your terms and conditions. Invoice Claims can help you set the rate of Interest within your terms and conditions.

6 Year

Rates Of

Daily Interest

6 Year Window

You Can Claim On Invoices Dating Back 6 Years

Interest can be charged on every late commercial invoice payment you receive dating back up to 6 years of initial payment. Therefore, if you have invoices which have been paid but were paid late then you can claim statutory interest so long as the invoice was initially dated within the last 6 years

Interest 6%

Interest 9%

Interest 8%

Rates of Interest

Not All Late Invoices Have The Same Interest Rate

However if you have agreed a different rate of interest and is stated in a contract then you may have to adhere to those terms unless the agreement is deemed unfair and puts your business at a significant disadvantage. The debtor for instance cannot completely contract out late payment legislation to avoid paying fees on late paid invoices. Therefore any company which has done this could be liable to pay Late fees in full dating back 6 years.
Daily Interest Accrual

Each Day Past The Due Date Will Add More Interest

Invoices which are still outstanding and overdue accrue daily interest (see invoice calculator). Rates for calculating interest are called reference rates and are fixed for six-month periods.
Invoice Overdue!

0 Days Overdue!


Interest (8%)Total

There Are Two Reference Dates Per Year

The first is on 31st December which runs from January 1st until 30th June.
The second is on 30th June and runs from 1st July until 31st December.

For example if an invoice became late between January 1st and 30th June and the Bank of England interest rate was 1% on the 31st December then it would simply be a matter of adding 8% and 1% = 9% during these months.

If however the Bank of England Base rate increased from 1% to 2% on 1st July or anytime during the first half of the year then you simply add 8% and 2% = 10% on any invoices falling due after 1st July and use this until the following 31st December.

If the Bank of England Base Rate of Interest changed again during the second half of the year then this would be altered again on the 31st December and would be used on any invoices falling due from 1st January until the following 30th June.

1st Jan
30th Jun
1st Jul
31st Dec
Bank Of England

Interest Rate

0 %

Creating & Sending

How Should You Send A Late Invoice Fee?

Interest should be charged on the outstanding gross amount inclusive of VAT however you should not charge VAT on Interest and Compensation arising from Late fees.
Invoice Claims

Free Invoice Building & Billing Software

Use Invoice Claims
Invoice Claims & Interest Rates

How Can Invoice Claims Help With Interest Rates?

Invoice Claims can assist your business by mediating between your accounts team and business customers by clearly explaining legislation and provide plenty of opportunity and time for businesses to understand their responsibilities as a customer.
Size of Interest

Is Statutory Interest A Set Fee?

Despite 8% being the statutory Interest amount there is no set requirement to charge this amount and therefore you can charge more or less than 8% (+ Bank of England Interest) however this must be declared within your payment terms and conditions on your original invoice.

If you do not state this on your original invoice then you cannot retrospectively add a random figure afterwards although you may be to still claim statutory fees even if it was not stated on the original invoice.

We Recommend

Can I Charge Whatever I Want Then?

We do not recommend charging more than 10% Interest plus Bank of England Interest as charging anything higher could be viewed as unreasonable and unfair towards the business customer and annul any late fees potentially owed if it cannot be justified. It should also be clearly stated on the original invoice and on every reminder so business customer(s) have several clear opportunities to recognise and understand your payment terms.
Future Business Relationships

Worried That Charging Late Fees Could Harm Future Business?

Do always keep in mind that whilst its your right to charge Late fees and Interest your relationship with your business customer should always come first. Implementing late fees arbitrarily, especially higher than what is statutory could cause harm to potential future business meaning any monies generated from late fees could end up being less than revenue otherwise missed form future repeat business.
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