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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
Window
Rates Of
Interest
Daily Interest
Accrual
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!
0
Day(s)
| Interest (8%) | Total |
|---|---|
| £0 | £50 |
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 & 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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We help businesses retrieve late fees arising from overdue and unpaid B2B invoices and implement effective credit control measures to get you paid on time.
We help businesses retrieve late fees arising from overdue and unpaid B2B invoices and implement effective credit control measures to get you paid on time.
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