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Can I charge for the cost of chasing a debt on top of the fixed sum?

The short answer

Yes. The law gives you £40, £70 or £100 as a fixed sum1 once interest starts to run, and if your reasonable costs of recovering the debt come to more, you can also claim the difference2. With a £70 fixed sum and £260 of costs, you add £190, so you claim £260 in all for costs, not £330.

Mara, WolfX research desk
Written with AI, checked by a person · 8 October 2026

England and Wales only. WolfX is software, not a law firm.

The numbers

The numbers behind it.

£40–£100Fixed sum for each late invoice, due once interest starts to run.1 2

11.75%Yearly interest on an invoice that went late between 1 July and 31 December 2026.7 8

£10,000The small claims limit, where the court may not order most of the winner's costs.10 11

What you can add

A £6,400 invoice and a £260 letter

Say you invoiced another business £6,400, due on 15 July 2026. On 15 September it's still unpaid: 62 days late. In between, a solicitor wrote to them about it. The letter cost you £260, and you kept the receipt. Interest started on 16 July, so the rate for 1 July to 31 December 2026 applies.

The invoice£6,400.00
Interest: £6,400 × 11.75% ÷ 365 × 62 days7£127.74
Fixed sum (invoices from £1,000 to £9,999.99)1£70.00
Costs the fixed sum doesn't meet: £260 less £702£190.00
Owed on 15 September 2026£6,787.74

Adding the full £260 on top of the £70 would make £6,857.74, which is £70 too much. Then interest grows by £2.06 a day until they pay.

The road ahead

Five steps. All free.

Step 1: Check it counts
It must be a sale between businesses3 that is already late, because the fixed sum is due once interest starts to run. The top-up also needs a contract made on or after 16 March 20136; an older contract doesn't get it.
Cost: FreeTime: 2 minutes
Step 2: Add up what you really spent
List each cost of recovering this debt with its date, amount and receipt: a solicitor's letter to the customer, say. Money spent arguing about the work doesn't belong on the list.
The Act doesn't define "reasonable", so a court decides, and a cost should fit the size of the debt. It says nothing about your own time, so don't build the claim on it.
Cost: FreeTime: 15 minutes
Step 3: Claim only the difference
Take the fixed sum off your total costs. £260 less £70 is £190, and the £190 is the extra. GOV.UK1 says you can claim reasonable costs "each time you try to recover the debt". The Act's words are the difference2, so work to those.
If your costs are no more than the fixed sum, there is no extra.
Cost: FreeTime: 5 minutes
Step 4: Put it on one invoice
Send one new invoice with the interest, the fixed sum and the extra as three lines, and the receipts attached. The fixed sum is charged once for each payment1. How to set it out.
Cost: FreeTime: Same day
Step 5: Give them 14 days to pay
Set the pay-by date 14 days out, the usual time the court rules9 allow for a reply in a straightforward case. If it passes, the next step is a letter before action. A sole trader gets longer; the letter page says how much.
If a letter before action has already gone and its date has passed, set no new pay-by date. Send these sums with a short note naming the day the claim starts, or start it.
Cost: FreeTime: 14 days

A letter you can copy

Costs statement to send with the interest invoice

Send it with the new invoice for interest and the fixed sum, once you hold the receipt. Not after a letter before action has run out: then the sums go in the claim.

New email

SubjectInvoice : recovery costs, interest and fixed sum

Dear , Invoice , for , was due on . It has not been paid. Under section 5A of the Late Payment of Commercial Debts (Interest) Act 1998, I am entitled to a fixed sum of and to the reasonable costs of recovering this debt that the fixed sum does not meet. The costs I paid, with receipts attached: : Total costs: Less the fixed sum: Costs claimed on top: A new invoice is attached for interest of to date, the fixed sum and the costs above. Interest keeps running until you pay. With the original invoice, the total due today is . Please pay the full amount by to: If you believe any of this is wrong, please tell me before that date and say why. Kind regards,

Tap a highlighted gap to see what goes in it.

Send it by email with the receipts and the new invoice attached, so it is dated. Keep a copy of the lot. If the pay-by date passes, the next step is a letter before action, not a second reminder.

When not to bother

When it isn't worth it

You've spent nothing, or less than the fixed sum. Then the fixed sum is your whole claim and there is no extra to add.
A flat admin fee you set yourself isn't a cost you paid. A late fee agreed beforehand is a different route; it replaces interest4 only if it is a substantial remedy5.
The cost is out of proportion to the invoice. A £260 letter on a £400 invoice invites the answer that it wasn't reasonable. Claim the fixed sum, and weigh whether the client is worth the argument.
The customer is a consumer. The Act covers sales between businesses3 only.
You expect a small claim. There the court may not order most of a winner's costs11, though court fees you paid are recoverable. The Act doesn't say how a court treats the top-up, so don't count on it.

The Wolf's note

The fixed sum is yours once interest starts, with no receipt. Anything above it has to be money you really spent and a court would call reasonable. Keep the receipt, subtract once, and let the invoice do the arguing.

Mr. Wolf · the AI inside WolfX

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