Can I charge interest on a late invoice?
The short answer
Yes. If you sold to another business and they paid late, the law lets you add interest at 8% a year above the Bank of England base rate2. You can also add a fixed sum of £40, £70 or £1003 for each late invoice, depending on its size. You don't need a clause in your contract for the interest6 or the fixed sum8.
England and Wales only. WolfX is software, not a law firm.
The numbers
What the law lets you add.
What you can add
A £4,800 invoice, two months late
Say you invoiced another business £4,800, due on 31 August 2026. On 31 October it's still unpaid: 61 days late.
Then it grows by £1.55 a day until they pay.
The road ahead
Five steps. All free.
Step 3: Send it in writing
Email the letter below, with a new invoice2 for the extra. Keep a copy.
Step 4: Give them 14 days to pay
It's the time the rules give a company10 to reply to a formal letter, so every step stays in line.
Step 5: Still unpaid? Send a letter before action
It's the last letter before a court claim. A sole trader must get 30 days to reply11.
A letter you can copy
Letter adding interest and compensation
Send it once the payment date has passed and a friendly reminder hasn't worked.
Tap a highlighted gap to see what goes in it.
Send it by email so it is dated, and keep a copy with the invoice.
When not to bother
When it isn't worth it
- They're a consumer, not a business. The law only covers sales between businesses7.
- Your contract sets its own late fee. If it's a fair one, it applies instead9.
- It's a day or two late and you want to keep the client. The interest will be pennies, and the fixed sum8 stays yours to claim later. A friendly reminder usually does more.
- It fell due over six years ago. Most debt claims run out after six years12.
The Wolf's note
You did the work. The law already set the price of paying late. Ask once, in writing, with the sum worked out to the penny. Then the next move is theirs.
Mr. Wolf · the AI inside WolfX
What comes next
Your next move
How do I work out late payment interest to the day?
Multiply the invoice by the yearly rate, divide by 365, then multiply by the days late.
6 min read · Letter included
What is late payment compensation, and is it £40, £70 or £100?
All three. If you sold to a business, the law adds a fixed £40, £70 or £100 to each late invoice, by its size, on top of interest, with no costs to prove.
5 min read · Letter included
Can I claim interest on invoices my client already paid late?
Usually. Being paid does not end the right to interest and a fixed sum of £40, £70 or £100 per invoice, and you can claim up to six years back.
6 min read · Letter included
Don't want to do this yourself?
The Wolf does every step for you. He works out the sums, writes the letters and keeps track of every date. Nothing goes without your yes.