AnswersTopic
Interest and late fees
What the law lets you add when a business pays late, and how to work it out to the penny.
16 answers
- Can I charge interest on a late invoice?Yes.
- How do I work out late payment interest to the day?Three numbers.
- What is late payment compensation, and is it £40, £70 or £100?All three.
- Can I charge my own late fee on an invoice?Yes, if agreed first.
- What late payment wording should go on my invoice?Two lines.
- Can I claim interest on invoices my client already paid late?Usually.
- Does the late payment law cover my business and my customer?Yes.
- Can I charge for the cost of chasing a debt on top of the fixed sum?Yes.
- Can I charge interest to a council, the NHS or another public body?Yes.
- Should I charge interest at all, or does it backfire?Yes, for a habit.
- My client refuses to pay the interest. What then?Still owed.
- How do I invoice for the interest and compensation?A new invoice.
- Do I add VAT to late payment interest and compensation?No.
- Can I charge compound interest, or interest on the interest?No.
- Does interest run on a disputed invoice?Yes, on what's owed.
- Can I waive the interest now and still claim it later?Yes, if reserved.
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