Under the Late Payment Act you are entitled to seek: 8% per annum above the Bank of England base rate; and. Interest can be applied daily from the date the invoice became due until the date payment is received.
The interest you can charge if another business is late paying for goods or a service is 'statutory interest' - this is 8% plus the Bank of England base rate for business to business transactions. You cannot claim statutory interest if there's a different rate of interest in a contract.
Late fees usually range from 1% to 2% monthly interest rate, so staying near that range is the most reasonable approach. Of course, some industries work very differently and may have higher monthly rates, so always be sure to research when deciding how you'll charge late payment fees.
A late payment fee is an extra charge a customer needs to pay when they don't pay a bill by the due date. It's typically 1% to 2% of the past-due invoice amount.
When a payment becomes late. You can claim interest and debt recovery costs if another business is late paying for goods or a service. If you agree a payment date, it must usually be within 30 days for public authorities or 60 days for business transactions.
What is the maximum you can charge for late fees in the UK?
How much are late payment charges?
A late fee, also known as an overdue fine, late fine, or past due fee, is a charge fined against a client by a company or organization for not paying a bill or returning a rented or borrowed item by its due date. Its use is most commonly associated with businesses like creditors, video rental outlets and libraries.
The Fair Repayment Rate has lowered the maximum amount someone can repay through deductions to 15% of the standard allowance, from 25%*. In February 2025, 30% of all households with deductions had deductions at the 25% cap.
The fee shouldn't exceed a certain percentage of your rent.
That's $50 on a $1,000 per month rental. A few states set lower limits. Even in the majority of states with no statutory limits, a higher late charge, such as 10%, might not be upheld in court, unless the rent was extremely late—at least 10 days.
If you've been charged a late payment fee, you don't necessarily need to pay it without a fight. You can always reach out to the company that assessed the charge and ask for a waiver.
To calculate the interest due on a late payment, the amount of the debt should be multiplied by the number of days for which the payment is late, multiplied by daily late payment interest rate in operation on the date the payment became overdue.
The LendingTree survey found 86% of people who negotiate late fees are successful, with 62% getting the fee waived altogether. “It can really be as simple as just asking.
I am following up regarding Invoice #[invoice number], which remains past due. The payment was due on [due date] and is now overdue by [number] days. Please note that late fees may be applied to your total if we do not receive payment by [date]. We have re-attached the invoice to this email.
You can set your own late payment fees as long as they are within your legal rights. You want to charge enough so that the customer will act, but not too much that it makes your business seem greedy, or is over the legal amount you can charge.
GSTR 9C late fees is ₹200 per day for each day of delay, subject to a maximum of 0.5% of your turnover. Every taxable person whose registration has been canceled or surrendered should file under this form. Rs. 200 a day (SGST- Rs.
To charge a late payment fee, you must include payment expectations within your original contract or sales agreement and state the due date and the late fee percentage or amount in the invoice.
It's important to note that although it's legal to charge late fees on overdue invoices in the UK, it can only be enforced if certain criteria are met. Important: Your clients are only obligated to pay the applicable late fee if they've agreed to your payment terms in advance.
If you dispute the incorrect late payment with your creditor, they typically have 30 days to investigate. If the creditor stands by the reported late payment, it won't remove or update the information. But if it agrees that the information is incorrect, the creditor has to tell the credit bureau to update or remove it.
Contact customer service and explain that the missed payment was accidental. Request a fee waiver. Politely ask if they can remove the late fee, particularly if you have a history of on-time payments. Ask about penalty APR removal.
While there is yet to be a universal answer regarding an appropriate rate, in most cases and across most industries, a late fee rate between 1% and 2% is often considered the standard.
The CFPB estimates that the income generated by the largest issuers from late fees is approximately five times greater than the collection costs that the companies incur for late payments. As a result, credit card late fees average $30 for the first offense and $41 for subsequent ones.
What is the interest rate for late payments in the UK?
The current late payment and repayment interest rates applied to the main taxes and duties that HMRC currently charges and pays interest on are: late payment interest rate — 8.00% from 27 August 2025. repayment interest rate — 3.00% from 27 August 2025.
The Department for Work and Pensions (DWP) is set to give a £780 boost to people on benefits, with the extra money appearing in accounts from this week. This year has been tough for everyone, whether you're on benefits or not, due to rising bills, inflation and the ongoing cost of living crisis.
What is the current compulsory repayment threshold?
A compulsory repayment must be made when you earn more than the compulsory repayment threshold. In the 2025-26 income year the threshold is $67,000. Your annual compulsory repayment amount is worked out by the ATO when you lodge your tax return.
