# Chasing a business client's unpaid bill: 8% plus base rate and a £40, £70 or £100 fixed sum, worked on three invoices

> GOV.UK sets statutory interest at 8% plus the Bank of England base rate, with a fixed sum of £40, £70 or £100 by debt size. Here it is worked on three invoices.

- Page to cite: https://aeolookup.com/solicitors/late-payment-business-client-bill-8-percent-plus-base-rate-fixed-sum-40-70-100-worked/
- Publisher: AEO Lookup (https://aeolookup.com/)
- Section: Solicitors, Running the firm
- Published 20 October 2026
- Key fact: At an assumed total rate of 12% (8% plus an assumed 4% base rate), 45 days late adds £11.84 of interest to an £800 invoice, £59.18 to a £4,000 invoice and £177.53 to a £12,000 invoice. With the fixed sums of £40, £70 and £100 the extras come to £51.84, £129.18 and £277.53, so on the £800 invoice the fixed sum is 3.4 times the interest (£40 / £11.84 = 3.38).
- Sources: GOV.UK, "Late commercial payments: interest and debt recovery", pages "Charging interest on late commercial payments" (8% plus the Bank of England base rate; no interest where a contract sets a different rate; send a new invoice to add interest) and "Claiming debt recovery costs" (fixed sums: up to £999.99 £40, £1,000 to £9,999.99 £70, £10,000 or more £100; once per payment; reasonable recovery costs for a supplier). Read 20 October 2026.

A business client is six weeks late with a bill and the partner asks: "can we add anything for that?" The answer is usually yes, but only for business-to-business bills, and the amounts are small enough that it helps to know them before you decide how much effort the chase deserves.

## What GOV.UK says

The two GOV.UK pages I read say:

- Statutory interest is **8% plus the Bank of England base rate** for business-to-business transactions.
- You cannot claim statutory interest if a contract sets a different interest rate.
- On top of interest you can charge a **fixed sum** by the size of the debt: **£40** up to £999.99, **£70** from £1,000 to £9,999.99, and **£100** at £10,000 or more.
- You can only charge the business once for each payment.
- A supplier can also claim reasonable costs each time it tries to recover the debt.
- To add interest, send a new invoice.

The interest page links to the Bank of England for the current and previous base rates and does not say which date's rate applies to a given debt. It quotes no current base rate, so the figure below is an assumption, not today's rate.

## The sums

I have assumed a base rate of 4.00%, so a total rate of 8% + 4% = 12% a year. Please replace it with the rate that applies to your debt. Daily interest is the invoice × 12% / 365, and each invoice here is 45 days late.

| Invoice | Interest a year | Daily interest | 45 days | Fixed sum | Total extra |
|---|---|---|---|---|---|
| £800 | £96.00 | £0.263 | **£11.84** | £40 | **£51.84** |
| £4,000 | £480.00 | £1.315 | **£59.18** | £70 | **£129.18** |
| £12,000 | £1,440.00 | £3.945 | **£177.53** | £100 | **£277.53** |

On the £800 invoice the fixed sum (£40) is 3.4 times the interest (£11.84), so for small bills the fixed sum is the bigger part of the extra. On the £12,000 invoice the interest is the larger part. The extra is £51.84 / £800 = 6.5% of the small bill and £277.53 / £12,000 = 2.3% of the large one.

## Putting it into practice

- **Check your terms first.** If your engagement letter or terms of business set their own late payment rate, the GOV.UK page says statutory interest cannot be claimed on top. See [what a client care letter should cover for a new matter](https://aeolookup.com/solicitors/client-care-letter-checklist-new-matter/).
- **Send a new invoice for the extra,** as the page says, and show the days, the rate and the fixed sum on it so the client can check the sum.
- **Do not mix it up with client money.** Interest on the client's own money is a different question; see [interest on client money and the fair sum](https://aeolookup.com/solicitors/interest-on-client-money-fair-sum-sra-accounts-rule-7-worked-examples/).
- **Weigh the time.** A firm that spends an hour on a £51.84 extra has not gained much. The [admin scorecard for a small firm](https://aeolookup.com/solicitors/admin-scorecard-small-law-firm-hours-ai/) is a way to see where those hours go.

## What I did not read

I did not read the Late Payment of Commercial Debts (Interest) Act 1998 or its regulations on legislation.gov.uk (the pages I tried returned only headings or one unrelated section), so I cannot state the rule for which base rate date applies or how it applies to a solicitor's bill to a particular kind of client. I did not read the Bank of England rate page, so 4.00% is only an assumption. I did not check the Legal Ombudsman or SRA position on charging interest to clients. Read the current pages before you send a chaser.

Overlyft ![](https://aeolookup.com/img/d/ours-badge.png) builds AI staff who join your firm's team, check each overdue business invoice against your terms, work out the interest and fixed sum and draft the chasing letter, with a person approving it before it is sent.

This is general information, not legal advice. Check the current GOV.UK pages, your own terms and your regulatory obligations for each client.

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General information for UK small firms, not legal, tax or financial advice.