Can You Charge Interest on Late B2C Payments in the UK?

Late payments can cause serious cash flow issues for businesses. In the UK, many companies assume they can apply late payment interest in the same way for both businesses and consumer invoices.

However, the rules differ and it’s important to understand your legal position before charging consumers for overdue invoices.

The Legal Position on Late Payment Interest in the UK

Under the Late Payment of Commercial Debts (Interest) Act 1998, businesses can charge statutory interest (8% plus the Bank of England base rate) when another business pays late. Unfortunately, this legislation does not apply to consumer invoices.

For B2C late payment cases, you may still charge interest or late payment fees, but only where:

• Your terms and conditions are clear – The right to charge interest must be set out and agreed before the sale or service is provided.
• The rate is fair and reasonable – Under the Consumer Rights Act 2015, charges must not be excessive or considered unfair.
• Transparency is maintained – Consumers should always understand upfront what costs may apply if payment is overdue.

If these conditions are not met, you generally cannot add interest to a late consumer invoice after the fact.

Why Clear Consumer Terms Are Essential

Having clear, legally compliant payment terms for consumers protects your business and reduces the likelihood of disputes. Stating a reasonable policy on interest for late payment of invoices also encourages customers to pay on time and gives you stronger grounds for debt recovery if required.

Managing B2C Late Payments Effectively

Even with the right clauses in place, chasing overdue invoices from consumers can be challenging. Pursuing debts must be handled carefully to remain compliant with UK consumer law and to protect your brand reputation. Many businesses choose to work with a professional debt recovery agency to ensure they recover debts efficiently and fairly.

Protect Your Business with Professional Debt Recovery

At Controlaccount, we specialise in helping businesses across the UK recover overdue B2C and B2B debts. Our professional approach ensures compliance, protects your reputation, and maximises recovery rates.

Contact our sales team today to discuss tailored debt recovery solutions for your business.

Get in touch with Controlaccount