Can I charge late-payment interest to clients who pay invoices late, and how do I do it?

Yes, you absolutely can — this right comes from the Late Payment of Commercial Debts (Interest) Act 1998, and it applies to business-to-business transactions regardless of your company's size. Statutory interest runs at 8% over the Bank of England base rate, calculated daily on the overdue amount from the agreed payment date — or 30 days after the invoice if no date was set. On top of the interest you can also claim fixed compensation of £40, £70 or £100 per invoice depending on the size of the debt, which is an implied term in your contracts unless they include an alternative substantial remedy. In practical terms, put your payment terms and a late-payment clause on your invoices and engagement letters, and send a firm but polite reminder before adding the charge — most clients pay up at the reminder stage once they see you mean it. One bookkeeping note: interest and compensation you recover are taxable income, so record them in the company accounts when received.