Only as interest, and only if the term is in the tenancy agreement. In England, the Tenant Fees Act lets you charge interest on rent that hasn't been paid in full by the end of the 14 days beginning with the due date, at no more than 3% above the Bank of England base rate (6.75% a year at today's 3.75% base rate), on the overdue amount only. Fixed late fees and admin charges for late rent aren't allowed.
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The short version
- In England the Tenant Fees Act allows interest on late rent and no other late fee, so fixed charges and admin fees for chasing aren't permitted.
- Interest can only be charged if the term was in the signed tenancy agreement and the rent wasn't paid in full by the end of the 14 days beginning with the due date.
- The rate is capped at 3% above the Bank of England base rate on the unpaid rent only, so £950 paid 20 days late comes to £3.51 at 6.75%.
- Wales has its own rules, interest and fees stop during a Breathing Space, and commercial tenants fall under the late payment rules for business debts.
- For residential tenants the fee is rarely worth the conversation, so put the effort into a reminder before the due date, a direct debit on the due date and a quick follow-up.
What the Tenant Fees Act lets you charge
The government's 2019 guidance for landlords singled out a £25 fixed charge for rent seven or more days late as not allowed, and any similar line left in an old template still can't be enforced. Asking for it can cost far more than it would ever bring in. The rules below apply to assured tenancies in England, and the Renters' Rights Act left the late rent provision unchanged.
You can charge interest on late rent, and nothing else, as a late payment fee. Flat fees, admin charges for reminder letters and charges for phone calls chasing arrears aren't permitted payments.
You can only charge it once the rent is at least two weeks overdue. The trigger is rent not paid in full by the end of the 14 days beginning with the due date.
You can only charge it if it was in the tenancy agreement before it was signed. You can't add a late rent clause partway through a tenancy and start charging.
The rate can't exceed 3% above the Bank of England base rate, charged on the unpaid rent only. With the base rate at 3.75%, the cap is 6.75% a year, and it moves whenever the base rate does.
Charging a fee that isn't permitted can bring a fine of up to £5,000 for a first breach, and a repeat within five years can mean prosecution or a penalty of up to £30,000.
How much a late rent fee comes to
Say £950 monthly rent arrives 20 days late. Once the 14 days have passed, the wording of the Act lets you count interest for each day after the due date that the rent was unpaid:
£950 × 6.75% ÷ 365 × 20 days = £3.51
On residential rent the fee is small, and it only works as a deterrent if you apply it the same way every time it's due. Before you charge it, check:
- The late rent clause is in the signed tenancy agreement, with the rate stated.
- The rent was still not paid in full at the end of the 14 days beginning with the due date.
- The rate you've used is no more than 3% above the base rate on the days it applied.
- You've charged only on the amount still unpaid, not on the whole month's rent if part was paid.
- The tenant isn't in a Breathing Space, where interest and fees on the arrears have to stop.
When different rules apply
Wales has its own rules. Under the Welsh fees legislation, nothing can be charged for the first seven days after the due date, and after that the cap is also 3% above the base rate on the unpaid rent.
Breathing Space changes what you can do in England and Wales. If a tenant enters the debt respite scheme, requests to pay the arrears, enforcement, and any new interest, fees or charges on them all have to stop. Ongoing rent is still due, so your normal reminders for the current month carry on. The standard version runs for up to 60 days; the mental health crisis version continues for the length of the crisis treatment and 30 days after.
Commercial tenants are different again. A business renting a shop, office or unit isn't covered by the Tenant Fees Act. Late rent from a business tenant falls under the late payment legislation for business debts, which allows interest at 8% above the base rate, 11.75% today, plus fixed compensation of £40, £70 or £100 per invoice depending on its size.
For business tenants, Adfin can apply that statutory interest and fixed compensation automatically from the due date, and the payment link the tenant already has updates as the interest builds. You can set a grace period and waive it for any account. Use it for business tenants only, since residential rent stays under the Tenant Fees Act cap above.
How to get rent in before a fee comes into it
For residential tenants the fee will rarely be worth the conversation, so put the effort into a reminder a few days before the due date, a direct debit that collects on the due date, and a quick follow-up when a payment doesn't arrive.
With Adfin, tenants get reminders by email, SMS or WhatsApp on the schedule you set, can pay from a link in a tap, and failed direct debits are retried for free. The AI Customer Agents work to the rules you give them, and one tenant can be taken out of chasing, for example when they enter a Breathing Space or tell you they're struggling.
Common questions
Can I charge a fixed £25 fee when rent is late? No. In England, the only permitted late rent charge is interest of no more than 3% above the Bank of England base rate, after 14 days, if it's in the tenancy agreement.
When can I start charging interest on late rent? Once the rent hasn't been paid in full by the end of the 14 days beginning with the due date. Interest can then be counted from the day after the due date.
What is the maximum late rent interest rate now? 6.75% a year, which is 3% above the current 3.75% base rate. It changes when the base rate changes.
Can I charge for sending arrears letters? No. Admin charges for chasing late rent aren't permitted payments under the Tenant Fees Act.
Can I add interest to arrears during a Breathing Space? No. The arrears it covers are frozen against new interest, fees and charges while it runs, though ongoing rent is still due.
Can I charge late payment interest to a commercial tenant? Yes. Business tenants fall under the late payment rules for business debts, which allow interest at 8% above the base rate plus fixed compensation per invoice.
Sources
- legislation.gov.uk - Tenant Fees Act 2019, Schedule 1 (accurate as of October 2026) https://www.legislation.gov.uk/ukpga/2019/4/schedule/1
- GOV.UK - Fees you can charge as part of a tenancy (accurate as of October 2026) https://www.gov.uk/guidance/fees-you-can-charge-as-part-of-a-tenancy
- Bank of England - Interest rates and Bank Rate (accurate as of October 2026) https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate
- Rent Smart Wales - The Renting Homes (Fees etc.) (Prescribed Limits of Default Payments) (Wales) Regulations 2020 (accurate as of October 2026) https://rentsmart.gov.wales/en/news/69/the-renting-homes-(fees-etc-)-(prescribed-limits-of-default-payments)-(wales)-regulations-2020/
- GOV.UK - Debt Respite Scheme (Breathing Space) guidance for creditors (accurate as of October 2026) https://www.gov.uk/government/publications/debt-respite-scheme-breathing-space-guidance/debt-respite-scheme-breathing-space-guidance-for-creditors
- Adfin - Credit control (accurate as of October 2026) https://adfin.com/credit-control
