If they were in the initial contract, I think it can still hold:
"You can calculate the interest payable on overdue bills by taking the relevant reference rate and adding 8 per cent.
Alternatively, you can set a contractual rate that may be higher or lower than the statutory rate. If you set a contractual rate, the statutory rate no longer applies"
Interesting. The ability to charge a late fee is guaranteed by the Late Payment of Commercial Debts (Interest) Act 1998 which sets the statutory rate. Even though you could set significantly higher rates in your contract, the client might have remedy under the Unfair Contract Terms Act, where the supplier would have to show that the late fee is reasonable in relation to the damages sustained by late payment. Late payment is a breach of contract, so late fees have to be in line with the actual damages caused by that breach.
"You can calculate the interest payable on overdue bills by taking the relevant reference rate and adding 8 per cent.
Alternatively, you can set a contractual rate that may be higher or lower than the statutory rate. If you set a contractual rate, the statutory rate no longer applies"
http://www.businesslink.gov.uk/bdotg/action/detail?itemId=10...