Glossary · Legal and regulation
Fixed-sum compensation
Also called €40 recovery fee, Late payment compensation
Fixed-sum compensation is the flat amount EU and UK law let a supplier claim per late B2B invoice: €40 in the EU, £40 to £100 in the UK.
Under the EU Late Payment Directive, a supplier paid late by a business customer is entitled to at least €40 per invoice as compensation for recovery costs. It is due automatically, without a reminder, and comes on top of statutory interest. Further reasonable recovery costs can be claimed beyond the €40.
The UK has its own version under the Late Payment of Commercial Debts (Interest) Act 1998: £40 for debts under £1,000, £70 for debts from £1,000 to £9,999.99, and £100 for debts of £10,000 or more.
Many suppliers never claim it. Claiming it on a long-standing client may not be worth the friction, but mentioning that it applies — in your terms and in later reminders — is often enough to move an invoice up the payment queue.
Example
A Dutch agency has three invoices paid late by the same business client. It is entitled to €120 in fixed compensation — €40 per invoice — plus statutory interest on each.