Debt Collection Agency Charges UK: A CFO's Pricing Guide

8-25%Contingency range — depends on debt age and profile

GBP 100Late Payment Act — fixed compensation paid by debtor

£1,500-2KBreak-even threshold for single-invoice placement

How UK debt collection agency charges are structured

8-15%Fresh <90dNo-win-no-fee — clean documentation, uncontested

20-25%Aged 12-24moHigher rate reflects lower collection probability ~40%

GBP 40/70/100Late Payment ActFixed compensation per invoice — paid by debtor not creditor

BoE+8%Statutory interestLate Payment of Commercial Debts Act 1998 — automatic B2B

GBP 1.5-2KBreak-evenBelow: in-house chase or solicitor letter before action

UK commercial collection pricing

1

Three UK fee models: which applies to your file

(1) No-win-no-fee contingency: 8-15% fresh (<90d), 20-25% aged (12-24mo), 25-35% distressed (3+yr). Zero risk to creditor if nothing recovered. (2) Fixed file-opening fee GBP 25-75 + reduced success rate 6-10%: file fee is sunk cost. Medium-volume, smaller invoices. (3) Retainer / portfolio: 50+ files/month or >GBP 500K ledger. Negotiated quarterly. For insurers, factors, export finance. Cross-border adds +3-8pp correspondent fee.

2

Late Payment Act 1998 — statutory offset that reduces net cost

BoE base rate + 8% p.a. from due date — automatic B2B right (no contract clause needed). Fixed compensation paid BY DEBTOR: <GBP 1K → GBP 40 / GBP 1K-9,999 → GBP 70 / ≥GBP 10,000 → GBP 100. Collected in ~70% of successful out-of-court settlements. On GBP 14,000 invoice: GBP 100 covers half a standard file-opening fee. Always include Late Payment Act claims in every placement brief.

3

What contingency excludes — separate costs to authorise

Commission covers ONLY agency labour (calls, letters, negotiation, case management). EXCLUDED and separately authorised: (1) MCOL court issue fees — fronted by creditor, recoverable from debtor on judgment. (2) Solicitor fees GBP 200-400/hr or GBP 50-150 fixed letter before action. (3) HCEO writ of control fees for judgments >GBP 600. (4) Foreign correspondent fees +3-8pp. (5) Skip trace/asset search GBP 50-250.

Your UK customer is 120 days overdue on a GBP 14,000 invoice. At 15% contingency: GBP 11,900 net + GBP 100 Late Payment Act compensation + ~GBP 80 statutory interest = ~GBP 12,080 back against GBP 14,000. B2B collection in the UK: FDCPA doesn’t apply. FCA CONC doesn’t apply. Commercial law only — faster and more direct than consumer collection.

UK collection: break-even by invoice value

Invoice sizeBest approachEconomics

Below GBP 1,500

In-house or LBA

GBP 50-150 solicitor letter before action recovers ~40% without further escalation

LBA: GBP 50-150

GBP 1,500 – 5,000

Agency viable

8-15% contingency + Late Payment Act GBP 40-70 offset — economics work

8-15% + LPA

GBP 5,000 – 10,000

Strong case

LPA GBP 70 + BoE+8% significantly offset commission costs

10-15% + LPA

Above GBP 10,000

Strongly favoured

LPA GBP 100 + statutory interest tilts economics firmly in favour of placement

8-12% + LPA

Above GBP 100,000

Judicial path

MCOL for <GBP 100K — HCEO writ of control for enforcement after judgment >GBP 600

Judicial

How much do debt collectors charge in the UK?

UK commercial B2B: 8-15% no-win-no-fee for fresh debts <90 days, 20-25% aged 12-24 months, 25-35% distressed 3+ years. Court fees (MCOL), solicitor fees (GBP 200-400/hr or GBP 50-150 fixed LBA), HCEO fees are SEPARATE from contingency. Late Payment of Commercial Debts Act 1998: BoE+8% p.a. + GBP 40/70/100 fixed compensation paid by the debtor. Break-even for single-invoice placement: GBP 1,500–2,000.