UK statutory interest on late payments
Updated 28 June 2026
If another business pays you late for goods or services, UK law gives you a statutory right to charge interest and claim compensation on the overdue amount — even if your contract is silent on the point.
The right comes from the Late Payment of Commercial Debts (Interest) Act 1998. This guide summarises what you can claim. It is general information, not legal advice.
Statutory interest
For business-to-business debts, statutory interest is 8% plus the Bank of England base rate. It runs from the day the payment becomes late until the debt is paid.
If no payment date is agreed, the debt is generally due 30 days after the customer receives your invoice, or 30 days after delivery of the goods or service — whichever is later.
Fixed-sum compensation
On top of interest, you can claim a fixed sum for each overdue invoice, based on the size of the debt:
- £40 for a debt of less than £1,000
- £70 for a debt of £1,000 up to £9,999.99
- £100 for a debt of £10,000 or more
Reasonable recovery costs
If your reasonable costs of recovering the debt are higher than the fixed sum, you can also claim the difference — for example, the cost of using a debt-recovery agency or taking legal action.
Can you set your own terms instead?
You can agree your own payment terms and interest rate in a contract, but they must provide a 'substantial remedy' for late payment. If your contractual terms are unfair or absent, the statutory rights above apply.
Frequently asked questions
How much interest can I charge on a late invoice in the UK?
For B2B debts, statutory interest is 8% plus the Bank of England base rate, charged on the overdue amount from when it becomes late until it is paid.
Can I claim compensation as well as interest?
Yes. You can claim a fixed sum per invoice — £40, £70 or £100 depending on the debt size — plus any reasonable recovery costs above that sum.
Do I need it written into my contract?
No. The statutory right applies to commercial debts even if your contract does not mention it, though you can agree your own terms if they provide a substantial remedy.
When does an invoice become 'late'?
On the agreed payment date. If none is agreed, the debt is usually due 30 days after the customer receives the invoice or the goods/services are delivered, whichever is later.
Sources
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