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Late invoice in the UK: terms, interest and reminders

Most late payments are not refusals — the invoice was forgotten, lost or never reached the right person. A clear due date and a polite, timely reminder solve most of them. For business customers, UK law also gives you interest and compensation when they are late.

1. Set the terms before you start

Put the due date on every invoice: "Payment within 14 days" or a date. If you and a business customer agree no terms, the law treats payment as due 30 days after the customer receives the goods, the service or the invoice, whichever is later. Public bodies must pay within 30 days; large companies can agree up to 60.

2. Remind early, and keep it short

• A few days before the due date: a friendly note with the invoice number, amount and due date.
• On the day after: "Invoice INV-0042 for £480 was due yesterday — could you let me know when it will be paid?" with the invoice attached.
• After 7 to 14 days: a firmer reminder that mentions the late payment interest you are entitled to.
• Final notice: say what you will do next and by when — and then do it.

A message on the channel your customer actually reads — often WhatsApp — gets a faster answer than an email that sits unopened.

3. Statutory interest (business customers)

Under the Late Payment of Commercial Debts (Interest) Act 1998, when a business pays you late you can claim interest at 8% a year above the Bank of England base rate, unless your contract sets a different, substantial rate. It does not apply to sales to consumers. Work out the daily interest like this:

amount × (8% + base rate) ÷ 365 × days late. On a £1,200 invoice paid 30 days late with a 4% base rate: £1,200 × 12% ÷ 365 × 30 = £11.84.

4. Fixed compensation

On top of the interest, you can claim a fixed sum for each late invoice from a business customer:

5. If they still do not pay

Send a letter before action giving a final date. For debts up to £10,000 in England and Wales, you can then make a small claim online through Money Claim Online. Scotland and Northern Ireland have their own simple procedures.

Make it easy to pay on time

Number every invoice, state the due date and your bank details, and record part payments against the invoice so the balance is always clear. The free InvoiceMate app shows who owes you and how much, and sends the reminder with the invoice on WhatsApp in one tap.