How to chase late payments in the UK
If another business is late paying you, UK law may let you charge statutory interest and a fixed recovery sum. This page summarises the official GOV.UK guidance. It is not legal advice, and it does not apply in the same way to every contract or to every customer.
When a payment is late
GOV.UK’s guide to late commercial payments says:
- If you agree a payment date, it must usually be within 30 days for public authorities, or 60 days for business transactions. You can agree a longer period than 60 days for business transactions, but it must be fair to both businesses.
- If you do not agree a payment date, the law says the payment is late 30 days after either the customer gets the invoice, or you deliver the goods or provide the service (if this is later).
Statutory interest
For business-to-business transactions you can often claim ‘statutory interest’. GOV.UK states that this is 8% plus the Bank of England base rate. You cannot claim statutory interest if there is a different rate of interest in a contract. You cannot use a lower interest rate if you have a contract with public authorities.
See GOV.UK: Interest on late commercial payments, and check the current Bank of England Bank Rate before you calculate anything. GOV.UK’s worked example uses a base rate of 0.5%, which is not necessarily the rate in force today.
Interest runs from the day after payment was due. GOV.UK says you should send a new invoice if you decide to add interest to the money you are owed.
These rights come from the Late Payment of Commercial Debts (Interest) Act 1998.
Fixed compensation for recovering the debt
On top of interest, you can charge a business a fixed sum for the cost of recovering a late commercial payment. GOV.UK sets these amounts out as follows, and says you can only charge the business once for each payment:
| Amount of debt | What you can charge |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
Source: GOV.UK: Claim debt recovery costs on late payments. The same amounts appear in section 5A of the 1998 Act. If your reasonable costs of recovering the debt are higher than the fixed sum, the Act also allows you to claim the difference.
A practical way to chase an unpaid invoice
- Check the invoice is clear, was sent to the right person, and that the due date has passed. If the customer has raised a genuine dispute, deal with that first.
- Send a polite reminder, with the invoice, the amount outstanding and a way to pay.
- If it stays unpaid, send a firmer chaser. If you intend to claim statutory interest or the fixed recovery sum, say so clearly and be accurate about the figures.
- Keep a record of what you sent and when. If you still cannot resolve it, you may want advice from a solicitor, or to look at the Office of the Small Business Commissioner, which supports small businesses with payment issues.
How Invoice Nexus can help
Invoice Nexus can email unpaid invoices on a schedule you choose — for example before the due date, on the day, and a set number of days after — and can include a payment link if you have connected Stripe. Each reminder is logged so it is not sent twice, and you can switch reminders off for an individual invoice.
Invoice Nexus does not calculate statutory interest or the fixed compensation sums for you, and it does not start legal action. Those steps remain yours, with advice if you need it.
Create a free account to send invoices and switch on payment reminders. No monthly fee — just 1% per online payment, plus Stripe's own processing fees.