What can you charge for a late invoice?
If another business pays you late, UK law lets you add interest at 8% above the Bank of England base rate, plus a fixed sum toward the cost of chasing it. You don’t need it written into the contract and you don’t need their agreement. It applies automatically.
Almost nobody claims it. Here’s what you’re owed.
Based on the Late Payment of Commercial Debts (Interest) Act 1998: 8% above the Bank of England base rate (currently 3.75%), plus £40, £70 or £100 depending on the size of the invoice. Applies to business-to-business debts. This is general information, not legal advice.
The bits worth knowing
When does the clock start?
The day after payment was due. If you agreed no terms, the default is 30 days from whichever came later: finishing the work, or them receiving your invoice.
Do I have to have warned them?
No. The right is statutory: it exists whether or not your contract mentions it, and a term trying to remove it is usually unenforceable.
Will it wreck the relationship?
Plenty of builders work out the figure and never send it, they just want a client who knows the number exists. Mentioning it politely is usually enough to move an invoice up someone’s pile.
Does it apply to everyone?
Business-to-business debts only. Work for a homeowner is a consumer contract and different rules apply.
The real problem is knowing which invoice is about to go bad
Ledgerhead watches every job and invoice, flags the ones putting your cash at risk, and chases late payers in your name before you have to work out what you can charge them.
Try it free