Late payment interest in the UK: what you can actually charge

When a client pays late, you are not just owed the invoice. Under UK law you are entitled to interest and a fixed sum on top, whether or not your contract mentions it. Most freelancers never claim it, which is exactly why some clients keep paying late. Here is what you can charge.

Statutory interest: 8% + the Bank of England base rate

The Late Payment of Commercial Debts (Interest) Act lets you charge interest on overdue commercial invoices at 8% above the Bank of England base rate. It applies to business-to-business invoices once payment is past the agreed date (or 30 days if no date was agreed).

Plus a fixed sum for each late invoice

You can also claim a fixed amount per overdue invoice, on top of the interest:

• £40 for a debt under £1,000
• £70 for a debt of £1,000 to £9,999.99
• £100 for a debt of £10,000 or more

And if recovering the money costs you more than that fixed sum (say, hiring help), you can claim the reasonable extra costs too.

How to work out what you're owed

Interest accrues daily from the day after payment was due. The quick version: (amount × (8% + base rate) ÷ 365) × days overdue, plus the fixed sum above. Rather than do it by hand, drop the numbers into our free late payment interest calculator and it works out the interest and the fixed compensation for you.

How to actually ask for it

You do not have to be aggressive. A line like: “As the invoice is now [X] days overdue, statutory late-payment interest and compensation of [amount] applies under the Late Payment of Commercial Debts Act” is usually enough to move a stalling client. Often you can waive it as a goodwill gesture once they pay, but naming it changes the conversation.

The deeper fix is not having to chase at all: clear terms up front, and reminders that go out automatically the moment an invoice slips past due.