Late payment laws › United Kingdom

UK late payment law: statutory interest and fixed compensation (B2B)

Not legal advice. Every statement below links to the official source it comes from.

If you invoice another business in the UK, the law gives you a right to statutory interest and fixed compensation when they pay late, even if your contract says nothing about late fees. It does not apply to invoices to consumers.

What the law says

• Business-to-business payments become late after the agreed payment date or, if none was agreed, 30 days after the customer receives the invoice or the goods/services.
  Source: GOV.UK: When a payment becomes late
• Payment terms between businesses are normally limited to 60 days, unless both sides agree longer terms that are not 'grossly unfair'.
  Source: GOV.UK: When a payment becomes late
• Statutory interest is 8% plus the Bank of England base rate, calculated as simple interest from the day after the due date.
  Source: GOV.UK: Charging interest; Late Payment of Commercial Debts (Interest) Act 1998
• You can also claim fixed debt-recovery compensation: £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more.
  Source: GOV.UK: Claim debt recovery costs

Use it in your reminder

Mention the rule calmly and factually in your firm or final reminder, e.g. “Under [law], payment was due by [date]. Please pay by [deadline].” Work out the exact amount with the late payment interest calculator.

Related

• UK letter before claim template
• UK interest calculation guide

Other jurisdictions

European Union · Australia · Canada (Ontario) · New York State · New York City · California · Illinois · Los Angeles · Columbus, Ohio · Minneapolis · United States (general)

Not legal advice. This page summarises official sources as of 31 October 2026 for general information; laws change and details depend on your contract and circumstances. Check the linked source or ask a qualified lawyer before relying on it.