Late payment: the interest and the fixed sum almost nobody claims
24 September 2026 · 3 min read
Most late invoices are chased with a polite email. The law gives you considerably more than that, and it has done since 1998.
Under the Late Payment of Commercial Debts (Interest) Act 1998, when one business pays another late you can charge statutory interest and a fixed sum for the cost of recovering the debt. Both are yours by right. Neither has to be in your contract.
When a payment is late
If you agreed a payment date, it must usually be within 30 days for public authorities or 60 days for business transactions. You can agree longer than 60 days, but it has to be fair to both sides.
If you agreed nothing, the payment is late 30 days after the later of: the customer receiving the invoice, or you delivering the goods or service.
The interest
Statutory interest is 8% plus the Bank of England base rate, for business-to-business transactions.
The government's own worked example: on £1,000 owed, with a base rate of 0.5%, the annual interest is £85. That is 23p a day. After 50 days it is £11.50.
Two things worth knowing. The base rate moves, so the figure has to be looked up on the day — an out-of-date rate makes the claim wrong, not approximate. And you cannot claim statutory interest if your contract sets a different rate of interest. If you have a contract, read it before you add anything.
The fixed sum
On top of the interest you can charge a fixed sum for the cost of recovering the payment. It depends on the size of the debt:
| Debt | Fixed sum |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
You can charge it once per payment. Not once per reminder.
If you are a supplier, you can also claim reasonable costs each time you try to recover the debt, over and above the fixed sum.
Why so few people claim it
Because working it out is fiddly and the amounts feel small next to the invoice. £70 on a £4,000 invoice does not feel like it is worth the argument.
That is the wrong comparison. The fixed sum is not compensation for your time — it is a cost the late payer is meant to bear, and a customer who learns that paying you late has a price tends to stop doing it. The first claim is the expensive one to make. After that it is arithmetic.
What we do with it
When an invoice goes unpaid, we work out the interest for the days it has actually been late and the fixed sum for the size of the debt, and put both on the chase. If your contract sets a different interest rate, we leave the interest alone.
We do not add a reminder fee, because English law does not give you one. That is a Danish rule, and a charge without a legal basis is a claim that does not hold.
Source: gov.uk — Late commercial payments: charging interest and debt recovery, read 24 September 2026.