You're legally owed 8% interest on every late invoice — what tradespeople aren't claiming

The average UK invoice is now paid 54 days after it's issued. For tradespeople running on tight margins and waiting on materials, that gap is the difference between paying the mortgage and not.

What most tradespeople don't know is that the law is already on their side. The Late Payment of Commercial Debts (Interest) Act 1998 entitles you to statutory interest on every commercial invoice that isn't paid on time — plus a fixed compensation fee.

For every overdue commercial invoice you can charge:

• Statutory interest at the Bank of England base rate + 8% per year (currently 11.75% in total — the BoE base rate was held at 3.75% on 30 April 2026), calculated simply on the unpaid amount from the day after the due date.
• A fixed compensation fee per invoice: £40 for invoices under £1,000; £70 for invoices between £1,000 and £9,999.99; £100 for invoices over £10,000.
• Reasonable costs of recovering the debt above the fixed fee, if you can evidence them.

This is automatic — you don't need a clause in your contract. It applies to every business-to-business invoice. It does not apply to consumer invoices.

Try it yourself with our free Late Payment Calculator — no signup, takes 30 seconds, gives you a ready-to-send reminder.

Three reasons. First: they don't know it exists. Most plumbers and electricians we've spoken to had never heard of the Act.

Second: the calculation is fiddly. Base rate × days × principal ÷ 365 is fine on paper, but it's the kind of admin you don't do after finishing the day on site.

Third: they worry it'll annoy the client. In practice, attaching a clear statutory citation to a reminder usually triggers payment fast — because the client knows you're right.

We watch every invoice for its due date. The moment it's late, we calculate the statutory interest and the compensation fee, and generate a polite reminder with the legal citation already in it. Your job is to tap "send".

You get paid faster, with the law on your side. No subscription uplift, no per-invoice fee. £15/month, locked. Forever.

The Late Payment of Commercial Debts (Interest) Act 1998 sets the statutory interest rate at 8% above the Bank of England base rate. With BoE base at around 4.25% in mid-2026, the effective rate is roughly 12.25%. The fixed compensation fee depends on invoice size: £40 for invoices up to £999.99, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more.

£500 invoice, 30 days late. Interest: £500 × 12.25% × (30 ÷ 365) = £5.03. Compensation fee: £40. Total recoverable: £45.03 on top of the £500.

£2,000 invoice, 60 days late. Interest: £2,000 × 12.25% × (60 ÷ 365) = £40.27. Compensation fee: £70. Total recoverable: £110.27 on top of the £2,000.

£10,000 invoice, 90 days late. Interest: £10,000 × 12.25% × (90 ÷ 365) = £302.05. Compensation fee: £100. Total recoverable: £402.05 on top of the £10,000.

The rate floats with BoE base, so always recalculate at the point you raise the claim — but the right to claim is fixed in the Act. You don’t need the contract to mention it. You don’t need the customer to agree. The clock starts at the end of the agreed payment terms, or 30 days after the invoice date if no terms were specified.