What is that late invoice really costing them?
When a business pays your invoice late, UK law lets you charge statutory interest plus a fixed compensation sum. Work out exactly what's owed under the Late Payment of Commercial Debts (Interest) Act 1998, then generate a polite-but-firm chaser letter. Free, no sign-up.
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How late payment interest works.
This applies to commercial debts: money owed between businesses (including sole traders and public bodies) for goods or services. It does not cover debts owed by consumers. When a business pays you late, the Late Payment of Commercial Debts (Interest) Act 1998 gives you an automatic right to charge interest and compensation, even if your contract is silent.
The interest rate is 8% above the Bank of England base rate. The base rate used is fixed twice a year: the rate in force on 30 June applies to debts that became due between July and December, and the rate on 31 December applies to debts due between January and June. So once your debt falls due, the rate is locked in for that six-month reference period rather than tracking every base-rate change.
On top of the interest you can claim a fixed compensation sum for the cost of chasing: £40 for debts under £1,000, £70 for debts of £1,000 up to £10,000, and £100 for debts of £10,000 or more. This is per invoice.
If your reasonable costs of recovering the debt come to more than the fixed sum, you can claim the difference too. It is usually worth sending a clear chaser first, setting out the original amount, the interest accrued and the compensation due, before taking any further step.
One home, every detail in order.
Stead keeps your property's paperwork, bills, maintenance and reminders together, so the things worth chasing, like an invoice quietly going past due, don't get lost in the pile.