What counts as late payment for a UK business?

2 min read

30 daysDefault term

8% + baseStatutory interest

+ fixed feeRecovery charge

The rules

Under the Late Payment of Commercial Debts legislation, a business-to-business invoice becomes late once the agreed credit term expires. If no term was agreed, the default is 30 days after delivery or invoice, whichever is later. From that point you may charge statutory interest at 8% above the Bank of England base rate, plus a fixed recovery sum (£40–£100 depending on invoice size).

What this means for your company

The UK's slow-payment culture is a real cash-flow drain, so knowing your rights matters. State your terms and your right to charge interest on every invoice, and follow a consistent credit-control process. Charging interest is often more about signalling seriousness than the sum itself. Where late payment keeps opening a cash gap, tighten collections first and use a facility only for the genuine shortfall.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.

Frequently asked questions

How much statutory interest can I charge?

8% above the Bank of England base rate on the overdue amount, plus a fixed recovery fee of £40, £70 or £100 depending on the invoice value. You can charge it even if it was not written into the contract.

Should I always charge late-payment interest?

Not always — with a valued customer a firm reminder may serve better. But making clear you can charge it, and doing so with persistent late payers, protects your cash and sets expectations.