UK late payment interest, worked out for you
If you sell to UK businesses, the law already lets you charge interest and compensation on late invoices. Almost nobody claims it because working it out is fiddly. Terms Due does the maths.
What the law allows
The Late Payment of Commercial Debts (Interest) Act 1998 lets a business supplier claim interest on a late business-to-business invoice at 8% a year above the Bank of England base rate, unless your contract sets a different substantial remedy.
You can also claim a fixed sum for the cost of recovering the debt, on top of the interest. Read the detail in our UK late payment interest guide.
Fixed compensation per invoice
| Invoice amount | Fixed sum |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
What Terms Due does
- Works out daily interest from the day after the due date, using the reference base rate for the right half-year.
- Adds the correct fixed compensation for each invoice.
- Shows interest and compensation as separate lines on the buyer's statement and final reminder.
- Lets you waive it for any company or invoice, for example a long-standing buyer who is rarely late.
Questions
Can I charge late payment interest to consumers?
No. The Act only covers business-to-business sales. Terms Due only applies it to B2B companies you mark as UK businesses.
Is this legal advice?
No. Terms Due calculates the figures from your invoice dates and amounts. Check your own trade terms and take advice for disputed debts.
Related
UK late payment interest
How statutory interest and fixed compensation work under the Late Payment of Commercial Debts (Interest) Act 1998, with a worked example.
Read moreEmail and text reminders
Send automatic email and text reminders for Shopify B2B invoices before and after the due date, with a one-tap pay link and firmer wording as invoices age.
Read moreStatements and pay-now page
Send monthly statements to Shopify B2B buyers and give them one page to see and pay every open invoice. Payments are recorded back on the Shopify orders.
Read moreStop chasing wholesale invoices by hand
Install Terms Due, set a credit limit for each buyer and let the app hold, remind and collect.
Install on Shopify