They still haven't paid. What can I claim?

When the invoice actually became late

Agree a payment date and that is the date. Agree nothing, expressly or by implication, and the law normally gives your customer 30 days, counted from the later of two events: the day you finished the work, or the day they had notice of what they owed. Interest starts the day after.

Agree a long date and there are caps. A public authority is held to the end of the 30-day period. Another business is held to the end of the 60-day period, unless the day you agreed is not grossly unfair to you, which is a judgement about your bargain, not a sum. Some facts we hold rather than guess at, among them an acceptance or verification procedure, an advance payment, and hire with periodic payments. Tick one of those and you still get the debt on screen, without a formal claim built on a rule we haven't implemented.

The statutory interest rate, and why it does not move

On a commercial debt it is 8 per cent over the Bank of England base rate. The part that catches people out is which base rate. Article 4 of the 2002 rate order fixes it once, by reference to the 30 June or the 31 December immediately before your interest starts running, and there it stays. If the Bank moves next month, your figure doesn't move with it. Plenty of calculators re-split the sum at every base-rate change, which hands the debtor's accountant something to pull apart.

We ship the reference rates as dated rows, and they run out on 31 December 2026. A debt whose interest starts outside that window gets no interest figure at all, only the reference date we would need to work it out. A rate we can't vouch for is worse than no rate, because it goes into a demand for money under your name.

The fixed compensation band

On top of the interest, a qualifying late commercial debt earns a flat sum for the trouble of chasing it, and you don't have to prove you spent anything to get it. The cut-offs are strict, which is the bit worth reading twice. Strictly less than one thousand pounds takes the forty-pound sum, and a debt of exactly one thousand pounds does not. One thousand or more, and strictly under ten thousand, takes seventy. Ten thousand or more takes a hundred, and exactly ten thousand counts as ten thousand or more.

One penny of debt therefore moves the compensation by £30.00, which is why we spell the boundaries out in words. Where chasing the debt has cost you more than the fixed sum, the Act lets you claim the difference, and the letter says what that sum is for.

How we round, and why we round down

We work the interest out exactly across the whole period and floor it to the penny once, right at the end. Two things follow. Your letter never claims more than the unrounded result under that method. And the daily figure on the card, multiplied by the days, lands a little under the interest to date: on the worked example, £0.75 a day across 61 days is £45.75, against £45.95 of interest.

That 20p gap is rounding we deliberately don't compound. Round first and multiply afterwards and the error grows with every day that passes. The Act does not prescribe a rounding rule, so this one is our choice, and the working says so rather than dressing it up as the law.

A buyer acting in the course of a business

The Late Payment of Commercial Debts (Interest) Act 1998 applies where the buyer and the seller are each acting in the course of a business. A limited company, a partnership, a letting agent, a main contractor, a council: all in. On those debts you can claim the debt itself, statutory interest and the fixed sum, subject to the Act's own exclusions and to any competing remedy sitting in your contract.

A private homeowner having a bathroom done

Not in, and no amount of firm wording changes it. Tell a homeowner in writing that they owe you statutory interest and a fixed sum under a 1998 Act, and you have made a false statement about their legal position inside a demand for money. Since April 2025 that risks being a misleading commercial practice where it is likely to change the average consumer's transactional decision, and an unlawful action threat is one of the factors that decide whether a practice is aggressive. We'd rather not be explaining it.

Put these in the envelope

• An up-to-date statement of account for this debt.
• The Information Sheet at Annex 1 to the protocol.
• The Reply Form, from the same annex.
• The Financial Statement form at Annex 2.

We print the first one for you. The other three come from the protocol itself, so download them, print them, and put them in with your letter.

After you post it

• 1Date it near the top of the first page, and post it that day or the next.
• 2Wait 30 days from that date before you issue anything.
• 3If the Reply Form comes back, do not issue less than 30 days after you received it, or 30 days after you handed over any documents they asked for, whichever falls later.
• 4Answer a request for a document or for information within 30 days.
• 5If you have both had your say and still cannot agree, give at least 14 days' notice before you issue.

How much interest can I charge on an unpaid invoice?

If your customer is another business, 8 per cent a year over the Bank of England base rate, which puts it at 11.75 per cent at the moment. You do not need a late-interest clause of your own where the statutory term applies, though a competing contractual remedy or another statutory gate can change that. If your customer is a private homeowner, the answer is nothing at all unless your written terms say otherwise.

What is statutory interest?

Interest that the Late Payment of Commercial Debts (Interest) Act 1998 adds to a qualifying late business-to-business debt, where no exclusion or substantial contractual remedy displaces it. It is simple interest rather than compound, and it starts running the day after payment was due. A fixed compensation payment comes with it.

Can I charge a homeowner interest for paying late?

Only where you agreed a term, and even then the whole term needs checking before an amount is calculated or demanded. We record the written wording for that review rather than working a figure out from the rate on its own. The commercial Act does not reach consumers. A term that charges a disproportionately high sum can be unfair and not binding under the Consumer Rights Act 2015, so a punchy rate is not the win it looks like.

Do I need a solicitor to send a letter before action?

No. You can send it yourself, in your own name. What matters is that the letter says the right things and gives the right amount of time, and that is the part we do for you. If the job is disputed, or your contract has an interest term in it, that is the point to take advice rather than press on.

Can I send a letter before action by email?

Where the Debt Claims Protocol applies, which is normally a business chasing an individual, sole traders included, and no other protocol covers the debt: post it, and you may email it as well. If the debtor has explicitly asked you not to use post and given you other contact details, use those instead. For a company debtor there is no posting rule. Keep proof you sent it either way.

How long do I have to give them after a letter before action?

Thirty days from the date at the top of the letter if the debt protocol applies. Fourteen days is the yardstick for a straightforward claim against a company under the Practice Direction. If they reply, wait at least 30 days from receiving the Reply Form, or 30 days from providing any documents they asked for, whichever is later. If you still cannot agree, give at least 14 days notice before you issue.

Is a letter before action a legal requirement?

The court expects you to have followed the pre-action route that applies to your debt, and material non-compliance can affect case management, costs or interest. So the response period is part of the claim rather than a drafting preference. Shortening it to make a point is the edit most likely to cost you money later.

Can I claim the fixed compensation on every late invoice?

We handle one payment due under one invoice, and on that scope the fixed sum attaches once statutory interest starts running on that qualifying debt. The statute frames it per qualifying debt and GOV.UK puts it as once for each late payment. Forty pounds under a thousand, seventy from a thousand to just under ten thousand, and a hundred at ten thousand and above. Three qualifying late payments can mean three fixed sums.

How long can I chase an unpaid invoice?

In England and Wales, section 5 of the Limitation Act 1980 usually gives you six years from the day the cause of action accrued on a simple contract. Other facts can move that, so if an invoice is getting anywhere near six years old, take advice rather than a view.