Key takeaways
- Most late payments are a systems problem: terms agreed vaguely, no due date, no follow-up plan.
- Chase gently on the due date, then at 7, 14 and 30 days overdue.
- For business-to-business invoices you can charge statutory interest (8% + Bank of England base rate) and a fixed recovery fee of £40–£100.
- At 30 days, switch from reminders to formal demand — and mean it: payment deadline, interest calculation, next step.
- After the formal demand, consider a late-payment letter before action or mediation — a lawyer's letter often settles it.
Day 0 — the due date: a polite nudge, not a note of panic
The first reminder goes out the day the invoice is due, before any awkwardness builds. One short line: "Friendly reminder that invoice INV-014 was due today — here it is again." It normalizes the payment and resets the conversation on your terms.
Day 7 — the "did you need something?" chaser
Seven days overdue, gently ask whether anything is blocking payment. Sometimes the answer is a genuine dispute or a missing PO number — better to find out now than at day 30. Still friendly, still factual, invoice attached.
Day 14 — the firm reminder
Firmer now, and introduce the interest you're entitled to: "As per the Late Payment of Commercial Debts Act, statutory interest of 8% plus the Bank of England base rate is now accruing on this invoice." You don't have to charge it — but stating it changes the conversation.
Day 30 — the formal demand
This is the letter that says: pay by a named date (universally 14 days), or we will take further action. Set out the overdue amount plus any statutory interest you are charging, and say what happens next (a late-payment letter before action, small claims track, or mediation). Keep it professional — it's a legal document now.
Day 45+ — escalate
Beyond the formal demand, the practical escalation ladder in England and Wales is: letter before action → mediation (often cheaper than you think, and free via the Small Claims Mediation Service under £10,000) → Money Claim Online for debts up to £100,000. Most freelancers stop at the lawyer's letter — it resolves the majority of cases without a hearing.
What you're legally entitled to charge
For business-to-business invoices, the Late Payment of Commercial Debts (Interest) Act 1998 lets you claim:
- Statutory interest — 8% per year plus the Bank of England base rate, on the overdue amount, from the day after the due date (unless your contract sets a rate).
- A fixed debt recovery cost — £40 for debts under £1,000, £70 for £1,000–£9,999.99, and £100 for £10,000+, per overdue invoice.
- Reasonable debt recovery costs beyond that, where you can evidence them.
Consumer invoices are a different world — there, your contract terms are the main lever, plus a statutory "late payment consumer debt" route if a fee was agreed. For most freelancers, the business-to-business provisions are the ones that matter.
Prevention beats collection
- Put explicit payment terms on the invoice ("Net 14" is not a due date — "due by 6 October 2026" is).
- Invoice the day you finish; older invoices get re-prioritized downwards.
- Collect a deposit from new clients (25–50%) — it filters out non-payers before you do the work.
- Keep a contact name at the client, not just "accounts".
Have a chaser ready before you need it
Four copy-paste reminder emails — due-date nudge to formal demand — free, no sign-up.
Frequently asked questions
What is statutory interest on late payments in the UK?
Under the 1998 Act, you can charge 8% plus the Bank of England base rate on late business-to-business payments, unless your contract says otherwise — plus a fixed recovery fee of £40–£100 depending on the debt size.
Can I charge late payment interest as a freelancer?
Yes, for business-to-business invoices. Sole traders and freelancers invoicing businesses can claim statutory interest and the fixed compensation fee. Consumer invoices follow your contract terms instead.
When should I send the first reminder?
On the due date itself, then at 7, 14 and 30 days overdue. Attach the invoice every time and keep each message progressively firmer but always polite.
What are the late payment compensation amounts?
£40 for debts under £1,000, £70 for £1,000–£9,999.99, and £100 for £10,000 or more — on top of statutory interest.
Does the Late Payment Act apply if my client is a bigger company?
Yes — that's exactly who it's designed for. The Act applies to commercial debts regardless of how large the paying business is.
Should I stop work for a non-paying client?
Generally yes for new work — continuing to deliver to someone 60 days overdue is how simple debts become compound problems. Pause on the formal-demand date and say so clearly.
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General guidance only — this is not legal advice. Interest rates and thresholds can change; check the current statutory rates before relying on them. Last reviewed 23 September 2026.