Getting paid on time and late payment interest

Under the Late Payment of Commercial Debts (Interest) Act, you can charge business clients interest of 8% above the Bank of England base rate on late invoices.

Fixed compensation

You can also claim a fixed sum: £40 for debts under £1,000, £70 for debts from £1,000 to £9,999.99, and £100 for debts of £10,000 or more.

Chasing payment

Send a polite reminder when an invoice is overdue, then a firmer letter after 14 days mentioning statutory interest. Members can use our template letters.

Download: Late payment letters (Word, 37 KB)

Good to know

• Our business guides are reviewed every year by the Professional Practice team.
• Members can book a free 30-minute call with one of our partner accountants each year.
• Keep business and personal finances in separate bank accounts; it makes tax returns much easier.

Downloads

• Rates survey 2026 full report (PDF, 7 KB)
• Business expenses checklist (PDF, 95 KB)

Page last reviewed 23 March 2026