Late payment is a choice they make. The law charges for it. Speak to Kestrel.
Persistent late payment by a business customer is not a fact of life, it is a debt with a price on it. The law adds statutory interest at 8% above the Bank of England base rate plus fixed compensation of £40 to £100 per invoice, and you can claim it on invoices paid late over the past six years, not just the ones still open.
The Late Payment of Commercial Debts (Interest) Act writes payment discipline into every business-to-business contract. If no credit period is agreed, payment is due within 30 days; after that, statutory interest at 8% above base rate runs automatically, with fixed compensation per invoice on top.
Contract terms that try to strip this out only work if they provide a substantial remedy for late payment. A customer cannot simply impose token interest or endless payment terms because it suits their cash flow; grossly unfair terms do not stand.
The claim is retrospective. Invoices your customer paid late within the last six years still carry their statutory interest and compensation. A ledger of habitual lateness can add up to a significant, entirely lawful claim, which is a strong card in renegotiating terms.
Guide edition: August 2026. General information for England and Wales. Current law and your particular facts require assessment before action.
Every invoice, its due date, and the date it was actually paid. The machine does this arithmetic in minutes, including interest and compensation per invoice.
Often the first move is a letter that reprices the relationship: here is the statutory position, here is what we are owed, here is the payment discipline we need going forward.
For sums still outstanding, a letter before action with interest and compensation itemised, and a deadline.
Unpaid after the deadline: a court claim for debt, interest and compensation. Most large customers settle well before a hearing.
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Speak to Kestrel nowSix years. Interest and fixed compensation can be claimed on late-paid invoices going back six years, as well as on anything still outstanding.
This guide concerns Money & debt recovery. It forms part of our reference library. Kestrel is preparing for SRA authorisation. See practice details for the proposed service and current availability.
Some businesses fear that; the data mostly says otherwise. Customers pay the suppliers who are organised about money first. A measured letter about the statutory position is a negotiation, not a declaration of war, and it can be framed that way.
Long terms are allowed if genuinely agreed and not grossly unfair, but they cannot be used to oust the Act's protection. If the terms were dictated rather than negotiated, they are worth challenging.
Yes. Statutory interest and compensation accrue from the moment an invoice goes overdue, and payment of the invoice does not wipe them. Six years of habitual lateness is claimable.
Fixed by law at £40 for debts under £1,000, £70 up to £10,000, and £100 above that, per invoice, plus the interest. On a busy ledger it compounds quickly.
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