Glossary

Statutory late-payment interest

Statutory late-payment interest is what a UK business may charge on overdue commercial invoices — base rate plus 8% — under the Late Payment of Commercial Debts (Interest) Act 1998.

2 min read

Base + 8%The statutory rate

Plus a fixed fee£40–£100 per invoice

Definition

Statutory late-payment interest entitles a business to charge interest on late commercial invoices at the Bank of England base rate plus 8%, together with a fixed recovery fee (£40, £70 or £100 depending on the debt size), under the Late Payment of Commercial Debts (Interest) Act 1998. It applies unless the contract sets a substantial alternative remedy.

In plain terms

It is your legal right to charge for being paid late — a powerful lever for prompt payment, even if rarely enforced in full.

Why it matters for your company

Work out what a late invoice is costing you and what you can claim with the late payment interest calculator. See default interest.

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