Free tool
What you can charge them for paying late
When another business owes you money, the law lets you add interest and a fixed sum on top. Most tradespeople never claim either, usually because nobody has told them the number.
Type in today’s rate. We deliberately do not hard code it, because it moves and a stale number here would be worse than none. Look it up at the Bank of England.
Statutory interest is 8% plus the base rate, so you are claiming 8% a year.
You can claim, on top of the invoice
£96.30
Put today’s base rate in and this becomes your real figure. Until then it is calculated on the 8% alone, so it is understated.
How that was worked out
The fixed sum is set by the legislation and steps with the size of the debt: £40 up to £999.99, £70 from £1,000 to £9,999.99, and £100 at £10,000 or more. You can charge it once for each payment.
When this does not apply
It is for one business chasing another. If you are owed money by a householder, this is not the route, and most domestic work is that. If your contract sets its own interest rate, that rate governs instead, and you cannot agree a lower rate than the statutory one with a public authority.
A calculator, not legal advice. The rules are at gov.uk, and a solicitor is worth a phone call before you escalate anything substantial.
The number is not the point
On a £4,000 invoice a month late, the interest is a few tens of pounds. What changes the conversation is that you have worked it out, written it down and told them you are entitled to it, because most people who pay late are doing it to whoever complains least.
Say it on the invoice
Terms on the invoice, before anything is late, do more than a letter afterwards. A line saying statutory interest will be charged is enough.
Thirty days is the default
Where you agreed no payment terms, the clock starts thirty days after the work or the invoice, whichever is later. Agree terms and you take the argument away.
Decide before you need it
Whether you will actually charge a customer you want to keep is a decision to make calmly, not at eleven at night when the bank balance is low.
Or stop having to chase at all
Belo reminds them before it is due, on the day, and at seven, fourteen and thirty days late. Every reminder is written for you and shown to you before it goes.