If you agreed payment terms, your customer has until the date you agreed. If you agreed nothing, the law gives them 30 days, counted from the later of the day you finished the work and the day they had notice of the amount owed. Interest starts the day after that.
The short version
- Agreed terms govern. No agreed terms means a 30 day default under the Late Payment of Commercial Debts (Interest) Act 1998.
- The 30 days runs from the later of performance and notice of the amount, not from the invoice date.
- Statutory interest runs from the day after the due date at base rate plus 8%, currently 11.75%.
- You can also claim fixed compensation of £40, £70 or £100 depending on the size of the debt.
- These rights are business to business and public sector only. They don't apply to consumers.
What you are entitled to
The starting position is contractual. Whatever payment period you and your customer agreed is the period that applies, and it's the date your interest runs from.
Where nothing was agreed, section 4 of the Late Payment of Commercial Debts (Interest) Act 1998 supplies the default. The relevant day is the last day of a 30 day period, and that period begins with the later of the day the supplier's obligation was performed and the day the purchaser had notice of the amount of the debt.
That default isn't "30 days from the invoice". If you finish work on 1 September and invoice on 20 September, your clock starts on 20 September, because that's when your customer had notice of the amount. And if you invoice before you finish, the clock starts when the work is done.
Two limits apply on top of an agreed date. Where your customer is a public authority, the period cannot run beyond 30 days. Where they aren't a public authority, a longer agreed period is open to challenge if it's grossly unfair to the supplier.
What happens when they miss it
Statutory interest starts to run on the day after the due date, at base rate plus 8%. With the Bank of England base rate at 3.75%, that's 11.75% a year, simple interest, accruing daily until the debt is paid.
You can also claim a fixed sum per invoice:
| Debt | Fixed compensation |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
You can claim reasonable costs above that fixed sum as well, such as a collection agency or a solicitor. Statutory interest and compensation are exempt from VAT.
The right exists whether or not your contract mentions it. A contract can displace it, but only by providing a substantial remedy of its own.
The catch most people miss
The right applies automatically, but actually charging it is a separate decision you have to make.
Only 5.9% of UK businesses use the statutory right they already have. What stops most of them isn't ignorance of the rule: raising interest with a client you want to keep is an awkward conversation, and doing it by hand across a ledger is worse. So the entitlement goes unused and your terms quietly stretch.
So it's a process problem and not a legal one. Adfin applies statutory interest and the fixed compensation from the due date automatically, with configurable grace periods, and your payment link updates as the interest accrues. Your customer pays the interest and you keep it; Adfin takes the fixed compensation.
Why the answer matters less than the follow-up
Payment terms set an expectation, but what actually determines when you're paid is how easy your invoice is to pay and how consistently you follow it up.
Across Adfin, 72.7% of Apple Pay payments arrive on or before the due date, against 57.9% for bank transfer (Adfin platform data). Invoices set to collect automatically are paid 98.0% of the time; collected on demand, 90.8% (Adfin platform data, requests created in the seven months to the end of January 2026), with a direct debit mandate usually behind the first figure. Businesses on Adfin cut overdue invoices by 56%: 23.0% of invoices go overdue in month one, and 10.2% by month seven, measured on billers in their first seven months of collections.
Terms set your baseline, and how you collect the money is what tends to make the difference.
Common questions
How long does a customer have to pay an invoice in the UK? As long as you agreed. If you agreed nothing, 30 days from the later of the day you performed the work and the day the customer had notice of the amount owed.
Is it 30 days from the invoice date? Not necessarily. The 30 day default runs from the later of performance and notice of the amount. The invoice is usually what gives notice, so in practice it's often the invoice date, though not when you invoice before finishing the work.
Can a customer insist on 60 or 90 day terms? They can propose them, and if you agree they apply. A public authority cannot go beyond 30 days. For other customers, a longer period can be challenged if it is grossly unfair to the supplier.
When can I start charging interest? The day after the due date, at base rate plus 8%. The right applies automatically even if your contract says nothing about interest.
How much interest can I charge on a late invoice? Currently 11.75% a year, being the 3.75% base rate plus 8%. It's simple interest and it accrues daily. Check the rate that applies to your debt before you calculate, because the base rate moves.
Do these rules apply to consumers? No. Statutory interest and compensation apply to business to business and public sector debts only.
Sources
- legislation.gov.uk — Late Payment of Commercial Debts (Interest) Act 1998, section 4 (accurate as of August 2026)
- GOV.UK — charging interest on a commercial debt (accurate as of August 2026)
- GOV.UK — claiming debt recovery costs (accurate as of August 2026)
Reviewed by the Adfin team. This article explains how UK payment terms work and is not legal advice. The law and the statutory rate change; check current guidance before relying on them. Last updated August 2026.
