If you agreed payment terms with a business customer, they have until the date you agreed. If you agreed nothing, the law gives them 30 days, counted from the later of the day you did the work and the day they were told the amount, and statutory interest can run from the day after. Consumers aren't covered by that 30-day default, so for them the deadline is whatever your contract says.
In this article
The short version
- If you agreed payment terms, the customer has until the agreed date.
- With nothing agreed, a business customer has 30 days from the later of the work and notice of the amount.
- Public authorities can't take more than 30 days; terms over 60 days must not be grossly unfair.
- After the deadline, statutory interest of 11.75% a year and £40 to £100 compensation apply.
- These rules don't cover consumers.
If you agreed payment terms
For invoices between businesses, the agreed date is the deadline. If your contract or accepted quote says 14 days, your customer has 14 days, and it's the date your interest rights run from.
The Late Payment of Commercial Debts (Interest) Act 1998 puts two limits on what can be agreed:
- if your customer is a public authority, the payment date can't be more than 30 days away
- for other customers, a period longer than 60 days only stands if it isn't grossly unfair to you
If your customer has a process for checking that goods or services match the contract before they pay, that check is normally limited to 30 days too, unless the contract expressly allows longer and the longer period isn't grossly unfair to you.
The law may tighten. The Commercial Payments Bill, still going through Parliament, would cap payment terms between businesses at 60 days, but it isn't law yet and the government has said the cap would start no earlier than 2027.
If you didn't agree any terms
When nothing was agreed, the deadline is the last day of a 30-day period. That period starts on the later of two dates: the day you did the work or delivered the goods, and the day your customer was told how much they owe.
That isn't always "30 days from the invoice". Say you finish a job on 1 September and invoice on 20 September. Your customer had notice of the amount on 20 September, so the 30 days start then, the payment is due by 19 October, and interest can start on 20 October. If you invoice before you finish, the clock starts when the work is done.
The practical point is that every day you take to send the invoice is a day added to your wait. Sending it the day the work finishes is the simplest way to bring your own payment date forward.
Consumers are different. The 30-day default and the statutory interest scheme only apply to debts between businesses, including the public sector. If you sell to individuals, the payment deadline is whatever your terms say, so put a clear due date in your contract and on the invoice.
What you can charge once the deadline passes
From the day after the deadline, a business customer owes statutory interest at 8% above the Bank of England base rate. With the base rate at 3.75%, that's 11.75% a year, charged as simple interest for each day the invoice is late.
You can also claim a fixed sum for each invoice, on top of the interest:
| Invoice amount | Fixed compensation |
|---|---|
| Under £1,000 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
If your reasonable costs of recovering the debt are higher than the fixed sum, such as a collection agency's fees, you can claim the difference too. These rights exist whether or not your contract mentions them. A contract can replace them, but only with its own remedy that's substantial.
These rights often go unused. In government research published in 2025, only 5.9% of businesses said they had introduced or increased a penalty on overdue invoices. Raising interest with a customer you want to keep can feel awkward, and calculating it by hand across a ledger is tedious.
How to make the deadline count
A payment deadline helps most when your customer can see it and act on it. Write the due date on the invoice as a date, not a number of days, and send the invoice the day the work is done. Give your customer a way to pay straight from the invoice, such as a payment link, so meeting the deadline takes a few taps, and follow up before the due date as well as after it.
If you want late fees applied without anyone working them out, Adfin can add statutory interest to overdue business invoices automatically from the due date, with grace periods and the option to waive them for particular customers. The payment link updates as the interest builds. Its collection agents also chase overdue invoices over email, SMS or WhatsApp on the schedule you set.
Common questions
How long does a customer have to pay an invoice in the UK? As long as you agreed. For business customers with no agreed terms, it's 30 days from the later of the work being done and them being told the amount.
Is it 30 days from the invoice date? Often, but not always. The 30 days run from the later of the work being done and your customer knowing the amount, which is usually the invoice date unless you invoiced before finishing.
Can a customer insist on 60 or 90-day terms? They can ask, and if you agree, those terms apply. A public authority can't go beyond 30 days, and for other customers a period over 60 days can be challenged if it's grossly unfair to you.
When can I start charging interest? From the day after the payment deadline, at 8% above the Bank of England base rate. You don't need a clause in your contract for this.
How much interest can I charge on a late invoice? 11.75% a year while the base rate is 3.75%, as simple interest for each day late, plus fixed compensation of £40, £70 or £100 per invoice.
Do these rules apply to consumers? No. The 30-day default, statutory interest and fixed compensation apply only to debts between businesses, including the public sector.
Sources
- legislation.gov.uk - Late Payment of Commercial Debts (Interest) Act 1998, section 4 (accurate as of October 2026) https://www.legislation.gov.uk/ukpga/1998/20/section/4
- GOV.UK - Late commercial payments: charging interest on commercial debt (accurate as of October 2026) https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt
- GOV.UK - Late commercial payments: claim debt recovery costs (accurate as of October 2026) https://www.gov.uk/late-commercial-payments-interest-debt-recovery/claim-debt-recovery-costs
- Department for Business and Trade - Late payments research: impact on the UK economy (accurate as of October 2026) https://assets.publishing.service.gov.uk/media/688a089a6478525675738ff9/late_payments_research_impact_on_uk_economy.pdf
- UK Parliament - Commercial Payments Bill [HL] (accurate as of October 2026) https://bills.parliament.uk/bills/4128
- Adfin - Pricing (accurate as of October 2026) https://www.adfin.com/pricing
