Last checked October 2026 · by the PaySorted team
The short answer
If your client is a business (including a charity or public body), you can claim interest at 8% a year above the Bank of England base rate on a late invoice, plus £40, £70 or £100 compensation. It's set out in the Late Payment of Commercial Debts (Interest) Act 1998 and covers freelancers and sole traders as well as companies. It doesn't cover private individuals.
Stop it happening in the first place
Most late payments from bigger clients aren't deliberate: the invoice is stuck somewhere. These steps fix most of it before you start work:
- Get set up as a supplier early. Large companies often need a supplier form, bank details check and sometimes a code of conduct signed before they can pay you. Ask for it on day one, not when you send the invoice.
- Ask for a purchase order (PO) number and put it on every invoice. Many accounts teams reject invoices without one, and nobody tells you.
- Send invoices to the accounts payable inbox, not just your contact, and ask which day their payment runs happen.
- Agree payment terms in writing (14 or 30 days), and say on your invoice that statutory interest applies to late payment.
- Take a deposit on fixed-price projects, and invoice in stages so you're never owed the whole fee.
When an invoice counts as late
It's late the day after the payment date you agreed. If you never agreed one, the law sets a default of 30 days from when the client got the invoice or the work was done, whichever is later. Business payment terms longer than 60 days only stand if they were expressly agreed and aren't grossly unfair to you, and public bodies must normally pay within 30 days.
What you can claim
Interest: 8% a year plus the base rate on 31 December (if interest starts January to June) or 30 June (if it starts July to December). The base rate was 3.75% on 30 June 2026, so the rate is 11.75% for late payments starting July to December 2026. It's simple interest, counted daily.
| Invoice amount | Fixed compensation |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
You can claim the compensation once for each late invoice, and reasonable extra costs of recovering the debt on top if they're higher.
A freelancer's example
You invoice a client £2,400 for a website stage, due on 1 September 2026. They pay on 31 October, 60 days late.
- Interest: £2,400 × 11.75% × 60 ÷ 365 = £46.36
- Compensation (£1,000 to £9,999.99): £70
- Total you can claim: £116.36
Check your own figures with our free late payment interest calculator.
How to claim it
- Send a polite reminder first: a missing PO or a wrong email address is the usual cause.
- If it's still unpaid, tell the client in writing that statutory interest and compensation are now due, and how much.
- Send it as its own invoice, so it's easy for their accounts team to process.
- If they still don't pay, a letter before action is the next step before the small claims court.
PaySorted Freelance does this for you. It chases late invoices with Friendly, Professional and Firm reminders, works out the interest and compensation on every overdue invoice from a business client, and sends the claim as its own invoice in one tap. See PaySorted Freelance.
General information based on GOV.UK guidance (checked October 2026), not legal advice. Check the current base rate on the Bank of England website.
Common questions
Can freelancers charge late payment interest?
Yes, if the client is a business, charity or public body. The Late Payment of Commercial Debts (Interest) Act covers freelancers and sole traders just like companies. It does not cover private individuals.
How much can a freelancer claim for a late invoice?
Interest at 8% a year above the Bank of England base rate (11.75% where interest starts July to December 2026), plus a fixed £40, £70 or £100 depending on the size of the invoice.
Can a client make me wait 90 days to be paid?
Only if you expressly agreed to it and it isn't grossly unfair to you. Business payment terms over 60 days are restricted by law, and public bodies must normally pay within 30 days.
Will claiming interest damage the relationship?
It can, so many freelancers mention it in their terms and use it as a last resort. Simply putting it on your invoices often makes clients pay on time.