Invoice Recovery & Late Payment Tools for UK Businesses
The UK has some of the strongest B2B late payment protections in the world. Under the Late Payment of Commercial Debts Act 1998, you are entitled to statutory interest at 8% above the Bank of England base rate, plus fixed recovery costs of £40–£100 — automatically, without needing it in your contract. These free tools and this guide help you exercise those rights.
Your Rights Under UK Late Payment Law
The Late Payment of Commercial Debts (Interest) Act 1998 (LPCD Act) gives UK businesses automatic rights when a B2B invoice goes unpaid beyond the agreed or default payment period. Here is what you are entitled to:
Statutory Interest Rate
The statutory interest rate is 8% per year above the Bank of England base rate. This is calculated as simple interest (not compound) from the day after payment was due. Example: if the base rate is 4.75%, your statutory rate is 12.75% per year, or approximately 1.06% per month. Use the UK Statutory Interest Calculator to get the exact figure.
Fixed Debt Recovery Costs
On top of interest, you can claim a fixed compensation amount for the cost of recovering the debt:
Under £1,000
£40
£1,000 – £9,999
£70
£10,000+
£100
If your actual recovery costs exceed these amounts (e.g. solicitor letters), you can claim the difference as “reasonable costs.”
Default 30-Day Payment Term
If your contract does not specify a payment term, the LPCD Act applies a 30-day default. For public authority contracts, the default is also 30 days. Contracts can specify up to 60 days (for B2B), but terms beyond 60 days are only enforceable if they are fair and reasonable to both parties.
When the Act Applies
- Both parties must be acting in the course of a business (B2B only — not B2C)
- The contract must be for the supply of goods or services
- The contract must be governed by UK law
- It applies even if your contract does not mention late payment interest
- Consumer transactions (B2C) are excluded
Free Tools for UK Invoice Recovery
All tools are free, no signup required, and built specifically for UK and international invoice recovery.
UK Statutory Interest Calculator
Calculate the exact interest and fixed compensation you can claim under the LPCD Act 1998. Auto-applies Bank of England base rate + 8%.
Late Fee Calculator
Calculate late payment fees using monthly %, annual %, or flat fee rates. Useful for contractual late fee clauses.
Payment Reminder Email Generator
Generate professional UK-appropriate payment reminders in 5 tones — from friendly nudge to final notice before legal action.
Invoice Follow-Up Schedule Planner
Build a complete chase timeline from your invoice due date. Outputs dates for each escalation step.
UK Invoice Recovery Timeline
A step-by-step approach to escalating an unpaid invoice in the UK, from first reminder to Money Claim Online.
Send a polite first reminder
Assume the oversight is accidental. Reference the invoice number, amount, and due date. Keep it brief.
Follow-up with firm reminder
Mention that the invoice remains unpaid. Include a copy of the invoice. Note your payment terms.
Reference late payment interest
Inform the client that statutory interest is accruing under the Late Payment of Commercial Debts Act 1998 at 8% + Bank of England base rate.
Send formal letter before action
This is a pre-action letter. State the full amount due including statutory interest and fixed recovery costs. Give 7 days to pay before legal action.
File Money Claim Online (MCOL)
If no response, file a claim at www.moneyclaim.gov.uk for invoices up to £10,000 (small claims track) or up to £25,000 (fast track).
Consider debt collection agency or solicitor
If the claim is defended, consider engaging a solicitor. For sub-£10k claims, small claims court costs are capped so you can represent yourself.
Taking an Unpaid Invoice to Small Claims Court in the UK
In England and Wales, the small claims track handles disputes up to £10,000. Claims between £10,000 and £25,000 go to the fast track. Scotland and Northern Ireland have separate systems (Sheriff Court and Magistrates' Court respectively).
How to File — Money Claim Online
- 1Go to Money Claim Online (MCOL) and create an account
- 2Enter the defendant's full name and address
- 3Describe the claim (unpaid invoice for services/goods)
- 4Enter the amount including statutory interest and costs
- 5Pay the filing fee (from ~£35 to £455 for sub-£10k claims)
- 6The defendant has 14 days to respond
- 7If they ignore it, apply for a default judgment
Evidence You Need
- Signed contract or written agreement (email is acceptable)
- Original invoice(s) with payment terms visible
- Proof of work delivered (emails, delivery confirmation, timesheets)
- Chase history — emails, WhatsApp, call notes
- Any promises to pay (emails, texts)
- Bank statements showing non-payment
Scotland: Use Simple Procedure at the Sheriff Court for claims up to £5,000. Northern Ireland: Use the Magistrates' Court (Small Claims) for claims up to £3,000.
Filing Fees (England & Wales, 2026)
| Claim Amount | Online Fee |
|---|---|
| Under £300 | £35 |
| £300 – £500 | £50 |
| £500 – £1,000 | £70 |
| £1,000 – £1,500 | £80 |
| £1,500 – £3,000 | £115 |
| £3,000 – £5,000 | £205 |
| £5,000 – £10,000 | £455 |
Fees are recoverable from the defendant if you win. Check gov.uk for the latest fee schedule as fees are updated periodically.
Frequently Asked Questions — UK Late Payment
What is the statutory interest rate for late invoices in the UK?+
Under the Late Payment of Commercial Debts Act 1998, the statutory interest rate is 8% per year above the Bank of England base rate. As of 2026, with the base rate at approximately 4.75%, the statutory rate is around 12.75% per year. This applies automatically to qualifying B2B invoices even if your contract does not mention it.
Do I have to include a late payment clause in my contract to charge interest in the UK?+
No. The LPCD Act 1998 means statutory interest applies automatically to qualifying B2B transactions. However, your contract can override this with a higher or lower 'substantial remedy.' If your contract sets a rate that provides a substantial remedy for the creditor, it replaces the statutory rate. If it does not, the statutory rate applies.
What are the fixed recovery costs under UK late payment law?+
Under the Late Payment of Commercial Debts (Interest) Act 1998 (as amended), you can claim fixed debt recovery costs on top of interest: £40 for invoices under £1,000, £70 for invoices between £1,000 and £9,999.99, and £100 for invoices of £10,000 or more. You can claim more if your reasonable recovery costs exceed these amounts.
How do I take a client to the small claims court in England and Wales for an unpaid invoice?+
Use the government's Money Claim Online service (MCOL) at www.moneyclaim.gov.uk. Claims up to £10,000 go to the small claims track. You'll need the defendant's full name and address, the amount owed, and evidence (invoices, emails, contract). The filing fee starts at around £35 for claims under £300, rising to £455 for claims up to £10,000. Most hearings are resolved within 3–6 months.
Does the Late Payment of Commercial Debts Act apply to sole traders and freelancers?+
Yes. The LPCD Act applies to any B2B transaction — including contracts where a sole trader or freelancer supplies goods or services to a business client. It does not apply to B2C (business to consumer) transactions. If your client is an individual consumer rather than a business, different rules apply.
Track Every Invoice. Chase Every Payment.
InvoiceGrid is a Kanban-style invoice tracker built for UK freelancers and small businesses. Log your invoices, track overdue days, generate reminder emails in the right tone, and keep a full chase history — so you have everything you need if you need to escalate.
- ✓Know exactly which invoices are overdue today
- ✓Auto-generate UK-appropriate reminder emails at each stage
- ✓Full chase log per invoice — essential evidence for MCOL claims
Also useful: UK Statutory Interest Calculator · UK overdue invoice letter template · Freelancer late payment guide · Small claims court guide · Payment reminder email generator