Interest rates and legal figures checked on 11 November 2026. The statutory rate changes every six months.
You did the job, sent the invoice, and the due date has come and gone. Chasing feels awkward, so it slides, and two months later you’re owed money you’ve already spent in your head. This guide gives you a simple chasing timeline, three emails you can copy, and an honest explanation of what UK law lets you add on, which depends on who your customer is.
On this page
First: is your customer a business or a homeowner?
This changes what you’re allowed to charge for paying late.
- Business customers (companies, sole traders, landlords buying for their letting business, public bodies): the Late Payment of Commercial Debts (Interest) Act 1998 gives you a legal right to interest and a fixed compensation sum, even if your terms never mentioned it.
- Homeowners and other consumers: that Act doesn’t apply. You can only charge interest or late fees if they were in terms the customer agreed to before the work, and those terms have to be fair.
A chasing timeline that works
Most late payers aren’t refusing. They forgot, the invoice went to the wrong inbox, or someone else has to approve it. A consistent sequence sorts out most of them before it gets unpleasant.
| When | What to send | Tone |
|---|---|---|
| 3 days before due | Optional heads-up with the invoice attached again | Helpful |
| Day after due date | Friendly reminder (Email 1) | Assume it’s an oversight |
| 7 days overdue | Second reminder, then phone them | Polite, direct |
| 14 days overdue | Firm reminder (Email 2), mention your rights | Businesslike |
| 30 days overdue | Final notice (Email 3) with a deadline | Formal |
| After the deadline | Letter of claim, then small claims if needed | Formal, in writing |
Two rules make this work. Always attach the invoice and your bank details, so paying takes one minute. And if the customer says something is wrong with the work, stop chasing and talk to them. A dispute needs a conversation, not reminder number four.
Three emails you can copy
Email 1: friendly reminder
Subject: Invoice [number] for [job], now due
Hi [name],
Just a quick reminder that invoice [number] for £[amount] was due on [date]. I’ve attached it again in case it went astray.
You can pay by bank transfer to [account name], sort code [00-00-00], account [00000000], using [number] as the reference.
If it’s already on its way, thank you and please ignore this.
[Your name]
Email 2: firm reminder (14 days overdue)
Subject: Overdue: invoice [number], £[amount]
Hi [name],
Invoice [number] for £[amount] is now 14 days overdue. I tried calling on [date] but couldn’t get through.
Please could you arrange payment by [date, 7 days away] or let me know if there’s a problem with the invoice.
[Business customers only:] As a business-to-business invoice, late payment interest and fixed compensation can be claimed under the Late Payment of Commercial Debts (Interest) Act 1998. I’d rather not need to, so a quick payment or a call would be appreciated.
[Your name]
Email 3: final notice (30 days overdue)
Subject: Final notice: invoice [number]
Dear [name],
Invoice [number] for £[amount] was due on [date] and remains unpaid despite reminders on [dates].
Please pay in full by [date]. If I don’t receive payment or hear from you by then, I’ll start the formal process to recover the debt, which may include a claim through the courts.
[Business customers:] I’m also entitled to claim statutory interest, currently £[daily amount] a day, and fixed compensation of £[40/70/100].
[Your name]
If you don’t want to write these from scratch each time, the free invoice reminder writer drafts the first two for you to edit and send yourself.
Statutory interest and compensation for business customers
The interest rate
Statutory interest is 8% a year plus the Bank of England reference rate. The reference rate is fixed in six-month blocks, and this is the part most online calculators get wrong:
- for invoices that became overdue between 1 January and 30 June, use the base rate on the previous 31 December
- for invoices that became overdue between 1 July and 31 December, use the base rate on 30 June
The base rate was 3.75% on 30 June 2026, so an invoice that became overdue between 1 July and 31 December 2026 carries interest at 11.75% a year. The Bank of England raised the base rate to 4% on 5 November 2026, but that doesn’t change the rate for this period. Invoices that become overdue from 1 January 2027 will use whatever the base rate is on 31 December 2026.
How to calculate it
It’s simple interest, worked out daily on the amount owed, including VAT:
Interest = amount owed × annual rate × days overdue ÷ 365
Example: a £2,400 invoice that’s 45 days overdue at 11.75% earns £2,400 × 0.1175 × 45 ÷ 365 = £34.77. That’s about 77p a day.
If no payment date was agreed, the law treats payment as due 30 days after the customer received the invoice or the work, whichever is later.
Fixed compensation
Once interest starts running, you can also claim a fixed sum per overdue invoice to cover the cost of chasing:
| Amount owed | 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, you can claim the difference. In the example above, you could ask for the £2,400 plus £34.77 interest plus £70 compensation.
Should you? With a good customer who’s simply slow, mentioning your right to interest often does the job without actually charging it. With a customer who keeps paying late, charge it. The law exists for exactly that.
If your customer is a homeowner
The statutory interest rules don’t apply, so your terms matter. If they said nothing about late payment, you can still chase and ultimately claim the debt itself.
Before going to court against an individual (including a sole trader), the courts expect you to follow the Pre-Action Protocol for Debt Claims: send a letter of claim with the information it requires and give them 30 days to reply. Skipping that step can count against you. For amounts up to £10,000 in England and Wales, the small claims track keeps costs down, and you can start a claim online through GOV.UK. If the customer disputes the quality of the work rather than just not paying, it’s worth getting advice first.
Stop it happening next time
- Agree terms before you start. Payment due date, how to pay, and what happens if payment is late. Put it on the quote.
- Take a deposit on bigger jobs. Especially where you’re buying materials up front.
- Invoice the same day. The longer the gap after the job, the lower it sits on the customer’s list.
- Make paying easy. Bank details on every invoice, or a payment link.
- Chase on a schedule, not on a feeling. The timeline above only works if it happens every time, not just when you remember.
Chasing invoices every week?
Payment Chaser is a simple tool I’m building to track what’s due, draft reminders for you to approve, and flag the invoices that need a phone call instead. It’s in early access, planned at under £20 a month. Tell me how you invoice today and you’ll help shape it.
Sources: Late Payment of Commercial Debts (Interest) Act 1998 and the 2002 and 2013 Regulations; Office of the Small Business Commissioner interest guidance; Bank of England Monetary Policy Summary, November 2026; Pre-Action Protocol for Debt Claims. This is general information, not legal advice. For a large or disputed debt, speak to a solicitor or a debt recovery specialist.