What Interest can I Charge on Late Invoices

Claiming interest on invoices which are paid late or remain unpaid is not only an effective method of minimising delays on payment, but it also offers an element of compensation to you. The latter reflects that had you been paid on time, then you could have reinvested the money that is owed to you or earned interest on it. In this article we look at the three most common types of interest that you might be entitled to claim from a debtor.


Initially, you should look to your existing contract and see what contractual terms have been agreed with your customer. As well as having terms allowing you to claim interest, you may well have contractual entitlements to other losses, such as legal fees or reasonable costs.

Our Debt-Claims portal allows you to claim interest under your contract and offers a flexible calculator where you can enter the interest rate and any contractual costs owed to work out the total due to you.

If your current terms and conditions do not contain provisions for you to claim interest, then talk to us today to see how we can review these and amend/redraft if necessary.

Late Payment of Commercial Debts (Interest) Act 1998

If the contract between you and your customer is commercial (i.e. you were both acting in the course of business) and is for goods or services sold or provided (including hired goods) then you can likely claim interest under the Late Payment of Commercial Debts (Interest) Act 1998 (often referred to as the Late Payment Act).

Under the Late Payment Act, a creditor is entitled to interest at 8.0% per annum above the Bank of England base rate, interest is calculated daily. Additionally, the creditor is entitled to compensation and reasonable costs. For further information, check out our guide to the Late Payment Act [link this to new article about Late Payment of Commercial Debts (Interest) Act 1998].

County Courts Act 1998

Under Section 69 of the County Courts Act 1998, there is a general prerogative for a claimant or creditor to claim interest at 8.0% per annum on the balance owed to them. Interest under this Act is claimable from the date that the cause of action arose (i.e. the payment due date) and most claim types attract interest.

The above summarises the three main heads under which a claimant can claim interest. There are however, other acts of parliament that provide a legal basis for interest – such as interest on certain judgments.

When sending letters or issuing court proceedings through Debt-Claims, you can choose to claim where appropriate. Our software determines which heads of interest are claimable in your circumstances and lists the same, enabling you to compare which offers the most favourable rate.

If you are owed money then the first step is to send a letter before action; you can instruct us and draft a letter before action within a few moments directly from our portal for as little as £12.50. Unlike many other solicitors practices, we operate a fixed-fee costs schedule, meaning that we do not charge any commission on successful debts paid and you also keep all interest and compensatory sums recovered.

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