UK freelancers: you are probably owed money right now and do not know it

There is a law most UK freelancers have never heard of that lets you charge interest on late invoices automatically.

It is called the Late Payment of Commercial Debts Act 1998.

Under it, you can charge:

• 8% + Bank of England base rate interest per year (currently ~12.5%)
• Fixed compensation: £40 for debts under £1,000, £70 for £1,000–£9,999, £100 for £10,000+

No court. No solicitor. Just reference it in a follow-up email.

Why most freelancers never use this

Because they do not know it exists. And because it feels confrontational.

Here is the thing: you do not have to actually charge the interest. Just mentioning that you are entitled to under the Act is usually enough to get paid. Clients know what it means. It signals you know your rights.

How to use it in practice

Step 1. Calculate what you are owed. Use this free calculator — it does the maths automatically: Late Payment Interest Calculator

Step 2. Send a formal follow-up that includes the following line:

"Please note that under the Late Payment of Commercial Debts Act 1998, I am entitled to charge statutory interest at 8% above the Bank of England base rate, plus £[X] compensation. I would prefer to resolve this without escalation."

Step 3. Wait 7 days. In my experience, 80%+ of chronically late clients pay within that window.

What about smaller amounts?

Even for a £500 invoice that is 30 days late, the interest is roughly £5. Not worth the hassle on its own — but combined with the £40 fixed compensation, you can legitimately add £45 to the outstanding amount.

More importantly: the formal tone changes behaviour. A lot of late payers are just disorganised. Seeing the Act referenced in writing makes your invoice the one that gets paid first.

Prevention is better than cure

If you want to avoid this entirely:

• Put payment terms in writing before the project starts
• Reference your late payment rights in your contract
• Invoice the day work is delivered, not when you get round to it
• Have a scripted follow-up sequence: day 0, 7, 14, 30

I put together a Getting Paid Toolkit (£19) with contract clauses, email templates for each follow-up stage, and a system you can run without it feeling awkward. Free tools here if you just want the calculators.

Running a freelance business in the UK is hard enough without leaving legitimate money uncollected. Know your rights.