Late Payment Legislation

Late Payment Legislation

Irrespective of what your terms and conditions of business provide for, you are entitled to charge Late Payment Interest and Compensation under The Late Payment of Commercial Debts (Interest) Act 1998.

In November 1998, the UK Government introduced the long overdue legislation to give businesses a statutory right to claim interest from other businesses for the late payment of commercial debt. The UK was one of the first countries in the EU to introduce late payment legislation to help promote a culture of prompt payment.


The Act was amended by the Late Payment of Commercial Debt Regulations 2002 so that “reasonable debt recovery” costs can be recovered from your debtor with effect from 7 August 2002 in addition to interest as defined below.

Size of unpaid debt
Sum to be paid to the creditor (``Compensation)
Up to £999.99
£1,000.00 to £9,999.99
£10,000.00 or more

The revisions to the legislation also include the simplification of the calculation of statutory interest. A reference rate is now used to determine the late payment interest rate, which is fixed for a six month period. The late payment interest rate that applies in the UK is the reference rate plus 8%. The new fixed reference periods are:

The six month period
The Bank of England base rate on 31st December will be the reference rate for:
1st January to 30th June
The Bank of England base rate on 30th June will be the reference rate for:
1st July to 31st December
Reference Rate
Interest Rate (Reference rate plus 8%)
1st July – 31st December 20120.5%8.5%


If you use Veritas Legal to recover your debts under this Act, then you will enjoy FREE debt recovery. Even if you do not, our rates are still extremely competitive.

Tired of making endless phone calls to get your cash? Now you need to make just one…


01392 498686

Help & Advice

ZERO cost, stress free, professional, ethical and efficient. Veritas Legal Services

Veritas Legal UK debt recovery is much more than a debt collection agency.

percent of cases recovered in 7 days


percent professional, ethical and efficient.


The debtor pays our fees under The Late Payment of Commercial Debts (Interest) Act 1998

We’re proud of our customer service and our record of achieving results quickly, efficiently and at zero cost to you.

Request a call back

    Specialists in Debt recovery services, serving clients in Devon, the South West and throughout the UK.