Late payments: using the Late Payment Act without losing clients

Freelancers live closer to late payment than anyone: one slow client and the month's cash flow is gone. The UK's Late Payment of Commercial Debts Act gives you real rights, interest at 8 percent over the Bank of England base rate plus fixed compensation per invoice. The trick is using those rights as leverage without torching the relationship.

Freelancer sending an invoice and tracking payment

Know exactly what the law gives you

Unless your contract sets different terms, payment is legally due 30 days after performance or invoice, whichever is later. After that you can claim interest and a fixed sum per qualifying debt: £40 up to £1,000, £70 up to £10,000, £100 above. You can also claim reasonable debt-recovery costs. These are statutory rights; a contract cannot sign them away.

Put it in your terms before you need it

Rights you never mention are rights nobody respects. State your payment terms, the 30-day default, and your right to statutory interest in every proposal and contract. Most clients never read it closely, but the ones who pay slowly do, and it frames every later conversation.

Escalate in writing, in stages

Stage one is the friendly nudge the day after the due date; stage two, a week later, mentions the statutory interest now accruing; stage three is a formal letter before action. Each stage is polite, factual, and in writing. The vast majority of late payers settle at stage two, because accruing interest turns your invoice from ignorable into expensive.

Protect the relationship while you chase

Chasing is business, not personal, and good clients know it. Keep the tone professional, separate the money conversation from the work conversation, and never apologise for asking to be paid. The clients worth keeping respect a freelancer with proper credit control; the ones who leave over a polite chase were never good clients.

Build the system so it rarely happens

Deposits for new clients, milestone billing on longer projects, and direct debit for retainers all shrink the problem at source. And keep the ledger clean: when every invoice, reminder, and payment is tracked, nothing slips. Many freelancers outsource accounts receivable chasing entirely; Finex Outsourcing runs the credit-control routine for UK freelancers and small firms so late payers meet a process, not a plea.




 

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