General legal information about contract terms in the UK, not legal advice.
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Statutory interest on late payment

Under the Late Payment of Commercial Debts (Interest) Act 1998, businesses can claim interest on late commercial payments at 8% above the Bank of England base rate, plus fixed compensation.

Prepared by a retired English qualified solicitor (LLB, LLM) · reviewed · applies across the UK unless stated · how we draft

In more detail

The contract can set its own rate if it is a substantial remedy for late payment.

In Scotland

The Act applies in Scotland.

Put it into a contract

Be Contract Wise provides very powerful, carefully prepared tools to draft and review simple or complex contracts under the law of England and Wales or Scots law, explaining every clause in plain English.

England & Wales appScotland app

Reviewed 2026-09-24. General legal information, not legal advice.