Compensation
This can be claimed for any invoice that is not paid within the credit period, even if it has now been paid. Businesses have up to six years to claim the compensation, which amounts to £40 for debts of under £1,000, £70 for debts between £1,000 and £10,000, and £100 if the amount owed is £10,000 or more.

Late payment interest
The late payment interest rate is eight per cent above the Bank of England base rate, and is set at the end of the preceding June and December.

Ability to claim
You can claim late payment and compensation if you have supplied goods and services for business purposes – it does not apply to consumer credit agreements. It cannot be charged if the contract already contains a provision for interest on overdue invoices, or any other substantial remedy for non-payment.

What do I need to do?
Though you are entitled to claim late payment interest and compensation without warning customers you intend to do so, it is good practice to update all documents on which terms and conditions appear and circulate the revised terms and conditions to customers, advising them when they will come into effect.

See also: Open banking could be the late payment solution for businesses