Do You Have Any Invoice Debt?

Image: Ricardo Gomez Angel/ripato/Unsplash
Image: Ricardo Gomez Angel/ripato/Unsplash

If your business has an outstanding and overdue invoice owing by another business, you are entitled to seek payment of the invoice along with interest and debt recovery costs.  The relevant legislation: The Late Payment of Commercial Debts (Interest) Act 1998.   

What is an overdue invoice?

Unless you have agreed payment terms, an invoice is overdue 30 days after

  • the customer receives the invoice; or
  • you delivered the goods and/or provided the service

What interest can be claimed?

For business-to-business transactions, you can claim statutory interest which is 8% plus the Bank of England Base Rate.

If you have a contractual entitlement to interest, then the contractual rate of interest will apply.

Late Payment Compensation

You can also charge the business a fixed sum for the costs of recovering an overdue invoice. This is known as Late Payment Compensation. Each invoice entitles you to one charge. The amount you can claim depends on the amount of the outstanding invoice.

Invoice Amount                                             Compensation Charge

Up to £999.99                                                £40.00

£1,000.00 – £9,999.99                                    £70.00

£10,000.00 or more                                       £100.00

Will it proceed to Court?

More often than not, a business is prompted to make payment upon receipt of a “Letter Before Action”.  In the event an invoice remains outstanding, you are at liberty to issue Court proceedings to bring a money claim against the Company.

Will I recover legal costs?

We will always seek to add your legal costs to the company’s liabilities and recover wherever possible. The prospects of recovering legal costs are higher if you have a contractual entitlement to legal costs within your terms and conditions.

By virtue of the Late Payments Directive 2011, the Act was updated to include provision for a creditor claiming its reasonable costs’ if the costs are not covered by the compensation element.  Following the directive, section 5A(2A) of the Late Payment Act provides as follows:

“If the reasonable costs of the supplier in recovering the debt are not met by the fixed sum, the supplier shall also be entitled to a sum equivalent to the difference between the fixed sum and those costs.”

Will I get paid?

We understand that your aim is to get paid. Whilst we can make no guarantees that you will make a full recovery, we will never encourage you to throw good money after bad. We base our advice on the specifics of each case and always take into account commerciality before advising you.

Need our help?

Please email us at or contact us on 0333 200 5212.

Gemma Hackett, Senior Associate Solicitor

Greenhalgh Kerr
Olympic House, Beecham Court,
Smithy Brook Rd,
Wigan WN3 6PR

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+44 (0)333 200 5200

We are confident in our work and we know that recoveries is a key part of a lender or creditor’s business

We are confident in our work and we know that recoveries is a key part of a lender or creditor’s business. We have designed our pilot projects to give lenders and creditors the comfort and confidence in our service before formally and fully switching recoveries providers. This time also allows new clients to benchmark our service levers and results against existing providers and others.

How it works


You choose 10 recoveries cases

You choose 10 recoveries cases to get us started. We’ll deliver our usual onboarding protocol where we’ll get to know you and your systems, culture, methods, preferences, and requirements.


We get started

We assess each case by setting a strategy then grading and reporting on the case in terms of prospects and timescales and cost. We make immediate contact with debtors, and pursue a recovery in our tried and tested ways.


We review

We deliver ongoing, structured, tailored reports as per your needs and carry out a full 3-month review on these 20 cases. There we’ll discuss how we have worked together, patterns we have seen in your borrowers, your systems, your documents, your pre-legal conduct, outcomes, highs and lows, legal costs (and costs borne by debtors), and possible improvements in all of these.


No strings

We carry on working in this way until all cases have been concluded. You are then free to carry on your discussions with us or to use the experience and market intelligence gained by working with us in the future.

Lenders and creditors have nothing to lose, and everything to gain, by engaging with us on a pilot project.