A late invoice is worth 11.75% interest, if you ask for it

The Bank of England base rate has been 3.75% since 18 December 2025, which puts statutory interest on a late commercial debt at 11.75% a year. Most self-employed clinicians never charge it, and a fair number do not know it exists. A Bill introduced to Parliament on 19 May 2026 would go further, capping payment terms at 60 days and letting the Small Business Commissioner fine habitual late payers.

What the 1998 Act already gives you

Under the Late Payment of Commercial Debts (Interest) Act 1998, a business that is paid late by another business can charge interest at 8% above the Bank of England base rate. A self-employed locum invoicing a practice, a trust, an agency or a private clinic is in a business-to-business transaction, whatever the day feels like from the consulting room. Base rate fell to 3.75% on 18 December 2025 from 4.00%, so the statutory rate today is 11.75%.

On top of the interest there is a fixed sum for the cost of recovering the debt. It steps with the size of the invoice: £40 for a debt under £1,000, £70 from £1,000 up to £10,000, and £100 at £10,000 or more. The fixed sum attaches to the debt, not to the number of emails you send about it.

These are not large numbers on a single invoice, and they are not designed to be. Interest on a £1,200 invoice runs at roughly 39p a day. The value of the mechanism is not the cash. It is that it turns a chasing email from a complaint into a statement of fact with a figure attached.

The contract can switch the statutory rate off

One condition does most of the damage in practice. GOV.UK's guidance is clear that you cannot claim statutory interest where the contract sets a different rate of interest. Agency terms of engagement, framework paperwork and the standard terms a private clinic sends over are all capable of doing that, in a clause nobody reads at signing.

So the first document to open is not the invoice, it is the engagement you agreed to. If it sets its own late payment rate, that rate is what you have. If it is silent, the statutory position stands behind you.

What the Bill in Parliament would change

The Small Business Protections (Late Payments) Bill was announced in the King's Speech on 13 May 2026 and introduced to Parliament on 19 May 2026. The Department for Business and Trade called it the "largest crackdown on late payments in over 25 years". The measures, as set out in that announcement, are:

• a 60-day cap on payment terms where large firms buy from smaller suppliers
• mandatory interest at 8% above base rate, rather than a right the supplier has to assert
• new powers for the Small Business Commissioner to investigate, adjudicate and fine persistent late payers, with penalties potentially running to tens of millions
• audit committees at large companies that pay late repeatedly must publish an explanation
• a ban on withholding retentions in construction

Analysis from KPMG and ICAEW adds that where a contract has no payment term, or one the Bill makes void, a 30-day term would be implied, and that the reforms are expected in force in 2027 if the Bill passes. The government puts the cost of late payment to the UK economy at £11 billion a year, and says around 38 businesses close every day over money they are owed and never receive. The Commons debated late payment and small businesses again on 2 July 2026.

None of this is law yet, and a Bill in autumn 2026 is not a payment in autumn 2026. The rights you already have are the ones worth using this month.

The NHS already commits to 30 days, unevenly

NHS trusts sign up to the Better Payment Practice Code, which asks them to pay undisputed invoices by the due date or within 30 days of receiving the goods or a valid invoice, whichever is later, with a 95% target. Trusts publish their performance, and it varies. One trust's July 2026 figures came in at roughly 90.3% by value and 95.8% by number, which is to say the larger invoices were the late ones.

Two words in that code do a lot of work: undisputed, and valid. An invoice missing a purchase order number, a cost centre, the department that booked you, or a dated breakdown of sessions is the easiest thing in the world for a finance team to park. A parked invoice is not a late invoice, in their system, because the clock has arguably not started. Getting the reference right at the point of issue is worth more than any amount of chasing afterwards.

A chasing sequence that does not cost you the booking

The awkwardness for a locum is that the person who books you is rarely the person who pays you. A rota coordinator or practice manager wants you back next month. Finance has a queue. Chasing the first person about the second person's queue is how good relationships get strained over £1,200.

A sequence that works looks roughly like this. Invoice on the day the work ends, with the dates, sessions, rate, total, payment details, any reference the payer uses, and the payment term in words. At day 14, a short reminder with no tone in it: invoice number, amount, due date, and an offer to resend anything missing. At day 21, the same again, copied to whoever booked you, so the person who wants you back knows the money has not arrived. At day 28, note that statutory interest at 11.75% and the fixed recovery sum will apply from the due date, with the figures spelled out. After that date, send a revised statement that includes them.

If you would rather not hold that calendar in your head, Sessional's invoices chase on their own at days 14, 21 and 28, described in the automatic chasers guide.

What to do with your next overdue invoice

1. Read the engagement terms before the invoice. A contractual interest rate displaces the statutory one.
2. Confirm the invoice is valid and undisputed on the payer's terms: reference, dates, rate, breakdown. Fix that before escalating anything.
3. Work out the figure rather than gesturing at it. Daily interest is the invoice value multiplied by 0.1175 and divided by 365. Add £40, £70 or £100 by band.
4. Decide, per payer, whether to charge it or to hold the right in reserve and say so. A locum GP covering one practice most weeks and a physiotherapist invoicing twenty private clients a month are not in the same position.
5. Recognise the point where this stops being an administrative delay. A payer who disputes the debt or goes quiet after a formal notice is a matter for a solicitor or the small claims route, not a fifth email. This article is not legal advice, and your own contract is a question for a solicitor.
6. Keep the evidence as you go: the dated invoice, proof of sending, and every chaser. If it goes further, that file is the case.

The rights have been on the statute book since 1998. What has changed in 2026 is the rate they pay, and the fact that Parliament is now arguing about whether asserting them should be the supplier's job at all.

Sources

• Late commercial payments: charging interest on a commercial debt (GOV.UK, undated guidance)
• Official Bank Rate history (Bank of England, current to 11 September 2026)
• Largest crackdown on late payments in over 25 years as landmark Bill enters Parliament (Department for Business and Trade via GOV.UK, 19 May 2026)
• Late Payment of Commercial Debts (Interest) Act 1998: the rate of statutory interest (Penningtons Manches Cooper, undated)
• Small Business Protections (Late Payments) Bill (KPMG UK, undated)
• UK government ploughs ahead with late payments Bill (ICAEW, May 2026)
• Late payment: small businesses, Commons debate (Hansard, 2 July 2026)
• Payments to suppliers (NHS England, undated publication)