There’s a number that should sit on every trade business owner’s wall: £11 billion. That’s what late payment costs the UK economy every year, according to Small Business Commissioner research by London Economics.
Behind it: roughly 14,000 business closures a year, about £26bn outstanding at any point, and an average of £17,000 owed per affected business.
In construction the picture is worse than average — payment delays run to about 38 days past terms (Coface UK payment survey data).
If you’ve ever finished a boiler install in week one and seen the money in week seven, you’re living inside that statistic.
The part most owners don’t know: the law already pays you
The Late Payment of Commercial Debts (Interest) Act 1998 gives you two automatic rights on overdue B2B invoices — no contract clause needed:
- Statutory interest at 8% + Bank of England base rate on the overdue amount, accruing daily.
- Fixed compensation per invoice: £40 on debts under £1,000, £70 under £10,000, £100 at £10,000+.
On a £2,400 invoice 45 days late, that’s about £35 of interest plus £70 compensation. Over £100 you’re legally owed — and almost certainly never claimed.
Across a year of chasing, it adds up to real money that belongs to you.
The hidden cost isn’t the money — it’s the hours
Of the UK businesses surveyed, 22% spend staff time chasing late payment. The average is 86 hours a year per business affected (SBC/London Economics). That’s two working weeks of your life spent sending “just checking in” emails — time that prices out at thousands in lost work or lost evenings.
The uncomfortable truth: chasing works, but it works because someone does it consistently. Polite, scheduled, escalating reminders — sent on day 1, 7, 14 — recover most overdue invoices before they become disputes.
The problem is never knowing this. It’s having the hours to run it while you’re on the tools.
Run your own number
Our late-payment calculator does the full maths on your invoices. Chasing hours per year, the cash-flow drag, and the statutory interest + compensation you’re entitled to under the 1998 Act. Your numbers, not industry averages.
Sources: Small Business Commissioner / London Economics late-payment research; Coface UK Payment Survey; Late Payment of Commercial Debts (Interest) Act 1998.