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 — averaging 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: annual chasing hours, 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.