Guide
When is a commercial payment legally late? The 30 and 60 day rules
Updated
Interest cannot start until the payment is late, and lateness is defined by statute, not by whatever the customer's purchase ledger says its terms are.
If you did not agree a payment date
gov.uk is explicit: "If you do not agree a payment date, the law says the payment is late 30 days after either: the customer gets the invoice; you deliver the goods or provide the service (if this is later)" (gov.uk). That is the default, and it applies whether the customer is a business or a public body.
If you did agree a payment date
- Public authority customer
- The agreed date "must usually be within 30 days". Section 4(2D) of the Act makes the relevant day the last day of the 30 day period where that falls earlier than the agreed payment day.
- Business customer
- The agreed date must usually be within 60 days. You can agree longer, "but it must be fair to both businesses". Section 4(2E) and (2F) put it as a test of whether the agreed day is grossly unfair to the supplier: if it is not grossly unfair, the agreed day stands.
The two 30 and 60 day windows both start on the later of the day you performed your obligation and the day the customer had notice of the amount of the debt (section 4(2H) and (2I)). Sending an invoice after the work is what usually starts the clock.
Then interest runs from the next day
Section 4(2) says statutory interest "starts to run on the day after the relevant day for the debt, at the rate prevailing under section 6 at the end of the relevant day". Two things follow. First, do not count the due date itself when you fill in the days late. Second, the rate is set on that day and does not move afterwards, which is why our calculator asks you for the base rate rather than assuming today's.
A worked sequence
- 1 April 2026: you complete the work and invoice £10,000. No payment date was agreed.
- 1 May 2026: 30 days have passed. This is the relevant day.
- 2 May 2026: statutory interest starts running at 11.75%, the rate fixed by the base rate in force on 31 December 2025.
- 1 July 2026: 60 days late. Interest stands at £193.15 and the fixed sum at £100, so £293.15 can be invoiced on top of the £10,000.
- Interest keeps accruing at £3.22 a day until the debt is paid.
Whether a debt qualifies at all, whether the terms you agreed are grossly unfair, and whether a contractual interest rate has displaced the statutory one are legal questions on your facts. This page explains the statutory framework, it is not advice on your contract.