Can I Claim Late Payment Compensation On Paid Invoices?
Most businesses assume that once a late invoice has been settled, the matter is closed. It is not. Under UK law, your right to claim statutory compensation and interest on a late payment survives the payment itself. If a public sector client paid you late, even if that payment was made years ago, you may still have a live entitlement.
This guide explains how late payment compensation works on paid invoices, what you are entitled to, and how to act before the time limit expires. For a full overview of what a late payment compensation claim involves, see our dedicated guide.
What Is a Late Payment Compensation Claim?
A late payment compensation claim is a legal right established by the Late Payment of Commercial Debts (Interest) Act 1998. The Act requires public bodies and contracting authorities to pay undisputed invoices within 30 days. Where they fail to do so, suppliers are entitled to statutory interest and fixed compensation per invoice, regardless of whether the invoice has since been paid.
The Act applies to the commercial supply of goods and services to the public sector. It does not cover personal debt.
For a full explanation of how the legislation protects your business, see our dedicated guide.
What Are You Entitled to On a Paid Invoice?
The entitlement has two components.
Fixed compensation applies per overdue invoice based on its value: £40 for debts under £1,000, £70 for debts between £1,000 and £9,999.99, and £100 for debts of £10,000 or more.
Statutory interest accrues daily at 8% above the Bank of England base rate, calculated from the day after payment was due to the date it was actually received.
On a single invoice this may seem modest. Across multiple invoices, larger contract values, or significantly overdue payments, the total entitlement can reach several thousand pounds.
What's my claim worth?How Long Do You Have to Claim?
Your entitlement is time-limited. In England, Wales, and Northern Ireland, you have six years from the date payment was received to make a claim. In Scotland, the period is five years. The clock runs from the date of actual payment, not the invoice date or the date it became overdue.
This means invoices settled late several years ago may still be within the limitation window. If you have historic late payments from public sector clients, it is worth checking your eligibility now.
How the Process Works
LPA buys your statutory late payment rights outright. We assess your entitlement using our own records, make you a fixed guaranteed offer, and pay you within 24 hours of receiving signed documents. You do not need to produce invoices or manage any ongoing process.
Step 1: Tell us your company details. That's all we need to get started. (Takes minutes)
Step 2: We check our records to assess whether you have a claim. (No input required from you)
Step 3: If you have a claim, we offer you a fixed, guaranteed purchase price. (Fixed amount, agreed upfront)
Step 4: We send our standard-form assignment documents for signature and ask you to confirm your bank details. (Straightforward documentation)
Step 5: Once in receipt of the signed documents and bank details, we make payment within 24 hours and your involvement is over. We then take full responsibility for the claims. (Immediate payment, zero ongoing obligations)
Am I eligible to claim?Frequently Asked Questions
Can I claim late payment compensation on an already-paid invoice?
Yes. Your right to statutory interest and fixed compensation on a late payment survives the settlement of the invoice. The entitlement exists from the moment payment was received outside the 30-day window.
What is the time limit for making a late payment claim?
In England, Wales, and Northern Ireland, you have six years from the date payment was received. In Scotland, the period is five years.
How much compensation can I claim per invoice?
Under the Act, fixed compensation is £40 for debts under £1,000, £70 for debts between £1,000 and £9,999.99, and £100 for debts of £10,000 or more. Statutory interest is calculated separately on top of this.
How do I know if I am eligible to claim?
Use our free eligibility checker to confirm whether your business qualifies. If you do, the claim calculator will give you an indicative value.
What if a client has more than one overdue invoice?
You can claim on every invoice paid late, provided each relates to a separate order of goods or services. LPA assesses each invoice individually and combines them into a single purchase price.
Am I eligible to claim?
