Can I charge interest on late invoice payments in the UK?

Yes. UK businesses can usually charge statutory interest and fixed compensation on late commercial payments, unless the contract provides a substantial alternative remedy.

What interest rate can be charged for late payment in the UK?

Late payment interest is commonly charged at the Bank of England base rate plus 8% for business-to-business debts, where statutory late payment rules apply.

What should be included in invoice payment terms?

An invoice payment term should include the due date or payment period, accepted payment methods, bank details, late payment charges, and any early payment discount if applicable.

What does Net 30 mean on a UK invoice?

Net 30 means the full invoice amount is due 30 days from the invoice date, unless another start date is stated in the agreement.

Why are payment terms important on UK invoices?

Clear payment terms reduce confusion, help customers pay on time, support cash flow, and provide evidence if payment is disputed or becomes overdue.

How does this UK invoice payment terms page relate to an invoice document?

A UK invoice is generated from the main invoice document category page, while this page explains payment term wording and timing that can be included in that invoice.

Can I change payment terms before sending an invoice?

Yes. Payment terms can be updated before sending the invoice, provided they reflect the contract or agreement with the customer.

EN-GB>Corporate>Invoice>UK Invoice Payment Terms Guide

UK Invoice Payment Terms

Created: 9 Jun 2026

Understand common invoice payment terms in the UK and how they affect cash flow, due dates and client expectations. This guide is useful for creating clearer invoices, especially when using an AI Generated Invoice for use in the United Kingdom.

Payment Term	Payment Period Days	Common Usage	Event Based	Example Wording
Immediate
Due on receipt	0	Small business Freelancer or consultant Professional services	false	Payment is due on receipt of this invoice.
Payable immediately	0	Small business General commercial	false	This invoice is payable immediately.
Cash on delivery	0	Wholesale or supply General commercial	true	Payment is due on delivery of the goods.
Payment before dispatch	0	Small business Wholesale or supply	true	Goods will be dispatched once payment has cleared.
Payment in advance	0	Small business Freelancer or consultant Project work	true	Full payment is required before work begins.
Pro-forma payment required	0	Small business Wholesale or supply General commercial	true	Payment is required against this pro-forma invoice before supply.
Cleared funds before release	0	Wholesale or supply Project work General commercial	true	Release of goods or materials is subject to cleared funds.
Short term
Net 3 days	3	Freelancer or consultant Small business	false	Payment is due within 3 days of the invoice date.
Net 7 days	7	Small business Freelancer or consultant Professional services	false	Payment is due within 7 days of the invoice date.
7 days from receipt	7	Professional services General commercial	true	Payment is due within 7 days of receipt of this invoice.
7 days after delivery	7	Wholesale or supply General commercial	true	Payment is due within 7 days after delivery.
Net 10 days	10	Small business Professional services	false	Payment is due within 10 days of the invoice date.
Net 14 days	14	Small business Freelancer or consultant Professional services	false	Payment is due within 14 days of the invoice date.
14 days from receipt	14	Professional services General commercial	true	Payment is due within 14 days of receipt of this invoice.
Net 15 days	15	Small business Professional services General commercial	false	Payment is due within 15 days of the invoice date.
Net 21 days	21	Professional services Project work General commercial	false	Payment is due within 21 days of the invoice date.
Standard term
Net 30 days	30	Small business Professional services Wholesale or supply General commercial	false	Payment is due within 30 days of the invoice date.
30 days from receipt	30	Professional services General commercial	true	Payment is due within 30 days of receipt of this invoice.
30 days from delivery	30	Wholesale or supply General commercial	true	Payment is due within 30 days of delivery of the goods.
30 days from acceptance	30	Project work Professional services General commercial	true	Payment is due within 30 days of written acceptance.
30 days end of month	30	Wholesale or supply General commercial	true	Payment is due 30 days from the end of the invoice month.
End of month	31	Wholesale or supply General commercial	true	Payment is due by the last day of the invoice month.
Monthly account	31	Wholesale or supply Professional services General commercial	true	Monthly account invoices are payable by month end.
Extended term
20th of following month	50	Wholesale or supply General commercial	true	Payment is due by the 20th day of the month following the invoice month.
Net 45 days	45	Wholesale or supply Project work General commercial	false	Payment is due within 45 days of the invoice date.
45 days from receipt	45	Wholesale or supply General commercial	true	Payment is due within 45 days of receipt of this invoice.
Net 60 days	60	Wholesale or supply General commercial	false	Payment is due within 60 days of the invoice date.
60 days from receipt	60	Wholesale or supply General commercial	true	Payment is due within 60 days of receipt of this invoice.
60 days from delivery	60	Wholesale or supply General commercial	true	Payment is due within 60 days of delivery.
60 days end of month	60	Wholesale or supply General commercial	true	Payment is due 60 days from the end of the invoice month.
Net 90 days	90	Wholesale or supply General commercial	false	Payment is due within 90 days of the invoice date.
Net 120 days	120	Wholesale or supply General commercial	false	Payment is due within 120 days of the invoice date, where lawfully agreed.
Milestone based
Deposit on acceptance	0	Project work Freelancer or consultant Professional services	true	A deposit is payable on acceptance of the quotation.
50% upfront, 50% on completion	0	Project work Freelancer or consultant Professional services	true	50% is due before work starts and 50% on completion.
Staged milestone payments	7	Project work Professional services	true	Each milestone invoice is payable within 7 days of issue.
Payment on completion	0	Project work Freelancer or consultant Professional services	true	Payment is due on completion of the services.
7 days after completion	7	Project work Freelancer or consultant Professional services	true	Payment is due within 7 days after completion.
14 days after completion	14	Project work Professional services	true	Payment is due within 14 days after completion.
Payment on approval	0	Project work Freelancer or consultant Professional services	true	Payment is due on client approval of the deliverables.
7 days after approval	7	Project work Professional services	true	Payment is due within 7 days after written approval.
Immediate
Monthly retainer in advance	0	Freelancer or consultant Professional services	true	The monthly retainer is payable in advance on the first day of each month.
Standard term
Monthly retainer in arrears	30	Freelancer or consultant Professional services	true	The monthly retainer is invoiced in arrears and payable within 30 days.
Short term
Weekly invoice, 7 days	7	Freelancer or consultant Professional services General commercial	true	Weekly invoices are payable within 7 days of issue.
Fortnightly invoice, 14 days	14	Freelancer or consultant Professional services General commercial	true	Fortnightly invoices are payable within 14 days of issue.
Immediate
Payment by return	1	Small business Professional services	false	Payment is requested by return.
Payment on receipt of goods	0	Wholesale or supply General commercial	true	Payment is due on receipt of the goods.
Standard term
30 days from statement	30	Wholesale or supply General commercial	true	Payment is due within 30 days of the account statement date.
Direct debit on due date	30	Professional services General commercial	true	Payment will be collected by direct debit on the invoice due date.
Immediate
Card payment due immediately	0	Small business General commercial	false	Payment by card is due immediately on issue of this invoice.
Milestone based
Equal monthly instalments	30	Project work Professional services General commercial	true	The total is payable in equal monthly instalments as stated on this invoice.
Balance due on final invoice	7	Project work Freelancer or consultant Professional services	true	The remaining balance is payable within 7 days of the final invoice.
Retention release on completion	0	Project work General commercial	true	Retention is payable on completion, subject to agreed deductions.
Retention release after defects period	365	Project work General commercial	true	Retention is payable after the defects period ends.
Standard term
Statutory late payment interest	30	General commercial Professional services Wholesale or supply	true	Late payments may attract statutory interest and compensation.
Late payment compensation notice	30	General commercial Professional services Wholesale or supply	true	We reserve the right to claim late payment compensation and recovery costs.
Public authority 30 days	30	General commercial Professional services	true	Payment is due within 30 days where the customer is a public authority.
Extended term
B2B 60 day benchmark	60	General commercial Wholesale or supply	true	Payment is due within 60 days unless a shorter period is agreed.

What Invoice Payment Terms Are Common In The UK?

UK invoices commonly use immediate terms such as due on receipt, standard terms such as net 30 days, and extended terms such as net 60 or net 90 days for larger commercial supply chains. The UK default position under late payment legislation is often described as 30 days for public authorities and 60 days for business transactions unless otherwise agreed and provided the period is not grossly unfair.

How Should UK Businesses Choose A Payment Period?

Freelancers, consultants and small businesses often use 7, 14 or 30 day terms to protect cash flow.
Wholesale and supply arrangements often use end-of-month, monthly account or 30 to 60 day terms to match buyer accounting cycles.
Project work often uses deposits, staged payments, milestone invoices, completion payments or retention releases rather than a single fixed due date.
High-value or custom work may justify payment in advance, deposits or pro-forma invoices before delivery or work begins.

What Legal Points Should Be Reflected In UK Invoice Terms?

If an invoice is paid late, UK businesses may be able to claim statutory interest and fixed compensation under the Late Payment of Commercial Debts (Interest) Act 1998 and related regulations. Clear due dates, event triggers and accepted payment methods reduce disputes. For VAT invoices, payment wording should sit alongside the required invoice details explained by HMRC VAT Notice 700.

Want to Generate Your own Invoice?

Docaro AI can help you write your own Invoice for use in the United Kingdom in minutes.

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FAQs

What are standard UK invoice payment terms?

Standard UK invoice payment terms are 30 days from the invoice date, unless the contract states otherwise. Some businesses use 7, 14, 30, or 60-day terms depending on the agreement.

How should payment terms be written on a UK invoice?

What does “due on receipt” mean on an invoice?

Can I set my own invoice payment terms in the UK?

When is an invoice considered late in the UK?

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