UK Late Payment Interest Enforcer
Claim the Interest Late Payers Owe You
Executive Summary
In a nutshell
A SaaS tool that connects to Xero/QuickBooks, automatically identifies overdue B2B invoices, calculates the statutory interest (8% + BoE base rate = currently 12.5%) and fixed compensation (£40–£100) businesses are legally owed under the Late Payment of Commercial Debts (Interest) Act 1998, then generates legally-cited demand letters and tracks recovery. The UK government has just announced the biggest late payment crackdown in 25 years — making statutory interest mandatory in all commercial contracts from 2027. With £109 billion in overdue payments hitting SMEs in 2025 alone and 50,000 businesses closing annually because of cashflow problems, the timing is exceptional. Most businesses don’t know they have this right, and no existing tool automates the full enforcement pipeline.
The Story
Meet the user
Dan runs an electrical contracting firm in Manchester with eight employees. He’s owed £47,000 in overdue invoices right now — three clients, all more than 30 days late, one pushing 90. He sends polite reminders. He follows up with phone calls. His wife helps with the bookkeeping on weekends and keeps saying “you should charge them interest.” But Dan doesn’t know how to calculate it, isn’t sure he’s legally allowed to, and frankly doesn’t fancy the awkward conversation. So the money sits there, not earning, while he dips into his business overdraft to cover the payroll gap.
One evening, scrolling through a contractor forum, he spots a post about a tool called LatePayClaim. He connects his Xero account, and within seconds it shows him: he’s owed £2,340 in statutory interest and £240 in fixed compensation — money the law says is his, no questions asked. It generates a formal demand letter citing the Act, addressed to each debtor, ready to send. He sends all three that night. Two pay within a week.
Scores
How does this idea stack up?
8.0/10
£109B in overdue payments, 1.5M affected SMEs, no dominant automated solution. The average SME loses £22,000/year to overdue invoices.
50,000 businesses close annually from cashflow problems caused by late payments. 90% of UK companies experienced late payments in 2025.
Standard web stack + Xero/QB APIs, but accounting integrations need careful handling. Interest calculation engine is straightforward maths.
Government’s biggest late payment crackdown in 25 years — mandatory statutory interest from 2027. The government is essentially doing your marketing.
Late payment is a permanent structural problem in B2B commerce. New legislation makes this more relevant, not less.
Moderate — Xero/QB API integration, legal letter templates, interest calculation engine. Nothing beyond a competent solo developer.
Strongest
Opportunity & Pain
£109B problem affecting 1.5M businesses with no automated enforcement tool. The average SME loses £22,000/year to overdue invoices, and 50,000 businesses close annually from the cashflow impact.
Watch out
Effort to Build
The Xero/QuickBooks API integrations and getting the legal letter templates right will take genuine effort, but nothing beyond a competent solo developer.
Pain Point
The problem
“On average, business owners affected by late payments waste 86 hours per year chasing invoices, totalling 133 million staff hours across all UK businesses.”
— UK Government late payment consultation, 2025
The problem is enormous and well-documented: £109 billion in overdue payments hit UK SMEs between January and September 2025 — a record. 90% of UK companies experienced late payments, 50,000 SMEs close annually due to cashflow crises caused by late payments, and 38 businesses close every day because of late payment-related cashflow problems.
The average small business loses £22,000 per year to overdue invoices, with an average payment delay of 52 days past invoice due date. Business owners waste 86 hours per year chasing unpaid invoices — time that could be spent earning.
The critical insight: most businesses don’t know they have a legal right to claim 12.5% interest plus £40–£100 per invoice. Even those who do know rarely claim it because the calculation is manual, the process is confusing, and they worry about damaging client relationships. The existing tools are all calculators — none of them automate the actual enforcement pipeline.
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