Invoice Payment Terms UK: What to Use and How to Enforce Them
Setting the right payment terms on your invoices is one of the most important things you can do as a UK freelancer or small business owner. Vague or missing payment terms are one of the top reasons invoices get paid late — or not at all.
This guide covers what payment terms are, which ones to use, and how to enforce them legally in the UK.
What Are Invoice Payment Terms?
Payment terms specify when and how a client is expected to pay your invoice. They set clear expectations and form part of the contract between you and your client.
Common UK payment terms include:
| Term | Meaning | |------|---------| | Net 7 | Payment due within 7 days | | Net 14 | Payment due within 14 days | | Net 30 | Payment due within 30 days | | Net 60 | Payment due within 60 days | | Due on receipt | Payment due immediately | | EOM | End of month |
In the UK, Net 30 is the most widely used standard for B2B invoices. However, you can negotiate any terms that work for you and your client — as long as it's agreed before the work begins.
UK Legal Requirements for Payment Terms
The Late Payment of Commercial Debts (Interest) Act 1998 gives UK businesses the right to:
- Charge interest on late B2B payments at 8% above the Bank of England base rate
- Recover debt recovery costs — between £40 and £100 depending on the invoice amount
- Claim reasonable recovery costs beyond that if needed
For consumer invoices (B2C), different rules apply, and you cannot use the statutory interest provisions automatically.
The maximum payment term allowed under the Act for large companies paying SMEs is 60 days unless explicitly agreed otherwise and it is not "grossly unfair."
Which Payment Terms Should You Use?
Freelancers and contractors
- Net 14 is increasingly common for freelance work — it's reasonable and keeps cash flow healthy
- Net 30 is still acceptable but can mean long waits
- Consider 50% upfront, 50% on completion for larger projects
Small businesses and agencies
- Net 30 is the standard starting point
- If you work with larger clients, expect them to push for Net 60 — you can negotiate
- State your terms in your contract and on every invoice
Quick tips to get paid faster:
- State terms clearly — "Payment due within 14 days of invoice date"
- Add a due date — don't just say "Net 14", write the actual date
- Invoice immediately when work is complete
- Follow up early — a polite reminder 3 days before due date is professional and effective
What to Write on Your Invoice
Don't just write "Net 30" — be explicit:
"Payment is due within 30 days of the invoice date. Late payments will incur interest at 8% per annum above the Bank of England base rate, in accordance with the Late Payment of Commercial Debts Act 1998."
This makes your terms legally enforceable and signals that you take payment seriously.
How to Chase a Late Invoice
If a payment is late:
- Day 1 (due date): Send a polite reminder email referencing the invoice number and amount
- Day 7 (1 week late): Follow up again, firmer tone
- Day 14 (2 weeks late): Send a formal letter before action
- Beyond 30 days: Consider small claims court (England/Wales: GOV.UK Money Claim Online) or a debt recovery service
Always keep records of all communication in case you need to escalate.
Adding Payment Terms in Billdrop
Billdrop lets you set payment terms when creating an invoice, so due dates are automatically calculated and clearly shown on the invoice PDF.
No account needed — create a professional UK invoice with correct payment terms in under 2 minutes.