What is statutory interest?
Interest you are legally entitled to charge another business on a late payment.
Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge interest on a business-to-business invoice that is paid late, unless your contract sets a different rate. The statutory rate is the Bank of England base rate plus 8%.
You can also claim a fixed sum for debt recovery costs on top: £40 on debts up to £999.99, £70 from £1,000 to £9,999.99, and £100 on £10,000 or more.
Most freelancers never actually charge it. Its real value is in the reminder: mentioning your statutory entitlement in a chase letter changes how an overdue invoice is treated, without you having to threaten anything.