Does interest run on a disputed invoice?
The short answer
Yes, on what's owed. The Late Payment of Commercial Debts (Interest) Act 1998 counts the whole or any part of the price1 as a debt, so the part your client doesn't dispute carries its own interest at 8% on top of the Bank of England base rate6 and a fixed sum for late payment, £40 to £1004, whatever is argued about the rest. Claim that part now and keep the rest in reserve.
England and Wales only. WolfX is software, not a law firm.
What you can add
A £6,800 invoice with £1,900 disputed
Say you invoiced another business £6,800, due on 14 August 2026. The client disputes £1,900 of it and has paid nothing. On 25 September 2026 the other £4,900 is 42 days late. It went late in the second half of 2026, so the rate is 11.75%.
Then it grows by £1.58 a day until they pay. The disputed £1,900 stays out of the demand. The Small Business Commissioner says you cannot charge interest on an invoice paid late due to a dispute10, so expect that answer on this part. If their objection fails, interest on it usually runs from 15 August: £25.69 for these 42 days, held in reserve.
The road ahead
Five steps. All free.
Step 1: Ask what is disputed
Ask in writing which part they dispute and why, by a date. The court's own first step is a reply that explains which facts and parts of the claim are disputed7. A vague "not happy with it" is not that.
Step 2: Correct anything wrong on your side
A court can cut interest because of the supplier's own conduct3, and that includes any act or omission, such as a wrong invoice or price. If part of yours is wrong, send a corrected invoice before you ask for anything.
Step 3: Work out the undisputed part
For debts that went late from 1 July to 31 December 2026 the rate is 11.75% a year: 8%5 plus the 3.75% Bank Rate11 on 30 June 2026. Each day adds the amount × 11.75% ÷ 365, and the fixed sum is added once.
Interest starts the day after the agreed payment day2. If no payment day was agreed, it starts 30 days after the later of the work being finished, the client getting notice of the amount, or a sign-off procedure in your contract ending. A dispute is on neither list.
Step 4: Send the letter below
It asks for the undisputed part with its interest by a date, asks them to name what they dispute, and leaves the disputed part out. Keep a copy.
If they pay, take it as payment of that part only. Don't accept wording that settles the whole invoice: should I accept less in full and final settlement.
Step 5: Give them 14 days, then deal with the disputed part on its own
A company has 14 days7 to reply. If the undisputed part is still unpaid then, it is a plain debt: send a letter before action. A sole trader gets the protocol letter and 30 days8.
The disputed part is a separate argument: my client disputes my invoice, what happens next.
A letter you can copy
Letter asking for the undisputed part
Send it once the payment date has passed and the client has disputed part of the invoice, or paid nothing while they argue.
Tap a highlighted gap to see what goes in it.
Send it by email so it is dated, and keep a copy with the invoice. If the client is a sole trader, ask for payment in 14 days as written. Before any court claim they must also get the Pre-Action Protocol for Debt Claims letter, with its reply form and 30 days to answer; this letter is not that one.
When not to bother
When it isn't worth it
- The whole invoice is challenged, with a good reason. If the dispute is whether the work was done at all, settle that first: my client disputes my invoice, what happens next. Claim interest after.
- The undisputed part is small. A few pounds of interest and a £40 fixed sum rarely repay a formal letter. A friendly reminder will do.
- Your contract sets its own interest. If it is a fair rate, it applies instead12 of statutory interest, on the undisputed part too. See can I charge my own late fee.
- It is a construction contract. Pay less notices and their own payment rules apply, so this road may not fit: what is a pay less notice.
- You're in Scotland or Northern Ireland. The interest and fixed sum are UK-wide, but the reply days and court steps here are England and Wales; those nations have their own court process9.
The Wolf's note
An argument about one deliverable does not freeze the whole invoice. Ask for the part they accept, by a date, and ask them to name the part they don't. What they say next shows what the rest is worth.
Mr. Wolf · the AI inside WolfX
What comes next
Your next move
When it first goes quiet
My client paid only part of the invoice. What about the rest?
The rest is still owed.
7 min read · Letter included
If they push back
Should I accept less in "full and final settlement"?
Only on your terms. In a small claim, turning down an offer is not, of itself, unreasonable behaviour, but treat any deal you agree as binding.
7 min read · Letter included
How do I work out late payment interest to the day?
Multiply the invoice by the yearly rate, divide by 365, then multiply by the days late.
6 min read · Letter included
Don't want to do this yourself?
The Wolf does every step for you. He works out the sums, writes the letters and keeps track of every date. Nothing goes without your yes.