Late payment between businesses: what the 1998 Act means on a cup order

A bulk order of printed cups placed by a business is a business to business contract, and when the invoice is paid late a specific Act of Parliament decides what the supplier can add to it. This article sets out what the Late Payment of Commercial Debts (Interest) Act 1998 and GOV.UK say about payment dates, statutory interest and the fixed sums, and what that means for a buyer ordering stock or hiring cups for an event. It is general information, not legal advice.

When the Act applies

Section 2(1) says the Act applies to a contract for the supply of goods or services where the purchaser and the supplier are each acting in the course of a business, other than an excepted contract. The definition of a contract for the supply of goods or services in section 2(2) and (3) covers a contract of sale of goods, and also a contract that transfers goods, bails goods by way of hire or agrees to carry out a service. A purchase of printed cups and a hire of cups for an event are both within those words, in our reading. Section 3(1) makes a debt to pay the whole or part of the contract price a qualifying debt. A consumer buying a single cup is not a business purchaser, and this Act is not the rule that applies to that sale.

When a payment is late

GOV.UK says that if the parties agree a payment date for a business transaction, it must usually be within 60 days, and that a longer period can be agreed if it is fair to both businesses. If no payment date is agreed, GOV.UK says the payment is late 30 days after either the customer gets the invoice or the supplier delivers the goods or provides the service, if that is later.

Section 4 of the Act is the statutory version. Interest starts to run on the day after the relevant day for the debt. Where a date was agreed, that agreed payment day is the relevant day. Where none was, the relevant day is the last day of the 30-day period that starts with the later of the day the supplier's obligation was performed and the day the purchaser had notice of the amount of the debt. Where the purchaser is not a public authority and the agreed payment day falls after the end of a 60-day period measured in the same way, section 4(2E) makes the end of the 60-day period the relevant day, unless the agreed day is not grossly unfair to the supplier (section 4(2F)). Section 4(7A) says all the circumstances are considered in judging that, including whether something is a gross deviation from good commercial practice and contrary to good faith and fair dealing.

Two further rules in section 4 matter for cups. Where the purchaser has a procedure of acceptance or verification under which the goods are checked against the contract, which in our reading could include a check of a printed run, section 4(5A) to 4(5D) can move the start of the period to the day after that procedure is completed. And where the debt is created by a payment for a period of hire, section 4(6) treats the supplier's obligation as performed on the last day of that period. Section 4(2G) has its own rule for an advance payment, which links to section 11 of the Act, and we did not read section 11. A buyer who pays a deposit on a custom print order should ask the supplier or an adviser how that rule applies.

What a supplier can add

GOV.UK says the interest a business can charge is statutory interest, which is 8% plus the Bank of England base rate for business to business transactions, and that statutory interest cannot be claimed where a contract sets a different rate of interest. Section 6 of the Act leaves the rate to an order made by the Secretary of State, which we did not read, so the 8% plus base rate figure is reported as GOV.UK states it. GOV.UK also says to send a new invoice if the supplier decides to add interest to the money it is owed.

Alongside the interest, section 5A, which showed no outstanding effects on 27 October 2026, entitles the supplier to a fixed sum once statutory interest begins to run: £40 for a debt of less than £1,000, £70 for a debt of £1,000 or more but less than £10,000, and £100 for a debt of £10,000 or more. GOV.UK gives the same three amounts and says the business can only charge once for each payment. Section 5A(2A) adds that where the supplier's reasonable costs of recovering the debt are not met by the fixed sum, the supplier is also entitled to the difference between the fixed sum and those costs.

Can a contract change this

Section 8(1) says any contract terms are void to the extent that they purport to exclude the right to statutory interest, unless there is a substantial contractual remedy for late payment of the debt. Section 8(5) says that, subject to the section, the parties are free to agree contract terms that deal with the consequences of late payment. In our reading, a buyer who negotiates longer payment terms or a different interest clause can do so only within limits: under section 8(3) and (4) a term that confers or varies the right to interest is void unless the remedy for late payment is a substantial one, and section 4(2E) can still apply to a long agreed payment day.

On a Branded Cups order

The wholesale cups page says prices are per cup and exclude VAT, that buying starts from 50 cups and that hire starts from 1,000 cups. The terms and conditions page says online checkout states the total payable and that a quotation states its applicable pricing and conditions. It does not set a payment period for business invoices, so, in our view, a buyer who needs a specific payment date for a large order can ask whether it can be written into the quote. Our guide to VAT invoices on a bulk cup order covers the document the buyer needs to reclaim VAT, and the reusable event cups page lists the range.

Where this stands

This was checked on 27 October 2026. Sections 2, 3, 4, 5A, 6 and 8 of the Act showed no known outstanding effects on legislation.gov.uk on that day. The base rate changes over time, so a supplier or buyer calculating interest on a real invoice should check the current Bank of England base rate and the rate in force under the Order.