AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Sometimes. The UK Late Payment Act applies to business-to-business contracts governed by UK law, but section 12 switches it off where you chose UK law and the contract has no significant connection with the UK and would otherwise be under foreign law. If it applies, you can claim 8% plus Bank of England base rate, and a fixed sum of £40, £70 or £100. The safer route is a late-payment clause in the contract itself.
The Late Payment of Commercial Debts (Interest) Act 1998 gives UK suppliers a right to interest and compensation when a business customer pays late. Many freelancers assume it travels with them to any client. It does not, automatically. Whether it reaches a client in Lagos depends on which law governs your contract, and on how connected the contract is to the UK.
What section 12 says
Section 12, "Conflict of laws", has two rules (legislation.gov.uk, no outstanding effects):
- The Act does not apply to a contract governed by the law of part of the UK by the parties' choice if there is no significant connection between the contract and that part of the UK, and, but for that choice, the law would be foreign.
- The Act does apply to a contract governed by foreign law by choice if, but for that choice, the law would be UK law and there is no significant connection with any other country.
In plain terms: you cannot import the Act into a contract with no real UK link just by writing "English law". But if you are a UK freelancer doing the work in the UK, your contract usually does have a significant UK connection, so a choice of English law is likely to bring the Act with it. If the contract says nothing about law, which country's law applies is a separate question that a lawyer would need to answer.
Business clients only
The Act covers business-to-business contracts. A private individual in Nigeria commissioning a portrait is not covered.
What you can claim
GOV.UK's late payment guide (updated 16 October 2026) sets out the statutory remedies:
- Statutory interest
- 8% a year plus the Bank of England base rate, for business-to-business transactions. It does not apply if your contract sets a different rate.
- When a payment is late
- On the agreed date; if none, 30 days after the customer receives the invoice or you deliver, whichever is later.
- Fixed sum
- £40 for debts under £1,000; £70 for £1,000 to £9,999.99; £100 for £10,000 or more. Once per payment, on top of interest.
- Reasonable costs
- Suppliers can also claim reasonable costs of each attempt to recover the debt.
To add interest, GOV.UK says to send a new invoice showing it.
A worked example
Example only. The Bank of England held Bank Rate at 3.75% on 17 September 2026; check its page for the rate that applies to your debt. On that figure, statutory interest is 11.75% a year. A £4,000 invoice paid 45 days late gives:
- Annual interest: £4,000 × 11.75% = £470.
- Daily interest: £470 ÷ 365 = about £1.29.
- 45 days: £470 × 45 ÷ 365 = about £57.95.
- Fixed sum for a £4,000 debt: £70.
- Total extra claim: about £127.95.
Why a contract clause is better
Even when the Act applies, collecting interest from a Nigerian business means persuading it to pay or enforcing a judgment in Nigeria. A clause it signed is easier to point to than a UK statute it has never heard of. A simple clause might say that overdue sums carry interest at a stated rate a year above Bank of England base rate from the due date until paid. GOV.UK notes that a contract rate replaces the statutory one, so set it at a level you can defend as fair.
If the contract is under Nigerian law
The UK Act will usually not help. Interest then depends on the contract terms and on what a Nigerian court will award. Courts in Lagos, including the Small Claims Court, deal with liquidated money claims; interest beyond what the contract says is for the judge.
Using interest as leverage
In practice, few freelancers collect the full interest from an overseas client. Its value is in the conversation. A formal demand that sets out the principal, the interest accruing each day and the fixed sum shows the client that delay has a cost, and gives you something to waive in return for prompt payment of the principal. If you do agree to waive it, say so in writing and make the waiver conditional on payment by a stated date.
What to check first
- Does your contract name a governing law, and is it English, Welsh, Scottish or Northern Irish law?
- Is the work done in the UK, and are you UK-based? That supports a significant connection.
- Is the client a business, not an individual?
- Did the contract set its own interest rate? If so, that rate applies instead.
For the step-by-step chase, see chasing an unpaid invoice from a Nigerian client and the clause list in contract terms to agree with a Nigerian client.
Where Pryme fits
Invoicing on a Pryme Business Account records due dates and lets you issue a fresh invoice showing interest. The Finance agent can prepare reminders and a schedule of what is overdue; nothing is sent without your approval.
Questions people ask
Does the UK Late Payment Act apply to overseas clients?
It can, if the contract is under UK law and has a significant connection with the UK. Section 12 stops it applying where UK law was chosen but there is no such connection.
What is the UK statutory late payment interest rate?
GOV.UK says 8% a year plus the Bank of England base rate for business-to-business debts, unless the contract sets a different rate.
How much compensation can I add to a late invoice?
£40 for debts under £1,000, £70 for £1,000 to £9,999.99 and £100 for £10,000 or more, once per payment, plus reasonable recovery costs.
Can I charge late interest to a Nigerian individual?
Not under the Act, which covers business-to-business contracts. A clause in your contract with the individual is the only route.
Sources
- legislation.gov.uk: Late Payment of Commercial Debts (Interest) Act 1998, section 12 · accessed Oct 2026
- GOV.UK: Late commercial payments, when a payment becomes late (updated 16 Oct 2026) · accessed Oct 2026
- GOV.UK: Late commercial payments, interest on late payments · accessed Oct 2026
- GOV.UK: Late commercial payments, claim debt recovery costs · accessed Oct 2026
- Bank of England: Bank Rate (decision of 17 Sep 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.