How to set payment terms as self-employed in the UK

Most late payments start before the work does. Nobody said when the money was due, so the customer picked a date in their head. It was later than yours.

Payment terms fix that. They're just a line that says how much, by when and how. Here's how to set payment terms as a self-employed person in the UK, in five steps you can use today.

Step 1: Know what happens if you say nothing

If you don't agree a date with a business customer, the law picks one for you. GOV.UK says the payment is late 30 days after the customer gets the invoice, or 30 days after you deliver the goods or service, if that's later.

That's a fair safety net. But it's slow, and it starts from a date you may not be able to prove. Writing your own terms is better.

Step 2: Pick a due date that fits your cash flow

There's no single right answer. Think about what you can afford to wait for.

• Due on receipt or paid upfront. Good for small jobs, one-off customers and anything where you've bought materials. A tutor with a £35 lesson doesn't need to wait a month.
• 7 or 14 days. A sensible middle for regular small jobs. Say you're a cleaner invoicing monthly. 14 days means rent isn't waiting on a stranger's accounts team.
• 30 days. The common default for business customers. Fine if you have savings to cover the gap.

Bigger customers may ask for longer. GOV.UK says that when you agree a date, it must usually be within 60 days for business transactions. You can agree longer, but it must be fair to both businesses. If a customer asks for 90 days, you don't have to say yes. Ask what they'd give in return, like a deposit. I wrote about that in should I take a deposit.

Step 3: Write the terms where the customer will see them

Put the terms in three places:

1. The quote or message where you agree the job. One line is enough: "I'll invoice when the work is done, payable within 14 days."
2. The invoice itself. Show the due date as a real date, not just "14 days". A date is harder to argue with. My guide to writing an invoice as a sole trader covers what else goes on it.
3. Any contract or booking confirmation, if you use one.

Keep a copy of the message. If a customer says "you never told me", that's your proof.

Step 4: Say how to pay, and make it easy

A due date only helps if paying is simple. List the ways you accept payment. A bank transfer with your sort code and account number works. A payment link is quicker, because the customer taps once instead of copying numbers.

The easier it is, the less time an invoice spends sitting in someone's inbox. I covered the timing side in when to send an invoice.

Step 5: Decide your late payment line before you need it

You can add a sentence about late payment to your terms. For example: "Late payments may incur statutory interest and debt recovery costs."

That sentence comes from rights you already have. GOV.UK says that when another business pays late you can charge interest at 8% plus the Bank of England base rate, unless your contract sets a different rate. It also says you can't claim statutory interest if a contract has a different rate of interest. GOV.UK also lists fixed sums for debt recovery costs: £40 for debts up to £999.99, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. You can only charge once for each payment.

GOV.UK gives its own worked example: with a base rate of 0.5% and a £1,000 debt, interest comes to £85 a year, or about 23p a day. That example uses an illustrative base rate, so check the current rate before you do your own sum.

The daily amounts are small. The point of the sentence isn't to collect them. It's to tell the customer you know the rules, so they pay on time.

One caution. GOV.UK describes these rules for businesses owed money by other businesses. The pages don't cover consumer debts. If your customers are mostly private individuals, check before you quote them.

A simple template

Copy this and change the details:

Payment terms: payable within 14 days of the invoice date. Pay by bank transfer or the payment link on the invoice. Late payments may incur statutory interest and debt recovery costs under UK law.

Add your own deposit line if you need one. Then send it with the quote, not after the job.

My take

I think self-employed people undersell their own terms. They worry that "14 days" sounds pushy. It doesn't. It sounds like someone who runs a business.

The customers who object to clear terms are usually the ones who would have paid late anyway. Better to find that out before you start.

At Vcents, you can request a payment from a WhatsApp chat and send the customer a link that pays straight from their banking app. The money goes to your own bank account. It makes a short due date easier to ask for, because paying takes about ten seconds.

Sources

• GOV.UK, Agree payment terms, accessed 7 November 2026
• GOV.UK, Charging interest on late commercial payments, accessed 7 November 2026
• GOV.UK, Claim debt recovery costs, accessed 7 November 2026
• GOV.UK, Late commercial payments: interest and debt recovery, accessed 7 November 2026