Late payment is one of the most frustrating parts of running a trade business. You did the work. You invoiced promptly. And now you are waiting, chasing, and wondering whether you will ever see the money.
The good news is that Irish law gives you more rights than most tradespeople realise. Here is what you are entitled to and how to use it.
The Law That Protects You
The European Communities (Late Payment in Commercial Transactions) Regulations 2012 give businesses the right to charge interest and claim compensation when invoices are paid late by other businesses or public authorities.
Note that these regulations apply to business-to-business transactions and payments from public bodies. They do not apply in exactly the same way to payments from private individuals, though your standard contract terms can cover that separately.
What You Are Entitled To
Statutory interest. When a business invoice goes overdue, you are entitled to charge interest automatically from the day after the due date. The rate is the ECB reference rate plus 8 percent. You do not need to warn the customer in advance. The right exists by law.
Fixed compensation. On top of interest, you can claim a fixed sum for the cost of recovering the debt. The amounts are:
- €40 for invoices under €1,000
- €70 for invoices between €1,000 and €10,000
- €100 for invoices over €10,000
Recovery costs. If you incur costs beyond the fixed compensation in recovering the debt, for example legal fees, you can claim those too.
Default Payment Terms
If you have not specified payment terms on your invoice, the law sets a default. For business-to-business transactions, the default is 30 days. For transactions with public authorities, the default is 30 days and can only be extended to 60 days in exceptional circumstances.
This means even if you forget to put payment terms on an invoice, the customer is still legally required to pay within 30 days before late payment interest starts accruing.
How to Use This in Practice
You do not need a solicitor to invoke these rights. A clear, firm letter does the job in most cases.
When an invoice goes overdue, send a formal letter or email that:
- States the invoice number, amount, and original due date
- Notes that the invoice is now overdue
- States that you are entitled to charge interest at the statutory rate from the due date
- States the fixed compensation you are entitled to
- Sets a new deadline for payment, typically seven to fourteen days
- States that you will pursue the matter further if payment is not received by that date
Most customers who receive this letter pay promptly. The reference to statutory rights signals that you know your position and are willing to enforce it. That alone resolves the majority of late payment situations.
When to Escalate
If the letter does not produce payment, your options include:
Debt recovery. The Irish small claims procedure does not cover unpaid invoices. Check the Courts Service guidance on eligibility and seek advice on the appropriate debt recovery route for your situation.
A solicitor’s letter. For larger amounts, a letter from a solicitor often prompts payment where your own letters have not. The cost is usually modest relative to the debt.
A debt collection agency. Some tradespeople use debt collection agencies for persistent non-payers. The agency takes a percentage of what they recover, but it removes the chase from your plate.
The most important thing is to act promptly. The longer a debt goes unaddressed, the harder it becomes to collect. Chase overdue invoices within days of the due date, not weeks.
Guide navigation and next steps checked 8 October 2026. The article publication date is shown above.