UK Late Payment Interest Calculator
Calculate the statutory interest and fixed compensation you can legally charge on overdue business invoices under the Late Payment of Commercial Debts (Interest) Act 1998. Debts falling late now carry 11.75% a year — the 3.75% Bank of England base rate in force on 30 June 2026, plus 8%. That reference rate is fixed for six months at a time and then stays with the debt, so the calculator reads the right one off your due date rather than applying today’s rate to an older invoice.
How it works
1. Statutory interest
Interest accrues at 8% above the Bank of England reference rate — 11.75% per year for debts falling late today — calculated daily from the day after the due date. The due date is either the date you agreed, or 30 days after you delivered the goods or finished the work if nothing was agreed; the calculator handles both.
2. Fixed compensation
On top of interest, you can claim a fixed sum to cover the cost of chasing the debt: £40 on invoices under £1,000, £70 on invoices from £1,000 to £9,999.99, and £100 on invoices of £10,000 or more. This applies once per overdue invoice.
3. Send the claim
Use the "Copy text for chaser email" button above to get a ready-to-paste paragraph that cites the Act, the rate, and the amounts. Send it to the debtor by email. If payment still doesn't come, you can recover all three amounts — the invoice, the interest, and the compensation — through the courts.
Statutory rate by period
The rate is set from the Bank of England base rate in force on the 30 June or 31 December before the debt fell late, and then stays fixed for that debt. Find the row your invoice fell late in — that is your rate, however many times the Bank has moved since.
| Debt fell late | Reference date | Base rate | Statutory rate |
|---|---|---|---|
| 1 Jul 2026 – 31 Dec 2026 | 30 Jun 2026 | 3.75% | 11.75% |
| 1 Jan 2026 – 30 Jun 2026 | 31 Dec 2025 | 3.75% | 11.75% |
| 1 Jul 2025 – 31 Dec 2025 | 30 Jun 2025 | 4.25% | 12.25% |
| 1 Jan 2025 – 30 Jun 2025 | 31 Dec 2024 | 4.75% | 12.75% |
| 1 Jul 2024 – 31 Dec 2024 | 30 Jun 2024 | 5.25% | 13.25% |
| 1 Jan 2024 – 30 Jun 2024 | 31 Dec 2023 | 5.25% | 13.25% |
| 1 Jul 2023 – 31 Dec 2023 | 30 Jun 2023 | 5% | 13% |
| 1 Jan 2023 – 30 Jun 2023 | 31 Dec 2022 | 3.5% | 11.5% |
| 1 Jul 2022 – 31 Dec 2022 | 30 Jun 2022 | 1.25% | 9.25% |
| 1 Jan 2022 – 30 Jun 2022 | 31 Dec 2021 | 0.25% | 8.25% |
| 1 Jul 2021 – 31 Dec 2021 | 30 Jun 2021 | 0.1% | 8.1% |
| 1 Jan 2021 – 30 Jun 2021 | 31 Dec 2020 | 0.1% | 8.1% |
| 1 Jul 2020 – 31 Dec 2020 | 30 Jun 2020 | 0.1% | 8.1% |
Important notes
- B2B only: The Late Payment Act applies to commercial debts — business-to-business invoices. Consumer debts (sales to individuals) are not covered.
- You don't need to agree it in advance: The statutory right exists by law. You can claim it even if your invoice didn't mention late-payment terms.
- Contractual terms can override it: If you agreed a different interest rate in your contract, that rate applies. But a contract cannot remove the right to interest entirely — grossly unfair terms can be challenged.
- Keep records: The original invoice, proof of delivery, and your chaser emails are evidence if the debt ever reaches court.
Related tools
Need to send the invoice in the first place? Use the free invoice generator to create a clean PDF with payment terms built in — or grab a UK invoice template, VAT invoice template, or no-VAT template pre-filled for your situation.
For the wider picture — how much UK small businesses are owed, how many close over it, and what the 2026 reform package changes — see the UK late payment statistics, every figure with a source.
Frequently asked questions
What is statutory late payment interest?
Under the Late Payment of Commercial Debts (Interest) Act 1998, a UK business can charge interest on overdue invoices to other businesses (B2B), without agreeing it in the contract beforehand. The rate is 8% above a Bank of England base rate that is fixed for six months at a time, not the rate on the day you calculate. A debt that fell late between 2026-07-01 and 2026-12-31 carries 11.75% a year — the 3.75% base rate in force on 30 June 2026, plus 8% — and keeps that rate for its whole life. Interest runs from the day after the agreed due date, or 30 days after delivery if no due date was set.
What is the fixed compensation for late payment?
On top of interest, you can claim a fixed sum: £40 on debts under £1,000, £70 on debts from £1,000 to £9,999.99, and £100 on debts of £10,000 or more. This is compensation for the cost of recovering the debt and applies once per invoice, regardless of how late the payment is.
Does this apply to invoices to consumers?
No — the Late Payment of Commercial Debts Act only applies to business-to-business transactions. If your customer is a consumer (an individual buying for personal use), you cannot claim statutory interest or compensation unless you agreed separate late-payment terms in the contract.
Can I charge late payment interest if I didn't mention it on the invoice?
Yes. The statutory right exists by law, whether or not you printed it on the invoice. However, mentioning your late-payment terms on the invoice and in your terms of business makes chasing easier and signals to the customer that you take payment dates seriously.
What if I agreed different payment terms in my contract?
Contractual terms can replace the statutory scheme, but they must be fair. A contract cannot exclude the right to interest entirely — you can still fall back on the statutory rate if your own terms are weaker or if the contract is silent. Grossly unfair terms that try to prevent interest altogether can be challenged.
How do I actually claim the interest?
Send the debtor a written demand — email is fine — stating the invoice, the due date, the days overdue, the interest rate, and the amounts you are claiming. The calculator on this page produces a ready-to-copy paragraph you can paste into that email. If payment still does not come, the interest and compensation are recoverable in court alongside the debt itself.
Which Bank of England base rate applies to my invoice?
Not necessarily today's. Section 6 of the Act sets a reference rate twice a year: a debt that becomes late between 1 January and 30 June uses the base rate in force on the preceding 31 December, and one that becomes late between 1 July and 31 December uses the rate in force on that 30 June. That rate is then fixed for the life of the debt and does not move when the Bank moves. For debts falling late right now the reference rate is 3.75% (set on 30 June 2026), giving 11.75% a year. The calculator picks the right period from your due date, including for older invoices.
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