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. The current rate is 11.75% per year (Bank of England base rate 3.75% + 8%).
How it works
1. Statutory interest
Interest accrues at 8% above the Bank of England base rate — currently 11.75% per year — 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.
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.
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.
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 the Bank of England base rate — currently 3.75%, so the statutory rate is 11.75% per year. 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.
What is the current Bank of England base rate?
As of July 2026, the Bank of England base rate is 3.75%. Adding the statutory 8% margin gives a late-payment interest rate of 11.75% per year. The calculator on this page uses this rate automatically.
Stop chasing late payers in the first place
Track what's paid and what's owed
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