Late payment interest calculator (UK)

How statutory late payment interest works

• The rate: 8% plus the Bank of England base rate, under the Late Payment of Commercial Debts (Interest) Act 1998. The base rate field above is editable because it changes; the default of 4.00% was last checked on 15 July 2026.
• The maths: invoice amount × annual rate ÷ 365 gives the daily interest, multiplied by the days overdue. It is simple interest, not compound.
• When it starts: the day after the agreed due date, or 30 days after invoice or delivery if no date was agreed.
• Fixed compensation: £40 per invoice under £1,000, £70 from £1,000 to £9,999.99, £100 at £10,000 or more, claimable per overdue invoice on top of the interest.
• Scope: business-to-business debts only. Consumer invoices and contracts with their own substantial late payment remedy follow different rules. This page is general information, not legal advice.

Do I actually send this to the client?

Usually the threat is enough. Most late payers move the invoice up the pile as soon as a statement arrives showing interest accruing daily and the fixed compensation added. A polite note that statutory interest is now running, with the daily figure spelled out, changes behaviour faster than a fourth copy of the invoice. The chase pack below gives you the full escalation path: friendly reminder, firm reminder, formal interest notice, then a letter before action as the last step before small claims.

How much interest can I charge on a late payment in the UK?

Statutory interest is 8% plus the Bank of England base rate on business-to-business debts under the Late Payment of Commercial Debts (Interest) Act 1998. With the base rate at 4%, that is 12% a year, charged as simple daily interest from the day after the invoice was due.

How do I calculate interest per day on an overdue invoice?

Multiply the invoice amount by the annual statutory rate and divide by 365. A £1,000 invoice at 12% works out at £120 a year, which is about 33p per day. Multiply the daily figure by the number of days overdue to get the total.

What is the fixed compensation for late payment?

As well as interest, you can claim a fixed sum per overdue invoice: £40 for debts up to £999.99, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more. You can also claim reasonable recovery costs above the fixed sum.

Do I need a clause in my contract to charge late payment interest?

No. The statutory right applies automatically to business-to-business contracts unless the contract already has a substantial contractual remedy for late payment. If your contract sets its own interest rate, that usually applies instead of the statutory rate.

When does late payment interest start running?

From the day after the agreed due date. If no date was agreed, the law sets a default of 30 days after the invoice was received or the goods or services were delivered, whichever is later. Interest runs until the debt is paid.

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