Free tool
Late payment interest calculator (UK)
Work out exactly what a late payer owes you: statutory interest at 8% plus the Bank of England base rate, the daily interest that keeps adding up, and the £40 to £100 fixed compensation you can claim per invoice. Enter the invoice amount and due date and the numbers appear instantly, with the working shown. No sign up needed for the calculator.
Enter the invoice amount and due date to see the working.
The base rate changes. Check the current rate at the Bank of England before you send a claim; 3.75% is the default here as at 8 October 2026.
Quick answer
UK businesses can charge statutory interest of 8% plus the Bank of England base rate on overdue business-to-business invoices, so 11.75% a year with the base rate at 3.75%. Interest is simple daily interest from the day after the due date: invoice amount × annual rate ÷ 365 × days overdue. You can also add fixed compensation per invoice: £40 under £1,000, £70 up to £9,999.99 and £100 from £10,000.
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 3.75% was last checked on 8 October 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.
Get the Late Payment Chase Pack
Everything to chase the money without writing a word from scratch: four escalating letters in Word (friendly reminder, firm reminder, statutory interest notice and letter before action) plus an aged debtors tracker in Excel that works out days overdue, interest and compensation per invoice automatically. Enter your details and the zip downloads immediately.
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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 3.75%, that is 11.75% 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 11.75% works out at £117.50 a year, which is about 32p 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.
Assumptions and limits
- Business-to-business debts only. It does not apply to invoices sent to consumers.
- If your contract sets its own late payment interest, that normally applies instead of the statutory rate.
- The law fixes the base rate for six months at a time: the rate in force on 31 December applies to interest that starts running between 1 January and 30 June, and the rate on 30 June applies from 1 July to 31 December. Enter that rate, which is not always today’s. Bank Rate has been 3.75% since 18 December 2025, so 3.75% is right for interest that started running in 2026.
- Interest is simple, not compound, and the calculator counts days from the due date you enter to the date you choose.
- General information, not legal advice.
Sources
- Late commercial payments: charging interest and debt recovery (GOV.UK): when a commercial payment counts as late.
- Interest on late commercial payments (GOV.UK): statutory interest of 8% plus the Bank of England base rate.
- Claim debt recovery costs on late payments (GOV.UK): the £40, £70 and £100 fixed sums.
- Late Payment of Commercial Debts (Interest) Act 1998 (legislation.gov.uk): the Act that creates the right to interest.
- Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002 (legislation.gov.uk): sets the rate at 8% over the base rate in force on the previous 30 June or 31 December.
- Interest rates and Bank Rate (Bank of England): the current Bank Rate and the date it last changed.
- Interest calculator (Small Business Commissioner): an official calculator. It works from the invoice date and your payment terms. What this page adds is an editable base rate, a calculate-to date you choose, the daily figure and the working written out.
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