Late Payment Interest Calculator
Statutory interest (8% + Bank of England base rate) and fixed compensation on overdue UK business invoices.
Statutory rate = 8% + base rate (12.00%)
What You Can Claim
B2B debts only, under the Late Payment of Commercial Debts (Interest) Act 1998. Contractual terms take precedence if they provide a substantial remedy.
Late Payment — FAQs
What is the statutory interest rate on late payments in the UK?
Under the Late Payment of Commercial Debts (Interest) Act 1998, businesses can charge 8% plus the Bank of England base rate on overdue B2B invoices. Interest accrues daily from the day after the payment was due until the day it is paid.
How much compensation can I charge for a late invoice?
On top of interest, you can claim fixed compensation per invoice: £40 for debts under £1,000, £70 for debts from £1,000 to £9,999.99, and £100 for debts of £10,000 or more. Reasonable recovery costs beyond the fixed sum can also be claimed.
How do I calculate late payment interest on an invoice?
Multiply the invoice amount by (8% + base rate), divide by 365 to get the daily rate, then multiply by the number of days overdue. For a £5,000 invoice 30 days late at a 4% base rate: £5,000 × 12% ÷ 365 × 30 ≈ £49.32, plus £70 compensation.
Does statutory interest apply to consumer invoices?
No — the Act only covers business-to-business contracts. Consumer debts follow the contract terms or, if pursued through court, the County Court judgment rate of 8% simple interest.
When does statutory interest start accruing?
From the day after the agreed payment due date. If no payment terms were agreed, it defaults to 30 days after delivery of goods/services or 30 days after the invoice was issued, whichever is later.
Can I still charge interest if my contract has different terms?
Only if the contract provides a 'substantial remedy' for late payment — contractual interest below statutory levels can be ruled void. Most businesses can simply rely on the statutory rate instead of drafting their own.
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