Late payment interest calculator
Enter the base rate in force when the debt became overdue. Check the Bank of England website.
Applies to business-to-business debts under the Late Payment of Commercial Debts (Interest) Act 1998, unless your contract sets a substantial alternative remedy.
- Statutory interest rate12.00%
- Interest per day£1.64
- Interest to date£49.32
- Fixed compensation£70
- Invoice plus interest and fee£5,119.32
Claimable on top of the invoice
£119.32
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How does the late payment interest calculator work?
UK businesses can charge interest on overdue business-to-business invoices at 8% above the Bank of England base rate, plus fixed compensation of £40 for debts under £1,000, £70 for £1,000 to £9,999.99 and £100 for £10,000 or more. Interest runs daily from the day after the due date.
How it works
When it applies
The Late Payment of Commercial Debts (Interest) Act 1998 applies to commercial debts between businesses, unless your contract provides a substantial alternative remedy. It does not apply to consumers.
How interest is calculated
Interest is the debt multiplied by the annual rate (base rate plus 8%) multiplied by the number of days overdue divided by 365. The base rate used is the one in force on the day the debt became overdue.
A practical approach
Most businesses use the right to charge interest as leverage rather than collecting it. Stating it on your invoices and terms, and sending a reminder, often brings payment without a dispute.
Rates used, 2026/27
- Statutory interestBase rate + 8%
- Debt under £1,000£40 compensation
- £1,000 to £9,999.99£70 compensation
- £10,000 or more£100 compensation
Last checked November 2026 against GOV.UK: Late commercial payments. General information, not tax advice.
A worked example
A £5,000 invoice 30 days overdue with a 4% base rate accrues £49.32 interest plus £70 compensation, so £119.32 can be claimed on top of the invoice.
Questions about this calculator
Do I have to charge interest?
No, it is your right, not an obligation. Many businesses state it in their terms and apply it selectively.
What if my contract has its own late fee?
A contractual remedy can replace the statutory one only if it is substantial and fair. Otherwise the statutory right still applies.
Can you chase invoices for me?
Yes. Our invoicing and credit control service sends reminders and chases overdue payments for a flat £15 an hour.
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