Late Payment Interest Calculator
Estimate the statutory interest and fixed compensation you may be able to claim on a late commercial invoice.
The amount still owed, before interest.
Usually today, or the date you expect to be paid.
Leave blank to use the verified statutory rate for the period the debt became late in. Enter a rate only to override it.
£40, £70 or £100 depending on the size of the debt.
What is statutory late-payment interest?
If another business pays your invoice late, UK law may entitle you to charge interest on what you are owed plus a flat compensation amount. It is intended to cover the cost of being kept out of your money and the trouble of chasing it.
It does not apply automatically to every unpaid invoice, and it is not legal advice. Use the figure as a basis for a polite reminder or a conversation with your accountant or solicitor.
What this means
Enter the invoice amount, the date payment fell due and the date you are calculating to. Whether a particular debt qualifies depends on the contract and the circumstances, so treat this as a starting point for a conversation rather than a settled figure.
Quick answers
- What is the current statutory late payment interest rate?
- 11.75% a year for debts that became late during 2026 — the Bank of England reference rate of 3.75% plus the fixed 8 percentage point margin set by law.
- What is the Bank of England reference rate?
- The Bank Rate published by the Bank of England on 31 December and 30 June each year, used as the base for statutory late-payment interest for the following six months.
- Why is 8 percentage points added?
- The Late Payment of Commercial Debts (Interest) Act 1998 fixes the statutory margin at 8 percentage points above the reference rate, to compensate a business for being kept out of its money.
- What are the fixed compensation amounts?
- £40 for debts under £1,000, £70 for debts from £1,000 up to £9,999.99, and £100 for debts of £10,000 or more — one flat amount per late invoice.
- How are days overdue counted?
- As actual calendar days from the day after the due date up to the date you are calculating to, including weekends and leap days.
Keep clear records before pursuing a late payment
Keep copies of the invoice, the agreed payment terms, the due date, any correspondence about payment and your calculation of the interest claimed.
Whether a particular debt qualifies depends on the contract and the circumstances, so treat this figure as a starting point rather than a settled entitlement.
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How we calculated it
Days overdue are actual calendar days between the due date and the calculation date, including leap days. Nothing accrues if the calculation date is on or before the due date.
Statutory interest = debt × annual rate ÷ 365 × days overdue. The statutory annual rate is the Bank of England reference rate for the relevant six-month period plus 8 percentage points.
Fixed compensation is a single flat amount per late invoice: £40 for debts under £1,000, £70 for debts from £1,000 up to £9,999.99, and £100 for debts of £10,000 or more.
Assumptions
The debt is a qualifying business-to-business commercial debt, no contractual interest rate displaces the statutory rate, no part payment has been made, and one flat compensation amount applies to the invoice. VAT-inclusive or VAT-exclusive is your choice — enter the amount actually owed. This calculator is information only and is not legal advice.
How this calculator works
The Late Payment of Commercial Debts (Interest) Act 1998 gives UK businesses a right to charge interest and a fixed sum when another business pays a commercial invoice late. Interest runs from the day after payment was due until the day it is paid.
The rate is set twice a year and stays fixed for the whole period a debt becomes late in. It is the Bank of England reference rate on 31 December or 30 June, plus 8 percentage points.
Not every unpaid invoice qualifies. Consumer debts are outside the Act, and a contract can set a different remedy provided it is a substantial one. If the amount matters, take advice before sending a formal demand.
If late payment is a recurring problem, it is worth also looking at your cash flow runway to see how exposed the business is while invoices sit unpaid.
Worked examples
£800 invoice, 30 days overdue
At the 2026 statutory rate of 11.75% a year, daily interest is £800 × 11.75% ÷ 365 = £0.26. Over 30 days that is £7.73. Because the debt is under £1,000, fixed compensation of £40 also applies, giving a total claim of £847.73.
£5,000 invoice, 30 days overdue
Daily interest is £5,000 × 11.75% ÷ 365 = £1.61, so 30 days comes to £48.29. The debt falls in the £1,000–£9,999.99 band, so £70 fixed compensation applies. The total claim is £5,118.29.
£15,000 invoice, 30 days overdue
Daily interest is £15,000 × 11.75% ÷ 365 = £4.83, so 30 days comes to £144.86. Because the debt is £10,000 or more, £100 fixed compensation applies, giving a total claim of £15,244.86.
Key terms explained
- Statutory interest
- The interest a business is entitled to charge on a late commercial payment under the Late Payment of Commercial Debts (Interest) Act 1998, calculated as the debt amount × annual rate ÷ 365 × days overdue.
- Reference rate
- The Bank of England Bank Rate published on 31 December or 30 June, used as the base figure for the statutory interest rate for the following six-month period.
- Commercial debt
- Money owed between businesses (or a business and a public authority) for goods or services supplied under a contract. Debts owed by consumers are not covered by the Act.
Common mistakes
Assuming every unpaid invoice qualifies
The Act only covers commercial debts between businesses or public authorities. Consumer debts are excluded, and a contract term setting a different, substantial remedy can replace the statutory one.
Charging fixed compensation per day rather than per invoice
The £40, £70 or £100 compensation is a single flat amount for the whole invoice, not something that accrues daily alongside interest.
Using today's Bank Rate instead of the rate for the relevant period
The statutory rate is fixed for the six-month period in which the debt became late — either the rate set on 31 December or on 30 June — and does not move if the Bank of England changes rates mid-period.
Miscounting the days overdue
Interest runs from the day after the due date, not from the due date itself, and nothing accrues at all if the calculation date is on or before the due date.
Common questions
What is the statutory late payment interest rate?
It is the Bank of England reference rate plus 8 percentage points. The reference rate used is the one in force on 30 June (for debts becoming late between July and December) or 31 December (for debts becoming late between January and June), and it stays fixed for that whole six-month period.
What is the current statutory rate?
For debts that became late at any point in 2026, the verified Bank of England reference rate is 3.75%, giving a statutory rate of 11.75% a year for both the January-to-June and July-to-December periods. You can still enter a different rate to override this for a historical or unusual case.
Can I claim compensation as well as interest?
Yes. On a qualifying late commercial debt you can claim a fixed sum in addition to interest: £40 for debts under £1,000, £70 for debts from £1,000 to just under £10,000, and £100 for debts of £10,000 or more. It is one fixed sum per late invoice, not per day.
Does every unpaid invoice qualify?
No. The Act covers commercial debts between businesses or public authorities, not consumer debts. A contract may also set its own remedy for late payment, and if that remedy is substantial it can replace the statutory one. Circumstances such as a genuine dispute over the goods or services can also affect entitlement.
When does interest start running?
From the day after the agreed payment date. If no date was agreed, the default is 30 days after the later of delivery or the invoice being received. This calculator uses the due date you enter, so put in the date payment was actually due.
Do I have to type the interest rate in?
No. For debts that became late during 2026 the calculator uses the verified Bank of England reference rate of 3.75%, giving a statutory rate of 11.75% a year for both the January to June and July to December periods. You can still type a rate in to override it for a historical debt or an unusual case.
How are days overdue calculated?
As actual calendar days between the due date and the date you are calculating to, including weekends and leap days. If the calculation date is on or before the due date, no interest has accrued yet.
Can a contract set a different interest rate?
Yes, provided it gives a 'substantial remedy' for late payment. If a contract term is not a substantial remedy, the statutory rate and compensation apply regardless of what the contract says.
What records should I keep?
Keep the original invoice, proof of when it was sent and received, the agreed or default payment terms, and any correspondence about payment. These support your calculation if the debtor disputes the amount claimed.
Is this legal advice?
No. This calculator gives an estimate based on the statutory rules and the figures you enter. Whether a specific debt qualifies, and how to pursue it, depends on the facts, so speak to an accountant or solicitor if a significant amount is at stake.
Sources
- Late Payment of Commercial Debts (Interest) Act 1998 — legislation.gov.uk
- Late commercial payments: charging interest and debt recovery — GOV.UK
- Official Bank Rate history — Bank of England
Last reviewed: 7 September 2026. This calculator is information only and is not tax, accounting or financial advice.