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Late payment interest calculator

Under the UK Late Payment of Commercial Debts (Interest) Act, a business paid late by another business can claim interest at 8% above the Bank of England base rate, plus fixed compensation. Enter the invoice and the dates to see what you can claim.

Interest

Statutory interest is the base rate + 8%.

Check the base rate on the reference date: 30 June for debts due July to December, 31 December for debts due January to June.

Interest and compensation£164.68£94.68 interest + £70.00 fixed compensation on £4,800.00
Unpaid debt£4,800.00
Days late7 Aug 2026 to 6 Oct 202660 days
Interest rateBase rate 4% + 8%12% a year
Daily interestDebt × rate ÷ 365£1.58
Interest for 60 days£94.68
Fixed compensationDebt £1,000 to £9,999.99£70.00
You can claim£164.68
Debt plus claim£4,964.68

Statutory interest is simple interest at the Bank of England base rate on the reference date (30 June or 31 December) plus 8%. It applies to business-to-business debts. You may also claim reasonable debt recovery costs above the fixed sum.

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How to use the late payment interest calculator

  1. Enter the unpaid invoice amount.
  2. Enter the date payment was due and the date it was paid (or today).
  3. Check the Bank of England base rate on the reference date, or switch to your contract rate.
  4. Read the interest, the fixed compensation and the total claim.

The statutory interest formula

Daily interest = debt × (base rate + 8%) ÷ 365. Interest = daily interest × days late. Days late run from the day after payment was due until the day it is paid.

DebtDays lateRateInterestCompensationTotal claim
£750.003012%£7.40£40£47.40
£4,800.006012%£94.68£70£164.68
£25,000.009012%£739.73£100£839.73

When payment is late

If no payment date was agreed, a payment is late 30 days after the customer received the invoice or the goods or services, whichever is later. Agreed terms between businesses can be up to 60 days, and longer only if that is not grossly unfair; public bodies must pay within 30 days.

Put your payment terms and a note about statutory interest on every invoice. It is often enough to get invoices paid on time.

Questions

How is statutory late payment interest calculated?

It is simple interest: debt × (base rate + 8%) × days late ÷ 365. On a £4,800 invoice 60 days late with a 4% base rate, that is £4,800 × 12% × 60 ÷ 365 = £94.68.

Which base rate do I use?

The Bank of England base rate in force on the reference date: 30 June for debts that fell due between 1 July and 31 December, and 31 December for debts that fell due between 1 January and 30 June. It stays fixed for that debt even if the base rate changes.

How much fixed compensation can I claim?

£40 for a debt under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. You can also claim reasonable recovery costs above that amount.

Who can claim statutory interest?

Businesses (including sole traders) owed money by another business or a public sector body under a contract for goods or services. It does not apply to sales to consumers.

What if my contract sets its own late payment interest?

A contract can set its own rate, but it must be a substantial remedy. If it is not, the statutory rate applies instead. Use the contract rate option to calculate a contractual rate.

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