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Statutory interest · Late Payment Act 1998

Late payment interest calculator

Work out the interest and fixed compensation you can add to an overdue UK business invoice — the amounts set by law, no contract clause needed.

The unpaid amount owed to you.
The date the invoice should have been paid.
8% + BoE base rate (3.75% at 30 Jun 2026). Editable.
Before the next invoice, read how they actually pay.

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What the law lets you charge

Under the Late Payment of Commercial Debts (Interest) Act 1998, a business paid late by another business can add two things to the debt, automatically — you do not need a clause in your contract:

1. Statutory interest — 8% a year plus the Bank of England base rate, running from the day after payment was due until it is paid. With the base rate at 3.75% (set 30 June 2026) that is 11.75% a year. The 8% is fixed by the 1998 Order; the base-rate part is reset each 30 June and 31 December, so the total moves over time.

2. Fixed compensation — a flat sum per overdue invoice, on top of the interest, to cover the cost of chasing:

Debt under £1,000£40
Debt of £1,000 to £9,999.99£70
Debt of £10,000 or more£100

Rates and compensation bands: GOV.UK — charging interest on commercial debt. Base rate: Bank of England.

How it is worked out

The interest is a daily figure: the invoice amount, times the annual rate, divided by 365, times the number of days the payment is late. So a £5,000 invoice paid 30 days late at 11.75% earns about £48 in interest, plus £70 fixed compensation — £118 in all. The calculator above does this for your figures.

Common questions

How much interest can I charge on a late invoice?
On a B2B invoice, 8% a year plus the Bank of England base rate from the day after it was due, plus a fixed £40 / £70 / £100 per invoice by debt size. Set by the Late Payment Act 1998 and applied automatically.
What is the statutory rate right now?
11.75% a year — 8% plus the 3.75% base rate set on 30 June 2026. It is reset each 30 June and 31 December.
Do I need a clause in my contract?
No. The interest and compensation apply by law whether or not your contract mentions them, unless the contract sets its own substantial remedy.
Can I claim the compensation as well as the interest?
Yes — the fixed sum is per overdue invoice and is on top of the interest.
Does this cover consumer invoices?
No — only business-to-business commercial debts. Invoices to consumers are not covered.
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