Free tool · UK
Late payment interest calculator for UK businesses
Work out the statutory interest and the fixed compensation you can claim on a late business invoice under the Late Payment of Commercial Debts (Interest) Act 1998. Free, no sign-up.
How the calculation works
- 1
The rate
Statutory interest is 8% a year on top of the Bank of England Bank Rate on the reference date: 31 December for debts that fall due from January to June, 30 June for debts due from July to December. The rate is fixed once the debt falls due.
- 2
The formula
Interest = invoice amount × (8% + Bank Rate) × days late ÷ 365. It is simple interest, never compounded, and runs from the day after the due date until you are paid.
- 3
Fixed compensation
On top of interest you can claim a fixed sum for each late invoice: £40 under £1,000, £70 from £1,000 to £9,999.99 and £100 from £10,000. Reasonable recovery costs beyond that sum can also be claimed.
- 4
When it applies
Contracts between businesses, or between a business and a public authority, for goods or services. It does not apply to consumers. If your contract sets its own late-payment interest, that rate must be a substantial remedy for the delay.
Worked example
A £5,000 invoice due on 15 January 2026 and paid 15 April 2026 is 90 days late. The Bank Rate on 31 December 2025 was 3.75%, so the rate is 11.75%. Interest is £144.86 and the fixed compensation is £70.00: £214.86 in total.
Sources
- [1]legislation.gov.uk — Late Payment of Commercial Debts (Interest) Act 1998
- [2]GOV.UK — Late commercial payments: charging interest and debt recovery
- [3]Bank of England — Official Bank Rate history
Sources checked 20 October 2026. This is an estimate: check the current text of each provision and your own contract before you claim.
Questions