Late payment interest calculator (UK)

How statutory interest is worked out

1. Find the due date. The date you agreed, or 30 days after they got the invoice if you didn't agree one.
2. Pick the rate. 8% plus the Bank of England base rate on the last 30 June or 31 December before interest started. It stays fixed for that debt.
3. Daily interest = amount owed × rate ÷ 365. Simple interest, no compounding.
4. Interest to date = daily interest × days late. This calculator works it out unrounded and rounds the total to the penny.
5. Add the fixed compensation: £40, £70 or £100, once per invoice.

The rate for debts where interest starts from 1 January 2027 depends on the base rate on 31 December 2026, so it isn't in the table yet.

Sources: GOV.UK: interest on late commercial payments · GOV.UK: claim debt recovery costs · GOV.UK: when a payment becomes late · Rate of Interest Order 2002, article 4 · Bank of England: Bank Rate history · Bank of England: current Bank Rate. Rates checked 8 October 2026.

Late payment interest FAQs

How much interest can I charge on a late invoice?

If the customer is a business and your contract doesn't set its own rate, you can charge statutory interest of 8% a year plus the Bank of England base rate. It's simple interest, worked out per day: the debt times the rate, divided by 365, times the number of days late. For debts that went late between 1 July and 31 December 2026 the rate is 11.75% (3.75% + 8%), so a £5,000 invoice paid 45 days late earns £72.43.

Source: GOV.UK: interest on late commercial payments

Which Bank of England base rate do I use?

The rate in force on 30 June is used for debts where interest starts to run between 1 July and 31 December. The rate on 31 December is used when it starts between 1 January and 30 June. Interest starts the day after the payment was due. That rate then stays the same for that debt until it's paid, even if the base rate changes or the debt runs into the next half-year.

Source: Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, article 4 · Bank of England: Bank Rate history

When does an invoice count as late?

On the day after the payment date you agreed. Between businesses that date should usually be within 60 days, unless a longer period is fair to both sides. If you didn't agree a date, the payment is late 30 days after the customer gets the invoice, or 30 days after you deliver the goods or service if that is later.

Source: GOV.UK: when a payment becomes late

How much compensation can I add?

A fixed sum for the cost of chasing the debt: £40 if the debt is up to £999.99, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. You can claim it once per payment, on top of the interest.

Source: GOV.UK: claim debt recovery costs

Can I charge this to a private customer, or if my contract says something else?

No to both. Statutory interest and compensation are for business-to-business debts. If your contract sets a different interest rate for late payment, that applies instead and you can't claim statutory interest. Contracts with public authorities can't use a lower rate.

Source: GOV.UK: interest on late commercial payments

How do I actually claim it?

GOV.UK says to send a new invoice if you decide to add interest. List the original invoice, the days late, the rate and the interest, plus the fixed compensation. Interest keeps adding up each day until the debt is paid.

Source: GOV.UK: interest on late commercial payments

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