Tools

Late payment interest calculator

If a business customer pays an invoice late, UK law lets you charge interest at the Bank of England base rate plus 8%, plus a fixed compensation sum. Enter the invoice amount and dates to see what is owed, and copy the wording for your reminder.

The reference rate is the base rate on 31 December for debts due between 1 January and 30 June, and on 30 June for debts due between 1 July and 31 December. The default is the rate on 30 June 2026. Check the current Bank Rate.

What is owed

Days overdue
0
Annual rate
—
Interest per day
£0.00
Interest to date
£0.00
Fixed compensation
£0
Total now due
£0.00

Wording for your reminder

Enter an amount and dates to generate the wording.

How statutory interest works

How much interest can I charge on a late invoice in the UK?

The Late Payment of Commercial Debts (Interest) Act 1998 applies to business-to-business contracts for goods or services where the contract does not set its own interest rate. It does not apply to consumers. Interest runs from the day after the payment was due, or 30 days after the invoice or delivery if no date was agreed, at 8 percentage points above the Bank of England base rate.

What is the fixed compensation for late payment?

On top of interest you can claim a fixed sum for each late invoice: £40 for debts under £1,000, £70 for debts from £1,000 to £9,999.99, and £100 for debts of £10,000 or more. If your reasonable recovery costs are higher than the fixed sum, you can claim those too.

Which Bank of England base rate do I use?

The rate is fixed for six months at a time. For invoices that fell due between 1 July and 31 December, use the base rate that applied on 30 June. For invoices due between 1 January and 30 June, use the rate on the previous 31 December. For a debt that stays unpaid across a boundary, the rate changes at the boundary. This calculator uses one rate for the whole period, which is fine for most reminders; for a court claim, split the periods.

Do I have to state late payment terms on the invoice?

No. The right exists in law whether or not the invoice mentions it. Stating it on the invoice, which the invoice generator does by default, makes the conversation easier.

Can I charge late payment interest to a consumer?

No. The Act covers business-to-business contracts only. For a consumer customer, any interest has to come from your contract terms and must be fair under consumer law.

This is general information, not legal advice. See GOV.UK: late commercial payments.