Free tool
Late payment interest calculator
Enter the unpaid invoice, the current Bank of England base rate and how many days it is overdue. You'll get the statutory interest, the fixed compensation you can add, and the total you're entitled to claim.
Check today's base rate at bankofengland.co.uk. Statutory interest is that rate plus 8%.
- Statutory interest rate
- 12.00%
- Interest per day
- £0.79
- Interest over 45 days
- £35.51
- Fixed compensation
- £70.00
- Total you can claim
- £2,505.51
What the law actually lets you charge
The Late Payment of Commercial Debts (Interest) Act 1998 gives you an automatic right to interest on overdue business-to-business invoices. You don't need it written into your contract — it applies by default, and it can't be signed away unless the contract offers a genuinely substantial alternative remedy.
The rate is the Bank of England base rate plus 8%, calculated daily from the day after the debt became due. On top of that you can add a fixed compensation sum per invoice, and reasonable costs of recovering the debt if those exceed it.
- Debt under £1,000 — £40 compensation
- Debt of £1,000 to £9,999.99 — £70 compensation
- Debt of £10,000 or more — £100 compensation
Source: GOV.UK — late commercial payments, interest and debt recovery.
When does the clock start?
If you agreed payment terms with the customer, interest runs from the day after those terms run out. If you agreed nothing, the default period is 30 days — starting from the later of the customer receiving your invoice or you finishing the work. Public sector customers work to a 30-day limit that can't be extended.
This is exactly why the date on the document matters. An invoice with no issue date and no payment terms makes the start of the clock arguable, which is the last thing you want if you ever have to push for the money.
Should you actually charge it?
Plenty of trades never invoke it, because they want the repeat work. That's a fair commercial call — but putting the entitlement in your terms and mentioning it in a chase email is often enough on its own. A customer who knows you understand your rights tends to pay sooner than one who thinks the invoice can drift.
A practical order that works: polite reminder at day one overdue, firmer note at day seven referencing your terms, then a formal notice quoting the statutory interest and compensation figure from this calculator.
Frequently asked questions
How much interest can I charge on a late invoice in the UK?
For business-to-business debts you can charge statutory interest of 8% above the Bank of England base rate, running from the day after payment was due until the day it is paid. This applies automatically unless your contract sets a different substantial remedy.
What is the fixed compensation for a late invoice?
On top of interest you can claim a fixed sum per invoice: £40 for debts under £1,000, £70 for debts of £1,000 to £9,999.99, and £100 for debts of £10,000 or more. You can also claim reasonable debt recovery costs above that sum.
Can I charge a consumer late payment interest?
The Late Payment of Commercial Debts (Interest) Act 1998 covers business-to-business contracts, not private householders. For consumer work, interest has to be set out in your own terms and conditions and must be fair and clearly agreed before the work starts.
When does the invoice count as late?
If you agreed payment terms, the debt is late the day after those terms expire. If nothing was agreed, the default is 30 days after the customer receives the invoice, or 30 days after you finished the work, whichever is later.
This calculator is general information, not legal or financial advice. For a disputed or high-value debt, take proper advice before acting.
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