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    Free tool · UK

    Late payment interest calculator

    Updated 27 October 2026 · General information for UK businesses, not legal advice

    Enter the amount, the base rate on the relevant 30 June or 31 December, and the due date.

    How the calculation works

    1. Find the rate. Take the Bank of England base rate on the reference date and add 8%.
    2. Work out daily interest. Invoice amount × annual rate ÷ 365.
    3. Multiply by days overdue. Count from the day after payment was due.
    4. Add fixed compensation. £40, £70 or £100 per invoice, depending on its size.

    When payment is due

    If your contract sets a payment date, that date applies. If it doesn't, payment is due 30 days after the customer receives the invoice or the goods or services, whichever is later. Agreed terms between businesses are generally capped at 60 days unless they are fair to both sides.

    Putting it in your chasing

    Mention statutory interest in your reminder and in your letter before action. State the rate, the daily amount and the compensation you are claiming, so the customer can see exactly what the balance will become.

    Common questions

    What interest can I charge on a late business invoice?

    Under the Late Payment of Commercial Debts (Interest) Act 1998 you can claim statutory interest at 8% a year above the Bank of England base rate, unless your contract sets a different, substantial rate. It applies to business-to-business debts.

    Which base rate do I use?

    The reference rate is the Bank of England base rate in force on 30 June (for debts that become overdue July–December) or 31 December (for debts that become overdue January–June). It stays fixed for that debt.

    What is fixed compensation?

    On top of interest you can claim a fixed sum for each invoice: £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. You may also claim reasonable extra recovery costs.

    Can I claim this from consumers?

    No. The Act only covers debts between businesses, including sole traders and the public sector acting as a business customer.

    Does claiming interest damage the relationship?

    It can. Many businesses use the right to statutory interest as leverage and waive it if the invoice is paid promptly. Whether to claim is your decision.

    Unpaid business invoices?

    HeyEngage Collections handles the chasing and keeps you informed. Fees agreed before work starts. No collection, no fee on eligible cases.

    Get a free case review