Late Payment Interest Calculator (UK)
Yes - UK businesses can charge statutory interest at 8% above the Bank of England base rate, plus fixed compensation on qualifying overdue commercial invoices.
Statutory summary
Invoice chase figures in one pass.
8% + base
UK statutory annual rate
£40-£100
Fixed compensation tiers
Client-side
No account needed
UK statutory mode
Calculate the legal interest and recovery fee.
Auto-selected base rate: 3.75%
Rates reviewed 2026-06-06. Override the base rate if your debt falls outside the bundled table.
Custom rate mode
Use a contractual or non-UK rate.
How this calculator works
Statutory late-payment interest is simple interest.
UK statutory interest for business-to-business commercial debt is calculated as the debt multiplied by the statutory annual rate, divided by 365, then multiplied by the number of days late. The statutory annual rate is the relevant Bank of England reference rate plus 8%.
The reference rate is fixed by the date the debt became overdue. The rate in force on 31 December applies to debts becoming overdue from 1 January to 30 June. The rate in force on 30 June applies to debts becoming overdue from 1 July to 31 December.
The fixed compensation amount is added once per overdue invoice. This calculator does not add VAT to interest or compensation and does not replace legal advice.
Fixed compensation
Debt recovery costs by invoice size
These sums are claimed on top of statutory interest and the original invoice amount. They are charged once for each qualifying overdue payment.
| Debt amount | Fixed compensation |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
Reference-rate table
Bundled Bank of England reference rates
The calculator auto-selects the relevant reference rate from this table, then lets you override the base rate. Rates were reviewed on 2026-06-06; future Bank Rate changes should be checked against the Bank of England source.
| Overdue period | Reference date | BoE base rate | Statutory rate |
|---|---|---|---|
| 2022-01-01 to 2022-06-30 | 2021-12-31 | 0.25% | 8.25% |
| 2022-07-01 to 2022-12-31 | 2022-06-30 | 1.25% | 9.25% |
| 2023-01-01 to 2023-06-30 | 2022-12-31 | 3.5% | 11.5% |
| 2023-07-01 to 2023-12-31 | 2023-06-30 | 5% | 13% |
| 2024-01-01 to 2024-06-30 | 2023-12-31 | 5.25% | 13.25% |
| 2024-07-01 to 2024-12-31 | 2024-06-30 | 5.25% | 13.25% |
| 2025-01-01 to 2025-06-30 | 2024-12-31 | 4.75% | 12.75% |
| 2025-07-01 to 2025-12-31 | 2025-06-30 | 4.25% | 12.25% |
| 2026-01-01 to 2026-06-30 | 2025-12-31 | 3.75% | 11.75% |
FAQ
Late payment interest questions
Can I charge interest on late invoice payments?
Yes, UK businesses can usually charge statutory interest on late business-to-business commercial payments. You cannot claim statutory interest where the contract already sets a different interest rate, so check the invoice terms and agreement first.
How much interest can I charge for late payment?
For UK business-to-business transactions, statutory interest is 8% above the Bank of England base rate. The reference rate is fixed by the six-month window when the debt became overdue.
How is late payment interest calculated?
Statutory interest is simple interest. Multiply the debt by the statutory annual rate, divide by 365 to get a daily amount, then multiply by the number of days late.
Can a small business or contractor charge interest on late payments?
Yes. The statutory late-payment regime applies to business-to-business debts, so small businesses, freelancers, consultants, contractors, and agencies can use it when the debt qualifies.
Do you charge VAT on late payment interest?
No. Late payment interest and fixed compensation are not treated as VATable supplies, so this calculator does not add VAT to either amount.
What compensation can I claim?
You can claim a fixed sum once per overdue invoice: £40 for debts up to £999.99, £70 for debts from £1,000 to £9,999.99, and £100 for debts of £10,000 or more.
When does an invoice become late?
If you agreed payment terms, the invoice becomes late after the agreed due date. If no payment terms were agreed, the default is usually 30 days after the later of the invoice date or the date the goods or service were delivered.
How far back can I claim?
For simple contract debts in England, Wales, and Northern Ireland, court action is generally subject to a six-year limitation period. This can depend on facts such as acknowledgements, payments, and jurisdiction, so get legal advice for older debts.
Sources
Methodology and legal references
This page links to the public sources used for the calculator methodology. It is an estimate, not legal advice.
Related tools