UK Late Payment Interest Calculator

Work out your statutory entitlement on an overdue commercial invoice: 8% above the Bank of England base rate in simple interest, plus fixed compensation of £40–£100 per invoice. Free, instant, nothing stored.

Overdue invoice details

Total now owed

£2,606.99

45 days past due

Original debt	£2,500.00
Statutory interest rate	12% (8% + base)
Interest accrued	£36.99
Fixed compensation	£70.00

How statutory interest is calculated

Under the Late Payment of Commercial Debts (Interest) Act 1998 (as amended by EU-derived regs retained in UK law), a business-to-business debt that is paid late carries simple interest at 8% per year above the Bank of England base rate for the late period:

Interest = Debt × (base rate + 8%) × (days late ÷ 365)

Compensation = £40 / £70 / £100 depending on debt size — per invoice, once

Unlike contractual late fees, you don't need anything in your terms to claim it — the right exists by law for commercial debts. On a £2,500 invoice 45 days overdue with a 4% base rate: £2,500 × 12% × 45/365 = £36.99 interest, plus £70 compensation, giving a new total of £2,606.99.

The compensation bands (most people miss these)

Almost every freelancer knows about the 8%; far fewer claim the fixed sum they're also entitled to per late invoice:

Debt under £1,000 → £40
Debt £1,000 – £9,999 → £70
Debt £10,000 or more → £100

Ten small late invoices are worth £400 in compensation alone — this is genuinely free money the law gives you for being paid late.

Making the claim stick

Interest runs from the day after the due date in your terms; with no agreed terms, the law assumes 30 days after invoice delivery. Put the entitlement in writing the first time you chase: name the Act, state the daily-accruing rate, and give the calculated total (this calculator's output). A specific number demands attention that "please pay" doesn't. If it still isn't paid, the statutory claim plus your dated chase log supports a Money Claim Online or county court action — and reasonable debt-collection costs on top.

Prevention still wins: deposits, milestone billing, and 14-day terms for new clients shrink what a late payer can hold hostage. Send invoices with an explicit due date — our free invoice generator adds one automatically.

Frequently asked questions

What is the UK statutory late payment interest rate?

Under the Late Payment of Commercial Debts (Interest) Act 1998, business-to-business debts that are paid late accrue simple interest at 8% per year above the Bank of England base rate that applied during the late period. You can claim it even if your contract says nothing about late payment.

What fixed compensation can I claim for a late invoice in the UK?

In addition to statutory interest, UK businesses can claim fixed compensation per overdue invoice: £40 for debts under £1,000, £70 for debts of £1,000 to £9,999, and £100 for debts of £10,000 or more. The amount is based on the original debt, not the interest.

From what date does late payment interest start running?

Interest runs from the day after your agreed payment deadline. If no terms were agreed, the default is 30 days after delivery of the invoice or the goods/services, whichever is later. Public-sector bodies normally have 30 days.

Can sole traders claim statutory late payment interest?

Yes. The legislation covers commercial debts between businesses, and a sole trader counts as a business for these purposes — including when the debtor is a company or a public body. Consumer debts are not covered.