UK Late Payment Interest Calculator
Total you can charge
£108.63
You can add this to the outstanding invoice, bringing the total owed to £4,108.63.
- Interest at 11.75% a year
- £38.63
- Statutory compensation
- £70.00
- Total
- £108.63
UK statutory interest: Bank of England base rate 3.75% (the rate in force on 30 June 2026) plus 8%, under the Late Payment of Commercial Debts (Interest) Act 1998. The statutory rate is fixed for the six-month period in which the debt became late.
This uses the rate for the current six-month period. A debt that became late in an earlier period is charged at that period’s rate.
How this is calculated
Unlike the United States, the United Kingdom gives you a statutory right to charge interest on a commercial debt even when your contract says nothing about it. Under the Late Payment of Commercial Debts (Interest) Act 1998 the rate is the Bank of England base rate plus eight percentage points, fixed for the six month period in which the debt became late, and you may also claim a fixed sum in compensation for the cost of recovering it. That sum is forty pounds for debts under one thousand pounds, seventy pounds for debts of one thousand pounds up to but not including ten thousand, and one hundred pounds for debts of ten thousand or more. Interest is accrued as simple daily interest on the unpaid amount. This page shows the base rate it used and the thirtieth of June or thirty-first of December that rate is read from, so you can check the figure against the Bank of England rather than taking it on trust.
Worked example
With a base rate of 3.75% the statutory rate is 11.75%. That rate on £4,000.00 is £470.00 a year, and 30/365 of that is £38.63. A debt of £4,000.00 falls in the middle compensation band, adding a fixed £70.00. The client therefore owes £4,108.63 in total.
Inputs: £4,000.00 unpaid, 30 days overdue
Result: £108.63 — £38.63 of interest plus £70.00 statutory compensation
What this assumes
- The base rate shown is the one in force on the date given. Check it against the Bank of England if the debt became late in an earlier period, because the statutory rate is fixed by six month period.
- Interest is simple daily interest, not compounded.
- This applies to commercial debts between businesses, not to consumer debts.
Questions
- Do I need a late payment clause in my contract to charge this?
- No. Statutory interest applies to commercial debts by default. A contract can set its own rate instead, but it cannot remove the right entirely unless it provides a substantial remedy in its place.
- Can I claim the compensation as well as the interest?
- Yes. The fixed sum is compensation for the cost of recovering the debt and is claimable in addition to interest, once per unpaid invoice.
- Is this legal advice?
- No. It is a calculator that applies the statutory formula to the figures you enter. For a disputed debt, or one where the contract sets different terms, take proper advice before relying on the number.