How is late payment interest calculated?

Under UK law, you can charge statutory interest at 8% plus the Bank of England base rate on the outstanding amount, from the day the payment becomes overdue.

What compensation can I claim for late payment?

You can claim fixed compensation of £40 for debts under £1,000, £70 for debts between £1,000-£9,999.99, and £100 for debts over £10,000.

Free Late Invoice Calculator

Calculate interest and compensation owed on late invoices under UK law

Calculate Late Payment Interest & Compensation

Invoice Amount (£)

Bank of England Base Rate (%)

Invoice Date

Payment Due Date

Payment Date (leave blank for today)

About Late Payment Interest & Compensation

Statutory Interest

Under the Late Payment of Commercial Debts (Interest) Act 1998, businesses have the statutory right to claim interest on late payments. The interest rate is 8% plus the Bank of England base rate.

Fixed Compensation

You can also claim fixed compensation for the cost of recovering the debt:

£40 for debts under £1,000
£70 for debts between £1,000 and £9,999.99
£100 for debts of £10,000 or more

When Does Interest Start?

Interest starts accruing the day after the invoice becomes overdue. If you agreed payment terms (e.g., 30 days), interest starts after that period. If no terms were agreed, it starts 30 days after the invoice date or delivery of goods, whichever is later.

Your Rights

You have the legal right to claim this interest and compensation even if it's not mentioned in your contract. However, if your contract specifies a higher rate of interest, you can use that instead (known as "substantial contractual remedy").

Note: This calculator is for business-to-business transactions only. Different rules apply for consumer transactions. The calculations provided are estimates for guidance purposes. For legal advice, please consult a solicitor.