Late Payment Interest Calculator
Work out exactly how much interest and statutory compensation you can legally add to an overdue B2B invoice — updated to today's date.
How late payment interest is calculated
Under the Late Payment of Commercial Debts (Interest) Act 1998, a UK business supplying goods or services to another business can charge interest on invoices that are not paid on time. The statutory rate is the Bank of England base rate plus eight percentage points, and it is fixed for six-month periods.
Interest runs on a daily basis from the day after the agreed payment date until the day the debt is settled. The daily figure is the invoice value multiplied by the annual rate, divided by 365. On top of that you may add a one-off fixed sum as compensation for recovery costs, which rises with the size of the debt.
Frequently asked questions
Can I charge interest if my contract says nothing about late payment?
Yes. Where a commercial contract is silent on late payment, the statutory right to interest applies automatically. If the contract does set a rate, that rate normally applies instead, provided it is a substantial remedy.
How much statutory compensation can I claim?
The fixed sum depends on the size of the debt: £40 for debts under £1,000, £70 for debts from £1,000 to £9,999.99, and £100 for debts of £10,000 or more. It is claimable once per unpaid invoice.
When does the clock start if no due date was agreed?
Where no payment date was agreed, the default period is 30 days from either the delivery of the goods or services or the receipt of the invoice, whichever is later.
Does this apply to consumers?
No. The Act covers business-to-business transactions only. Debts owed by private individuals are treated differently.