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Late payment interest calculator

Work out the interest and fixed compensation you can charge a business that pays you late, under the Late Payment of Commercial Debts (Interest) Act 1998.

Bank of England Bank Rate, 3.75%
In force since 18 December 2025 and held at the decision published. Source: Bank of England. The next decision is due.

The invoice total the customer has not paid.
The date agreed on the invoice or contract.
Interest runs up to this date.
Interest rate
Filled in for your due date using the 30 June and 31 December rule. You can change it.

What you can claim

Rate used
Days late
Interest builds at
Interest
Fixed compensation
Interest and compensation

Including the original debt: .

For guidance only, not legal or tax advice.

How statutory late payment interest works

If another business pays you late, the Late Payment of Commercial Debts (Interest) Act 1998 lets you charge interest at 8% above the Bank of England reference rate, plus a fixed sum for the cost of chasing the debt. It applies to business to business sales, not sales to consumers.

The reference rate is fixed for each half year. For interest that starts between 1 July and 31 December, use the Bank Rate in force on 30 June. For interest that starts between 1 January and 30 June, use the rate in force on the previous 31 December. So for debts that became late from 1 July 2026, the rate is 3.75% plus 8%, which is 11.75% a year. The calculator picks the right Bank Rate from your due date.

The sum

The interest is simple, not compound. Annual interest is the debt times the rate. Divide by 365 for the daily figure, then multiply by the number of days late.

Example, £2,400 due on 30 September and paid on 29 October is 29 days late. £2,400 × 11.75% = £282 a year, about 77p a day, so £22.41 interest, plus £70 compensation.

GOV.UK's own worked example rounds the daily figure to the nearest penny before multiplying. We keep the unrounded daily figure, so you may see a few pence of difference.

Fixed compensation

Amount of debtWhat you can charge
Up to £999.99£40
£1,000 to £9,999.99£70
£10,000 or more£100

You can charge it once for each payment, on top of the interest. You can also claim reasonable costs each time you try to recover the debt.

Questions people ask

What is the late payment interest rate in the UK right now?

For debts where interest starts between 1 July and 31 December 2026, it is 11.75% a year, the Bank of England reference rate of 3.75%, plus 8%. Bank Rate has been 3.75% since 18 December 2025.

When does a payment count as late?

After the date you agreed. If you did not agree one, it is late 30 days after the customer receives the invoice or you deliver the goods or service, whichever is later. Agreed terms between businesses are usually no longer than 60 days, unless both sides agree longer terms and they are fair.

Can I charge interest if my contract has its own rate?

If the contract sets its own late payment rate, statutory interest does not apply and the contract rate is used instead. Untick the statutory 8% box and enter the contract rate. You cannot use a lower rate when the customer is a public authority.

How much compensation can I claim?

£40 for debts up to £999.99, £70 for £1,000 to £9,999.99 and £100 for £10,000 or more. You can charge it once per invoice, on top of interest.

Does the rate change if Bank Rate changes while the invoice is unpaid?

No. The rate is fixed by the date the interest starts, using the Bank Rate on the last 30 June or 31 December before that. A later change in Bank Rate does not change interest that is already running.

Can I charge late payment interest to a consumer?

No. The Act covers payments between businesses, and between businesses and the public sector.

Sources

Tools that automate this

Chasing late invoices by hand takes time. These tools send reminders and track what is overdue. Check each one's own page for what its plan includes.

Each line says what the tool is best for. Features change, so check each tool before you buy.

Your figures stay in your browser. Nothing you type is sent to us.

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