Free UK tool
Late Payment Interest Calculator
Work out the statutory interest and fixed compensation owed on a late UK invoice under the Late Payment of Commercial Debts (Interest) Act 1998. Updated for a Bank of England base rate of 3.75%.
How UK late payment interest works
The Late Payment of Commercial Debts (Interest) Act 1998 entitles UK businesses, including sole traders, to claim statutory interest on overdue commercial invoices. Interest is the Bank of England base rate plus 8%, applied daily from the day after the invoice was due. You can also claim a fixed compensation amount that depends on the size of the debt.
Fixed compensation tiers
- Debts under £1,000: £40
- Debts of £1,000 to £9,999.99: £70
- Debts of £10,000 or more: £100
What if my customer is a private consumer?
Statutory interest applies to commercial debts only. For consumer debts you can still claim contractual interest if it is written into your terms, or pursue the debt through the Money Claim Online service.
Do I have to send a warning letter first?
No. Interest accrues from the day after the due date with or without notice. In practice, sending a Letter Before Action that lists the interest and compensation often prompts payment without further action.
This calculator is informational and does not constitute legal advice. If the debt is disputed or large enough to warrant formal proceedings, consult a solicitor.