Late payment interest calculator
When a business customer pays you late, UK law lets you charge statutory interest plus a fixed compensation sum, with no contract clause needed. Enter the invoice and dates to estimate what you are owed on top.
How it works
For late commercial (business-to-business) payments, you can charge statutory interest of 8% plus the Bank of England base rate, calculated daily from the day the debt became late. On top of the interest you can also claim a one-off fixed compensation sum per late invoice: £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more.
A debt becomes late on your agreed payment date, or (if none was agreed) 30 days after the customer receives the invoice or the goods or service, whichever is later.
How to use the result
The fastest way to use this is in your payment reminder: state the amount, the days overdue, the statutory interest accruing and the fixed sum you are entitled to. Many customers pay promptly once they see the figure is real and rising. You are not obliged to charge it, but the right exists whether or not it is written into your contract, unless your contract sets its own substantial remedy.
Statutory interest is 8% + the Bank of England base rate (3.75% as of June 2026, giving 11.75%). The base rate is reviewed regularly - the next decision was due 18 June 2026 - so check the current rate before relying on a figure, and note the statutory rate is fixed in six-month periods (set on 31 December and 30 June). This is an estimate, not legal advice. Figures verified June 2026 from GOV.UK and the Bank of England.
Frequently asked questions
- What date should I put in the 'Payment due date' box?
- Use your agreed payment date from the invoice or contract. If you never agreed terms, the debt becomes late 30 days after the customer received the invoice or the goods or service, whichever is later, so enter that date. Getting this date right matters, because the tool counts every day from it to work out the interest owed.
- Why does the interest rate show 11.75% and can I change it?
- The rate is statutory interest, which is 8% plus the Bank of England base rate. With the base rate at 3.75% that gives 11.75%. You can edit the base rate field if it has changed. The statutory rate is fixed in six-month periods, set on 31 December and 30 June, so check the current figure before relying on the result.
- What is the 'Fixed compensation' figure and is it separate from the interest?
- It is a one-off sum you can claim per late invoice, on top of the interest. The tool applies £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. It is charged once per invoice, not per day, so it does not grow as the days overdue rise.
- I entered the invoice excluding VAT. Does that matter?
- For an estimate it is fine, as the page notes. The calculator applies the daily interest rate to whatever amount you type, so entering the net figure simply gives a slightly lower estimate than using the gross, VAT-inclusive total. Be consistent, and remember this is an estimate, not legal advice, so treat the output as a guide rather than a final demand.
- How should I actually use the 'Total you can add' figure?
- Put it in your next payment reminder: state the amount, the days overdue, the interest accruing and the fixed sum. Seeing a real, rising figure often prompts payment. You are not obliged to charge it, but the right applies to commercial (business-to-business) invoices without a contract clause, unless your contract already sets its own substantial remedy.