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UK late payment calculator
Calculate statutory interest and statutory compensation on an overdue UK B2B invoice under the Late Payment of Commercial Debts (Interest) Act 1998. Enter the principal, the due date, and today; we'll give you the exact figure to cite in your Letter Before Action.
Check the current base rate at bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate. The Act sets statutory interest at base rate + 8% on overdue B2B invoices.
Statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 applies only to B2B invoices — not consumer invoices. For consumer debt, you can claim interest under the County Courts Act 1984 at 8% simple interest if you take the case to court.
How statutory interest is calculated
The Late Payment of Commercial Debts (Interest) Act 1998 lets UK suppliers claim a statutory rate of 8% above the Bank of England base rate on overdue B2B invoices. With the base rate at around 4.25% in mid-2026, the total annual rate is approximately 12.25%. Interest accrues from the day after payment was due and continues until the principal is paid in full.
The calculation is simple, not compound — daily rate (annual / 365) × principal × days overdue. On a £1,850 invoice that's 14 days overdue, the interest is roughly: £1,850 × (12.25% / 365) × 14 = £8.69. Not much. But on a £20,000 invoice that's 90 days overdue, it's about £604. The bigger lever is usually the statutory compensation (£100 on any invoice £10,000+) and the threat of court costs added on top.
Beyond interest and compensation, you can claim reasonable debt-recovery costs: court fees if you file a claim (£35–£455 depending on claim size), recorded-delivery postage on your Letter Before Action, and any solicitor's costs if you instructed one. These get added to the claim total on top of the statutory figures.
Statutory compensation bands
| Invoice principal | Statutory compensation |
|---|---|
| Under £1,000 | £40 |
| £1,000 – £9,999.99 | £70 |
| £10,000 or more | £100 |
Set by the Late Payment of Commercial Debts Regulations 2013. Claimable once per invoice, regardless of how late the payment is.
Frequently asked
- What interest can I charge on a late UK invoice?
- Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge statutory interest of 8% above the Bank of England base rate on overdue B2B invoices. With the base rate at around 4.25% in 2026, total annual interest is approximately 12.25%. You can also claim statutory compensation (a fixed sum of £40, £70, or £100 depending on invoice size) and reasonable debt-recovery costs. The Act only applies to B2B invoices — not consumer debts.
- How much is statutory compensation on a late UK invoice?
- Statutory compensation is a fixed sum that doesn't depend on how late the invoice is — only on the invoice principal. £40 for invoices under £1,000. £70 for invoices £1,000–£9,999.99. £100 for invoices £10,000 or more. You can claim this once per invoice (not per chase letter), and it's claimable in addition to the interest. Most UK debtors pay it without dispute when cited in a Letter Before Action.
- When does statutory interest start accruing on a late UK invoice?
- From the day after the agreed payment due date. If you specified 'Net 30 days from invoice' and the invoice date is 1 May 2026, payment is due 31 May; interest accrues from 1 June. If no payment date was agreed in the contract, the Act sets a default of 30 days from delivery of the goods/services or 30 days from receipt of the invoice (whichever is later). Interest is calculated as daily simple interest, not compound.
- Does the Late Payment Act apply to consumer invoices?
- No — only to B2B invoices (business-to-business). For consumer invoices (the customer is an individual buying for personal use), you can't claim statutory interest under the 1998 Act. You can still claim interest if you take the case to court — the County Courts Act 1984 allows for 8% simple interest on judgment debts. In practice, the easier route on consumer debt is to claim within the contract terms if you specified interest in your written terms.
- Can I waive the right to charge statutory interest?
- Only by an explicit, agreed clause in the contract — and even then, the Act limits the extent to which you can contract out. The court can override contract terms that 'oust' the Act if they're substantially unfair. In practice, almost no UK B2B contract validly waives statutory interest; it's a default right of the supplier. You don't need to mention it in your terms to be able to claim it — but stating it explicitly in your payment terms reinforces the contractual position.
- Do I have to actually claim statutory interest if I cite it in a Letter Before Action?
- No. Citing the Act in a Letter Before Action is a credible threat that often shifts payment behaviour — most debtors pay the principal to avoid the formal claim, and the interest never gets pursued. Some tradespeople drop the interest claim if the principal is paid promptly after the LBA; others insist on it as a deterrent against future late payment. Both approaches are legitimate. Whatever you decide, be consistent across customers.
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