What does the Late Payment Interest Calculator do?

Calculate statutory interest and compensation on overdue commercial invoices under UK law. All calculations are performed in your browser using official UK rates and thresholds.

Is this suitable for my business?

This calculator provides general estimates based on standard UK business rates and rules. Every business is different — consult your accountant for advice specific to your circumstances.

Does this use 2025/26 tax rates?

Yes. All rates and thresholds are based on the current 2025/26 UK tax year. Corporation Tax main rate is 25% for profits over £250,000, with a 19% small profits rate.

Late Payment Interest Calculator

Calculate statutory interest and compensation on overdue commercial invoices under UK law.

Last updated: April 2026 · Source: GOV.UK – Late Commercial Payments Interest

Invoice Amount

Days Overdue

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

Under the Late Payment of Commercial Debts (Interest) Act 1998, UK businesses have a statutory right to charge interest and claim compensation when another business pays an invoice late. The statutory interest rate is the Bank of England base rate plus 8 percentage points per annum. Interest accrues from the day after the agreed payment date (or 30 days after delivery of goods/services or receipt of invoice, whichever is later, if no payment terms were agreed).

In addition to interest, you can claim a fixed compensation amount based on the size of the unpaid debt: £40 for debts up to £999.99, £70 for debts between £1,000 and £9,999.99, and £100 for debts of £10,000 or more. You can also claim reasonable recovery costs—such as the cost of sending reminder letters or instructing a debt collection agency—if the fixed compensation does not cover them.

Interest is calculated as: Debt amount × (Base rate + 8%) ÷ 365 × Number of days overdue. Contract terms can specify a different interest rate, but it must be a substantial remedy—if a contract sets an unreasonably low rate, the statutory rate can still be invoked. These rights apply to all business-to-business transactions and to public authority debts. They do not apply to consumer debts (business-to-consumer).

Late payment charges on a £5,500 invoice overdue by 45 days

Invoice amount: £5,500. Payment was due 45 days ago.
Current BoE base rate: 4.5%. Statutory rate: 4.5% + 8% = 12.5%.
Daily interest: £5,500 × 12.5% ÷ 365 = £1.883 per day.
Interest for 45 days: £1.883 × 45 = £84.75.
Fixed compensation (debt £1,000–£9,999.99): £70. Total claim: £84.75 + £70 = £154.75.

Source: GOV.UK – Late Commercial Payments Interest

Frequently Asked Questions

What does the Late Payment Interest Calculator do?: Calculate statutory interest and compensation on overdue commercial invoices under UK law. All calculations are performed in your browser using official UK rates and thresholds.
Is this suitable for my business?: This calculator provides general estimates based on standard UK business rates and rules. Every business is different — consult your accountant for advice specific to your circumstances.
Does this use 2025/26 tax rates?: Yes. All rates and thresholds are based on the current 2025/26 UK tax year. Corporation Tax main rate is 25% for profits over £250,000, with a 19% small profits rate.