Tools
Late payment interest calculator
What an overdue B2B invoice is really worth: statutory interest at 8% plus the Bank of England base rate, and the fixed compensation the law adds on top.
The law does the chasing with you
Under the Late Payment of Commercial Debts (Interest) Act 1998, a UK business can add statutory interest and fixed compensation to overdue B2B invoices without any clause in the contract. Most late payers have never seen it quantified; an exact figure in your final notice changes the conversation.
Then make paying it effortless. A payment link beside the figure lets the debtor settle by card or open banking in one tap, today, instead of promising a transfer next week.
Chasing in writing? Use the late payment letter templates alongside this calculator, from polite reminder to letter before action.
Work out what you can add to the invoice
For business-to-business invoices under the Late Payment of Commercial Debts (Interest) Act 1998. Verify the current base rate at bankofengland.co.uk before relying on a figure; the slider default is not updated live. General information, not legal advice.
Statutory interest FAQs
How is statutory late payment interest calculated?
Debt × (8% + the Bank of England base rate) ÷ 365 gives the daily interest; multiply by the number of days overdue. On top, you can claim fixed compensation per invoice: £40 for debts under £1,000, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more.
Does this apply to every unpaid invoice?
It applies to business-to-business contracts for goods and services in the UK. Consumer debts fall under different rules, and contracts sometimes substitute their own interest clause, which must still be a substantial remedy to displace the statutory one.
From what date does interest run?
The day after your agreed due date. If no payment terms were agreed, it runs from 30 days after the invoice or the delivery of the goods or services, whichever is later.
Do I have to charge it?
No, it is a right, not an obligation. Many businesses quote it in a final notice as leverage and waive it on prompt settlement. An exact figure in the letter, with a payment link beside it, is what moves invoices.
Is this the same as HMRC late payment interest?
No, and they are easy to confuse because both track the Bank of England base rate. This calculator is for interest you charge another business on an overdue invoice, at 8% above base under the 1998 Act. Interest HMRC charges you on late tax is a separate rate, set at 4 points above base since April 2025, which puts it at 7.75%. HMRC pays interest the other way too, at base rate minus 1% with a floor of 0.5%, which is a good deal less than it charges.
Turn overdue invoices into cleared funds
Payment links, card acceptance and named accounts that reconcile themselves, from a group of licensed institutions.