UK Late Payment Interest Calculator

This calculator works out what you are entitled to claim when another business pays you late. Under the Late Payment of Commercial Debts legislation, a business or public authority that pays a commercial invoice after the agreed date owes statutory interest on the debt, plus a fixed sum of compensation that depends on the size of the invoice.

1. Enter the unpaid invoice amount.
2. Enter the date payment was due under your terms, and the date it was actually paid or today's date if it is still outstanding.
3. Check the base rate figure matches the current Bank of England rate.
4. Read off the interest, the fixed compensation and the total you can claim.

A facilities contractor is owed 12,000 on an invoice that fell due on 1 March and is still unpaid 45 days later, with a base rate of 4%.

• Statutory rate: 4% base plus 8% = 12%.
• Daily interest: 12,000 x 0.12 / 365 = 3.95.
• Interest for 45 days: 3.95 x 45 = 177.53.
• Fixed compensation for a debt over 10,000: 100.

A claim of roughly 277.53 on top of the 12,000 principal. The figure keeps rising each day the invoice stays unpaid.

• Statutory interest runs at the Bank of England base rate plus 8% on the unpaid amount.
• Interest accrues daily from the day after payment was due until the day the debt is settled.
• The daily amount is the debt multiplied by the annual rate, divided by 365, and multiplied by the number of days overdue.
• Fixed compensation is added on top as a flat sum banded by invoice value: 40, 70 or 100.

The interest figure is usually modest compared with the invoice, and that is not really the point. The value of the calculation is in the conversation it enables: a polite reminder that quotes the statutory entitlement, the daily rate and the running total tends to move an invoice up the payment queue. You can choose to waive the interest as a gesture once payment lands, but you cannot claim it if you never mention it.

Public sector buyers are expected to pay valid invoices promptly, and prompt payment performance is something central government and larger contractors are required to report on. If you supply into public contracts, knowing your statutory position is part of managing cash flow, and it is a reasonable thing to raise with a buyer without damaging the relationship.

What interest can I charge on a late invoice?

For commercial debts, statutory interest is the Bank of England base rate plus 8%, unless your contract sets a substantial contractual remedy instead.

How much is the fixed compensation?

40 for debts under 1,000, 70 for debts of 1,000 up to 9,999.99, and 100 for debts of 10,000 or more.

When does an invoice become late?

The day after the agreed payment date. Where no date is agreed, the default period under the legislation is 30 days from delivery or from receipt of the invoice, whichever is later.

Can I claim interest from a main contractor who is holding my payment?

Yes. A payment between two businesses is a commercial debt, so the statutory position applies to a main contractor the same as it does to a council or an end client. Check the contract first, because some set out their own substantial remedy for late payment instead.

Does this apply to consumers?

No. The statutory regime covers business to business and business to public sector debts, not sales to individual consumers.