Late payment interest calculator
When another business pays late, the law lets you charge interest and a fixed sum on top. See how much an overdue invoice has earned.
How this is calculated
Statutory interest is 8% a year plus the reference base rate, charged on the debt for each day it is late.
Fixed compensation is £40 for a debt under £1,000, £70 for £1,000 to £9,999.99 and £100 for £10,000 or more.
This applies to business-to-business contracts under the Late Payment of Commercial Debts (Interest) Act, unless the contract sets its own late payment terms.
Rates used · 2026/27
| Interest | 8% plus the Bank of England base rate |
| Under £1,000 | £40 compensation |
| £1,000 to £9,999.99 | £70 compensation |
| £10,000 or more | £100 compensation |
Last checked July 2026. Source: HMRC and gov.uk.
Worked example
A £5,000 invoice paid 45 days late, with a 3.75% base rate, earns statutory interest at 11.75% a year: £1.61 a day, so £72.43. Add £70 of fixed compensation and you can claim £142.43.
Common questions
Can I charge interest on a late invoice?
Yes, to another business, unless your contract says otherwise. You do not need to have warned them in advance.
Does this apply to consumers?
No. The statutory scheme is for business-to-business debts only.
When does interest start?
From the day after the payment was due. If no date was agreed, 30 days after the invoice or delivery, whichever is later.
How do I claim it?
Send a revised invoice or a letter showing the interest and compensation. If they still do not pay, small claims are possible through the courts.