Home › Free tools › Late payment interest

Late payment interest calculator

A landlord, letting agent or builder hasn't paid you? Work out the statutory interest and fixed compensation you can add under the Late Payment of Commercial Debts (Interest) Act 1998.

Bank of England base rate: 3.75% (checked 2026-10-20; next decision 2026-11-05). For debts where interest started in 2026 that gives 11.75% a year.

Amount owed (£) Date payment was due

No agreed payment date? Use 30 days after the customer got the invoice (or after you did the work, if later).

Date paid (leave blank for today)

Calculate

How it's worked out

1. Interest starts the day after the payment was due.
2. The rate is 8% plus the base rate in force on the last 30 June or 31 December before that day.
3. Daily interest = amount × rate ÷ 365. Multiply by the days late.
4. Add fixed compensation once: £40 (under £1,000), £70 (£1,000–£9,999.99) or £100 (£10,000+).
5. Send a new invoice showing the interest and compensation.

Sources: GOV.UK: interest on late commercial payments · GOV.UK: debt recovery costs · GOV.UK: when a payment becomes late · SI 2002/1675 art. 4 (reference rate) · Bank of England Bank Rate history

You can't claim statutory interest if your contract sets a different rate. This is a guide, not legal advice. It covers business customers only, not homeowners.

What interest can I charge on a late invoice?

For business-to-business debts, statutory interest is 8% a year plus the Bank of England base rate, unless your contract sets a different rate (GOV.UK).

Which base rate do I use?

The rate in force on 30 June (if interest starts between 1 July and 31 December) or 31 December (if interest starts between 1 January and 30 June), immediately before interest starts to run. Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, article 4.

How much fixed compensation can I add?

£40 for debts up to £999.99, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. You can only charge it once per payment (GOV.UK).

When is an invoice late?

If you did not agree a payment date, it is late 30 days after the customer gets the invoice or you finish the work, whichever is later (GOV.UK).

Does this apply to homeowners?

No. The Late Payment of Commercial Debts (Interest) Act covers business customers, such as landlords running a letting business, letting agents and builders. It does not cover private households.