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Late Payment Interest Calculator

Calculate the statutory interest and debt recovery costs you can legally claim on overdue UK business invoices.

Invoice Details

£
Current statutory rate: 12.75%(8% statutory + 4.75% Bank of England base rate)

Your Late Payment Claim

Enter dates to calculate your claim

Fixed Debt Recovery Costs

UK law allows you to claim a fixed sum for debt recovery:

Debt up to £999.99£40
Debt £1,000 - £9,999.99£70
Debt £10,000 or more£100

Your Legal Rights

Under the Late Payment of Commercial Debts (Interest) Act 1998, businesses can charge interest on late B2B payments. The statutory rate is 8% above the Bank of England base rate. You can also claim fixed compensation for debt recovery costs.

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Your Rights Under the Late Payment Act

The Late Payment of Commercial Debts (Interest) Act 1998 gives UK businesses the right to charge interest on late B2B payments. This statutory right cannot be excluded by contract unless you agree to a "substantial remedy" instead.

What You Can Claim:

  • Interest: 8% per year above the Bank of England base rate, calculated from the day after the due date
  • Compensation: A fixed sum for debt recovery costs (£40, £70, or £100 depending on debt size)
  • Reasonable costs: If recovery costs exceed the fixed sum, you can claim additional reasonable costs

Important Notes:

  • This applies to business-to-business transactions only
  • Interest is simple interest, not compound
  • You can claim even if you haven't included late payment terms in your contract

Frequently Asked Questions

What is the statutory interest rate for late payments?

The statutory interest rate is 8% above the Bank of England base rate. This is set by the Late Payment of Commercial Debts (Interest) Act 1998 and applies to B2B transactions in the UK.

What are debt recovery costs?

You can claim a fixed sum for debt recovery costs: £40 for debts under £1,000, £70 for debts between £1,000 and £9,999.99, and £100 for debts of £10,000 or more. This is in addition to interest.

Can I charge interest on consumer debts?

The statutory late payment interest only applies to business-to-business (B2B) transactions. For consumer debts, different rules apply and you cannot automatically charge statutory interest.

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