Late Payment Interest Calculator

Work out the statutory interest (base rate + 8%) and fixed compensation you can charge a UK business that paid you late. One invoice or ten.

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Your claim: interest + compensation

£216.51

£5,000.00 paid 91 days late: £146.51 interest at 11.75% plus £70.00 compensation.

Statutory interest: £146.51
Fixed compensation: £70.00
Interest rate: 11.75%; Base rate + 8% a year
Total now due: £216.51; The invoice is paid, so this is interest and compensation only

Invoice
Amount owed
The invoice total, including any VAT on it.
Due date
No agreed date? Use 30 days after the invoice or delivery.
Paid on
Still unpaid

Base rate override (optional)

Leave blank to use the Bank of England base rate for the period (table checked 22 Oct 2026).

Show the working

rate:base rate on 31 Dec 2025 3.75% + 8% = 11.75% a year
daily interest:5,000 × 0.1175 ÷ 365 = £1.6096, rounded to £1.61
interest:£1.61 × 91 days = £146.51
compensation:£5,000.00 is £1,000 to £9,999.99: £70.00
Rounding:The Act does not prescribe rounding; we follow GOV.UK's published method (daily interest rounded to the penny, then multiplied by the days late) so figures match what the debtor sees there.

Claim letter

A plain letter claiming these amounts, with the working. Use it when your contract does not set its own late payment interest.

Your business name

Customer name

Invoice number

Names and invoice numbers stay in this browser tab. They are not added to the link or sent to OrderSync.

[Your business name]
23 October 2026

To: [Customer name]

Claim for late payment interest and compensation

Dear Sir or Madam,

The invoice below was paid after its due date. We are claiming statutory interest on it under section 1 of the Late Payment of Commercial Debts (Interest) Act 1998, at the rate set by the Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, and fixed compensation under section 5A of the Act.

Invoice       Amount          Due         Paid  Days late    Rate  Per day  Interest  Compensation
---------  ---------  -----------  -----------  ---------  ------  -------  --------  ------------
Invoice 1  £5,000.00  31 Mar 2026  30 Jun 2026         91  11.75%    £1.61   £146.51        £70.00

How the figures are worked out

Statutory interest is 8% a year above the Bank of England base rate on the reference date: 31 December for a debt that became late from January to June, 30 June for one that became late from July to December. It is simple interest from the day after the due date.

- Invoice 1: base rate on 31 December 2025 3.75% + 8% = 11.75%. Daily interest £5,000.00 x 11.75% / 365 = £1.61, for 91 days = £146.51.

Fixed compensation is £40 for a debt under £1,000, £70 from £1,000 to £9,999.99 and £100 for £10,000 or more, for each invoice.

Interest: £146.51
Compensation: £70.00
Total claimed: £216.51

Please pay £216.51 to our usual account, quoting the invoice number above. If you think any of these figures are wrong, please tell us which and why.

The Act: https://www.legislation.gov.uk/ukpga/1998/20
GOV.UK guidance on late payment interest: https://www.gov.uk/late-commercial-payments-interest-debt-recovery

Yours faithfully,

[Your business name]

This letter sets out the statutory amounts. It is not legal advice. GOV.UK explains how to claim late payment interest and what to do if the customer does not pay.

How Statutory Late Payment Interest Works

Under the Late Payment of Commercial Debts (Interest) Act 1998, a UK business that pays another business late owes interest at 8% a year above the Bank of England base rate, plus a fixed sum for the cost of chasing. Interest is simple, not compound, and runs daily from the day after the due date until the day you are paid.

Statutory rate = base rate (reference date) + 8%
Daily interest = amount owed x statutory rate / 365
Interest = daily interest x days late
Claim = interest + fixed compensation (£40, £70 or £100)

Worked Example

The GOV.UK example: £1,000 owed, base rate 0.5%, 50 days late

Annual interest = 1,000 x (0.5% + 8%) = 1,000 x 0.085 = £85
Daily interest = 85 / 365 = £0.2329, rounded to the penny = £0.23
Interest for 50 days = 0.23 x 50 = £11.50
Fixed compensation for £1,000 = £70

Claim £81.50 on top of the £1,000, the same as the GOV.UK example. Enter a base rate override of 0.5 above to check it.

The Act does not prescribe rounding; we follow GOV.UK's published method (daily interest rounded to the penny, then multiplied by the days late) so figures match what the debtor sees there.

A 2026 invoice: £5,000 due 31 March 2026, paid 30 June 2026

Interest starts 1 April 2026, so the reference date is 31 December 2025
Base rate on 31 December 2025: 3.75%, so the statutory rate is 11.75%
Daily interest = 5,000 x 0.1175 / 365 = £1.6096, rounded to £1.61
Days late = 91, interest = 1.61 x 91 = £146.51
Fixed compensation for £5,000 = £70

Claim £216.51. The £5,000 itself was paid, so the interest and compensation are all that is now due. Had it still been unpaid, the customer would owe £5,216.51.

Late Payment Interest Rates by Period

The base rate is fixed twice a year for this purpose: the rate on 31 December applies to debts that become late from 1 January to 30 June, and the rate on 30 June applies from 1 July to 31 December. Source: the Bank of England Bank Rate history, last checked on 22 October 2026. The latest change on file is 3.75% from 18 December 2025. For debts that become late from 1 July to 31 December 2026, the rate is 11.75% (3.75% base rate on 30 June 2026 plus 8%). The table covers every period the calculator supports, from debts that became late in July 2009.

Statutory late payment interest rate by six-month period
Debt became late	Base rate on	Base rate	Statutory rate
1 July to 31 December 2026	30 Jun 2026	3.75%	11.75%
1 January to 30 June 2026	31 Dec 2025	3.75%	11.75%
1 July to 31 December 2025	30 Jun 2025	4.25%	12.25%
1 January to 30 June 2025	31 Dec 2024	4.75%	12.75%
1 July to 31 December 2024	30 Jun 2024	5.25%	13.25%
1 January to 30 June 2024	31 Dec 2023	5.25%	13.25%
1 July to 31 December 2023	30 Jun 2023	5%	13%
1 January to 30 June 2023	31 Dec 2022	3.5%	11.5%
1 July to 31 December 2022	30 Jun 2022	1.25%	9.25%
1 January to 30 June 2022	31 Dec 2021	0.25%	8.25%
1 July to 31 December 2021	30 Jun 2021	0.1%	8.1%
1 January to 30 June 2021	31 Dec 2020	0.1%	8.1%
1 July to 31 December 2020	30 Jun 2020	0.1%	8.1%
1 January to 30 June 2020	31 Dec 2019	0.75%	8.75%
1 July to 31 December 2019	30 Jun 2019	0.75%	8.75%
1 January to 30 June 2019	31 Dec 2018	0.75%	8.75%
1 July to 31 December 2018	30 Jun 2018	0.5%	8.5%
1 January to 30 June 2018	31 Dec 2017	0.5%	8.5%
1 July to 31 December 2017	30 Jun 2017	0.25%	8.25%
1 January to 30 June 2017	31 Dec 2016	0.25%	8.25%
1 July to 31 December 2016	30 Jun 2016	0.5%	8.5%
1 January to 30 June 2016	31 Dec 2015	0.5%	8.5%
1 July to 31 December 2015	30 Jun 2015	0.5%	8.5%
1 January to 30 June 2015	31 Dec 2014	0.5%	8.5%
1 July to 31 December 2014	30 Jun 2014	0.5%	8.5%
1 January to 30 June 2014	31 Dec 2013	0.5%	8.5%
1 July to 31 December 2013	30 Jun 2013	0.5%	8.5%
1 January to 30 June 2013	31 Dec 2012	0.5%	8.5%
1 July to 31 December 2012	30 Jun 2012	0.5%	8.5%
1 January to 30 June 2012	31 Dec 2011	0.5%	8.5%
1 July to 31 December 2011	30 Jun 2011	0.5%	8.5%
1 January to 30 June 2011	31 Dec 2010	0.5%	8.5%
1 July to 31 December 2010	30 Jun 2010	0.5%	8.5%
1 January to 30 June 2010	31 Dec 2009	0.5%	8.5%
1 July to 31 December 2009	30 Jun 2009	0.5%	8.5%

Fixed Compensation Amounts

Fixed compensation by debt size
Amount owed	Fixed sum
Up to £999.99	£40
£1,000 to £9,999.99	£70
£10,000 or more	£100

The fixed sum is charged once per invoice. If your reasonable recovery costs were higher (a collection agency, for example), you can claim the difference too.

How to Claim

Check your contract does not set its own late payment interest rate.
Work out the interest and compensation above, invoice by invoice.
Send the customer a statement or a new invoice for the interest and compensation, showing the rate and dates used. Copy the result above for the breakdown.
If they still do not pay, the claim can be included in a county court or small claims action.

Official guidance: GOV.UK late commercial payments and the Late Payment of Commercial Debts (Interest) Act 1998. This calculator gives the statutory figures; it is not legal advice.

Late payers are often waiting on an invoice that went out late. If your team keys orders and invoices by hand, see how automated order processing gets them out the same day, or work out what that manual work costs with the order processing cost calculator.

Frequently Asked Questions

How is statutory late payment interest calculated?

Multiply the amount owed by the statutory rate (8% plus the Bank of England base rate), divide by 365 to get the daily interest, then multiply by the number of days late. Round the daily amount to the penny first, as GOV.UK does. On £5,000 at 11.75%, that is £1.61 a day, or £146.51 for 91 days.

Which base rate do I use?

The rate fixed for the six months in which the debt became late. For debts that become late between 1 January and 30 June, use the base rate on the previous 31 December. For 1 July to 31 December, use the base rate on 30 June. The rate stays fixed for that debt.

How much fixed compensation can I claim?

£40 for a debt up to £999.99, £70 for £1,000 to £9,999.99 and £100 for £10,000 or more. It is charged once per invoice, on top of the interest. You can also claim reasonable costs of recovering the debt when they are more than the fixed sum.

When does a payment become late?

On the day after the agreed payment date. Business payment terms are usually up to 60 days. If no date was agreed, the payment is late 30 days after the customer received the invoice or the goods or services, whichever is later.

Can I claim statutory interest if my contract has its own late payment rate?

No. Statutory interest only applies when the contract does not set a substantial remedy for late payment. If your terms set their own interest rate, claim that instead.

Does this apply to consumers?

No. The Late Payment of Commercial Debts (Interest) Act 1998 covers business to business (and business to public sector) debts for goods and services. It does not apply to sales to consumers.

Should the amount include VAT?

Use the amount the customer owes on the invoice, which includes any VAT you charged them. Interest and compensation are not themselves subject to VAT.