Late payment interest calculator

A business client hasn't paid your invoice? Work out the interest and fixed compensation you can legally add, and get wording you can paste into a chaser email.

Work out what you can claim

The short answer

For business-to-business invoices, you can charge 8% plus the Bank of England base rate a year on late payments.
You can also add fixed compensation of £40, £70 or £100, depending on the size of the debt.
This is your legal right even if your terms don't mention it, unless your contract sets a different fair rate.

Covers the Late Payment of Commercial Debts (Interest) Act 1998 for business-to-business debts. Doesn't apply to invoices to consumers. Base rate defaults to 3.75%, the rate on 30 June 2026, which applies to debts that became late between 1 July and 31 December 2026. Not legal advice.

How it's worked out

Yearly rate: 8% plus the base rate on the relevant reference date. With base rate at 3.75%, that's 11.75%.
Daily interest: invoice amount × yearly rate ÷ 365.
Total interest: daily interest × days late.
Fixed compensation: £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. Claim it once per invoice.

Frequently asked questions

Can I charge interest if my invoice didn't mention it?

Yes. Statutory interest applies to business-to-business contracts automatically, unless you agreed a different rate that's a fair remedy.

When is a payment late?

After the agreed payment date. If none was agreed, it's 30 days after the client received the invoice or the goods or services, whichever is later. Agreed terms between businesses are usually limited to 60 days.

Can I charge late fees to individual customers?

Not under this law. It only covers businesses and public sector bodies. For consumers, you'd need clear, fair terms agreed in advance.

What if they still don't pay?

Send a final letter before action, then you can make a claim online through Money Claim Online. Some people find that showing the interest figure is enough to get paid.

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