Late payment interest calculator (UK)

Work out the statutory interest and fixed compensation you can add when a business customer pays you late. The base rate field is pre-filled with 3.75%, the current Bank of England Bank Rate, which we check automatically against bankofengland.co.uk every day (last checked 13 October 2026). You can edit it.

How do I use the late payment calculator?

1. Invoice amount. Enter the amount owed, including VAT if you charged it.
2. Due date. The payment date you agreed, or 30 days after the customer received the invoice (or you finished the work, if later) if no date was agreed.
3. Today's date. Or the date the customer finally paid.
4. Base rate. Pre-filled at 3.75%. Change it only if the invoice falls in an earlier period (see the table below).
5. Read the results. You get the yearly interest rate, the daily interest, the interest to date, the fixed compensation and the total you can claim.

How is late payment interest calculated?

This is the method GOV.UK uses in its own worked example. Interest is simple, not compound: you do not charge interest on interest.

Which base rate applies?

The Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002 fixes the base rate in two six-month blocks. For interest that starts running between 1 July and 31 December, use the rate in force on 30 June. For interest starting between 1 January and 30 June, use the rate on 31 December. The rate then stays fixed for that debt, even if the Bank of England changes it later.

Bank Rate is 3.75% (set on 18 December 2025). We check it automatically against the Bank of England every day, last checked 13 October 2026.

Fixed compensation

You can also claim reasonable costs each time you try to recover the debt, such as a debt collection fee, on top of the fixed sum.

Worked late payment examples

The £2,400 example in full

A roofer invoices a letting agent £2,400 (including VAT) on 30-day terms. The agent pays 45 days after the due date.

• Yearly interest: £2,400 × 11.75% = £282.00
• Daily interest: £282.00 ÷ 365 = about £0.77
• Interest for 45 days: £282.00 × 45 ÷ 365 = £34.77
• Fixed compensation (£1,000 to £9,999.99): £70
• Total claim: £2,400 + £34.77 + £70 = £2,504.77

On bigger invoices the figures add up fast, which is why simply stating them in a reminder often gets an invoice paid.

What mistakes do people make claiming late payment?

• Using today's base rate for an old debt. Use the rate from the reference date before the interest started (see the table).
• Charging homeowners statutory interest. The Act covers business-to-business debts only.
• Counting from the invoice date. Interest runs from the day after the due date, not from the day you sent the invoice.
• Claiming compensation per reminder. The fixed sum is one charge per invoice, not per letter.
• Ignoring your own contract. If your terms set a different interest rate, that rate applies instead of the statutory one.

What should your invoices say about late payment?

You do not have to mention statutory interest on your invoice to claim it, but saying so up front often gets you paid faster. Add a line to every business invoice such as:

For domestic customers, write your own payment terms into the quote and get the customer to accept them before you start, because the statutory scheme does not cover them. Ask for deposits or stage payments on bigger domestic jobs instead.

Agreeing payment terms

GOV.UK says agreed payment dates should usually be within 60 days for business transactions and 30 days for public authorities. Longer terms between businesses are possible but must be fair to both sides. If nothing is agreed, the 30-day default applies, so it pays to agree shorter terms in writing.

How do you chase an unpaid invoice?

1. Day 1 after the due date: a friendly reminder with the invoice attached and your bank details.
2. Day 7: a firmer reminder stating that statutory interest at 11.75% a year and the fixed compensation will be added.
3. Day 14: phone the person who approves payments and confirm a date.
4. Day 30: a final letter before action with the full amount, including interest and compensation, and a deadline.
5. After the deadline: consider a court claim. In England and Wales you can use Money Claim Online; Scotland and Northern Ireland have their own small claims routes.

The best protection is clear payment terms on every quote and invoice. Our guide on how to write an invoice shows exactly what to include, and our free invoice templates have a payment terms line built in. If chasing eats your evenings, quote and invoice software can send reminders automatically and show who owes what at a glance.