Invoice Late Payment Interest Calculator
Estimate statutory late payment interest, daily interest and fixed compensation for overdue business invoices in the UK.
Enter Overdue Invoice Details
Late Payment Result
Estimated statutory interest on the outstanding invoice.
When Statutory Interest May Apply
UK late commercial payment rules allow many businesses to claim statutory interest on overdue business-to-business debts where no different contractual interest term applies. The usual statutory formula is Bank of England base rate plus 8 percentage points. The page also includes fixed compensation bands. It is not for ordinary consumer debts, disputed invoices, wages, rent arrears or every contract. Always check the agreement, invoice terms and whether the debt is genuinely overdue before adding interest to a demand.
Formula Method
Outstanding debt = invoice amount - partial payments receivedAnnual statutory rate = Bank of England base rate + statutory upliftDaily interest = outstanding debt x annual rate / 100 / 365Interest owed = daily interest x days overdueCompensation = statutory band or custom valueTotal claim estimate = interest owed + compensationThe calculator uses a 365-day year for the daily interest calculation, following the common GOV.UK method. The base rate field is editable because rates change. As of 21 May 2026, the Bank of England’s published Bank Rate is 3.75%, so the default statutory-style rate is 11.75%. If your contract sets a different late-payment rate, enter that by changing the base rate and uplift or record the contract figure separately.
Compensation Bands
| Outstanding Debt | Statutory Compensation | Planning Note |
|---|---|---|
| Up to GBP 999.99 | GBP 40 | Small commercial debt band. |
| GBP 1,000 to GBP 9,999.99 | GBP 70 | Middle band used in the default example. |
| GBP 10,000 or more | GBP 100 | Large debt band. |
Worked Late Payment Example
A business invoice for GBP 2,500 is 45 days overdue. No partial payment has been received. With a 3.75% base rate and 8% statutory uplift, the annual rate is 11.75%. Daily interest is GBP 2,500 x 11.75% / 365, which is about GBP 0.80 per day. Over 45 days, interest is about GBP 36.22. The statutory compensation band for a debt between GBP 1,000 and GBP 9,999.99 is GBP 70. The total interest and compensation estimate is therefore about GBP 106.22, before any reasonable debt recovery costs that may be separately recoverable.
Before Sending A Claim
Check that the invoice is not genuinely disputed, that goods or services were supplied as agreed, that the customer is a business, and that any credit terms have expired. If a long-term customer has a temporary cash-flow issue, it may be better to ask for a payment date before adding interest. If the debt is serious, keep copies of invoices, delivery evidence, email reminders, payment terms and account statements. The Small Business Commissioner may help with late payment issues, but court action and formal debt recovery need careful thought.
Finding The Overdue Day Count
Count overdue days from the day after payment was due. The due date may come from the contract, purchase order, invoice terms or statutory default position. If the customer made a partial payment, calculate interest only on the outstanding amount from that point. If a credit note reduced the invoice, adjust the debt before adding interest. Keep the date calculation in the email or statement so the customer can see how the figure was reached. A clear schedule is usually better than a single unexplained extra charge.
If payment terms say “30 days from invoice date”, count from the invoice date. If they say “30 days from receipt”, keep proof of when the invoice was received. That difference can change the overdue period. If the due date falls on a weekend or bank holiday, check the contract before shifting the date. Save the reminder history with the invoice. Keep phone-call notes as well.
If several invoices are overdue, calculate each invoice separately. Different due dates, part-payments and credit notes can make one combined interest line inaccurate.
When The Calculator Is Not Suitable
Do not use the result as a consumer debt charge. Do not use it for disputed invoices without advice. Do not use it where the contract has a valid alternative interest clause unless you have checked which term applies. International contracts, public bodies, retention clauses, set-off, insolvency and assigned debts can all change the position. The calculator is an arithmetic aid for UK commercial late-payment planning only.
FAQs
What is the statutory late payment interest rate?
For many UK business debts, it is Bank of England base rate plus 8 percentage points. The base rate field is editable because Bank Rate changes.
Can I add compensation as well as interest?
Commercial late-payment rules include fixed compensation bands. The calculator applies GBP 40, GBP 70 or GBP 100 automatically when selected.
Does this apply to consumers?
No. The statutory late commercial payment regime is for business debts. Consumer debts and private customers need different checks.
What if the contract has its own rate?
Check the contract. If it contains a valid late-payment interest term, that may replace the statutory rate.
Should I charge interest on a disputed invoice?
Be careful. If the customer has a genuine dispute, resolve the dispute or seek advice before adding interest.
Can I claim recovery costs?
The rules may allow reasonable recovery costs above the fixed compensation in some cases, but you should keep evidence and seek advice if needed.
Sources
- Department for Business and Trade. (n.d.). Late commercial payments: charging interest and debt recovery. GOV.UK. https://www.gov.uk/late-commercial-payments-interest-debt-recovery
- Bank of England. (2026). Bank Rate maintained at 3.75% – May 2026. Bank of England. https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2026/may-2026
- Small Business Commissioner. (n.d.). Late payment support. GOV.UK. https://www.smallbusinesscommissioner.gov.uk/