Late Payment Interest Calculator
Estimate statutory interest and fixed recovery costs for a qualifying late commercial payment under the Late Payment of Commercial Debts (Interest) Act 1998.
The unpaid amount, excluding any interest.
The date your payment terms expired.
Today, or the date it was paid.
- Statutory interest
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- Fixed recovery costs
- −
- Total you can claim
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Why the due date decides the rate
The applicable rate depends on when interest starts to run. Establish that date before using the result in customer correspondence.
Statutory interest is not 8% above whatever the Bank of England base rate happens to be today. It is 8% above the base rate in force on a fixed reference day: 30 June for interest that starts to run between 1 July and 31 December, or 31 December for interest starting between 1 January and 30 June, immediately before the interest starts running (Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, article 4).
That rate is then fixed for the whole life of the debt. It does not move when the Bank of England changes rates afterwards. Interest that started running on 1 July 2023 carries a 13.00% statutory rate, while interest starting in the second half of 2026 carries 11.75%. Enter the due date above and the calculator picks the right reference day for you.
Fixed recovery costs
Separately from interest, you can claim a flat sum once per late payment (GOV.UK):
- £40 on invoices up to £999.99
- £70 on invoices from £1,000 to £9,999.99
- £100 on invoices of £10,000 or more
If your reasonable costs of recovering the debt come to more than the fixed sum, you can claim the difference as well. To add either amount to what a customer owes, raise a new invoice for it.
Statutory interest rates by period
The reference rate for each six-month period since 2016. Base rates come from the Bank of England's official Bank Rate history. The reference-day rule comes from article 4 of the 2002 Order.
| Interest starts to run | Reference day | Base rate | Statutory rate |
|---|---|---|---|
| to | 3.75% | 11.75% | |
| to | 3.75% | 11.75% | |
| to | 4.25% | 12.25% | |
| to | 4.75% | 12.75% | |
| to | 5.25% | 13.25% | |
| to | 5.25% | 13.25% | |
| to | 5.00% | 13.00% | |
| to | 3.50% | 11.50% | |
| to | 1.25% | 9.25% | |
| to | 0.25% | 8.25% | |
| to | 0.10% | 8.10% | |
| to | 0.10% | 8.10% | |
| to | 0.10% | 8.10% | |
| to | 0.75% | 8.75% | |
| to | 0.75% | 8.75% | |
| to | 0.75% | 8.75% | |
| to | 0.50% | 8.50% | |
| to | 0.50% | 8.50% | |
| to | 0.25% | 8.25% | |
| to | 0.25% | 8.25% | |
| to | 0.50% | 8.50% |
Applying the Charge in Your Collection Policy
This calculator gives the statutory arithmetic where the right applies. Whether the debt qualifies and whether to claim are separate questions.
For a telecoms reseller, review the outstanding invoice alongside any payment promise, failed collection or disputed charge before deciding how to proceed. The product article on automated credit control and late-payment charges explains that workflow.
A defined follow-up process helps the team act consistently. Our guide to the credit control process sets one out, and the aged debt report is where you find out whether it is working.
Proposed changes to late payment rules
The Commercial Payments Bill, introduced in May 2026, proposes a 60-day maximum for standard commercial terms, subject to limited exemptions, mandatory statutory interest and wider enforcement powers. It is not yet law and the government says it will not be retrospective. We covered the announcement in our King's Speech update.
Frequently asked questions
Which Bank of England base rate applies to a late invoice?
Use the applicable historical reference rate. The rate is fixed by the base rate in force on 30 June (for interest that starts to run between 1 July and 31 December) or 31 December (for 1 January to 30 June), immediately before the day statutory interest starts running (Rate of Interest (No. 3) Order 2002, article 4). Once set, that rate applies for the whole life of the debt. It does not move when the Bank of England changes rates later.
How much interest can I charge on a late commercial invoice?
For a qualifying commercial debt, statutory interest is 8% above the applicable reference base rate and accrues daily from the day after the payment due date (GOV.UK). If your contract sets its own rate of interest, you claim that instead of the statutory rate. The one exception is a contract with a public authority, where you cannot use a lower rate than the statutory one. The calculator picks the reference rate from the due date.
What is the fixed sum I can claim on top of interest?
You can claim a fixed amount towards recovery costs as well as interest: £40 on invoices up to £999.99, £70 on invoices from £1,000 to £9,999.99, and £100 on invoices of £10,000 or more (GOV.UK). You can only claim it once per late payment. If your reasonable recovery costs exceed the fixed sum, you may claim the difference.
When does an invoice legally become late?
If you agreed a payment date, the invoice is late once that date passes. If you did not agree one, the law treats the payment as late 30 days after either the customer gets the invoice or you deliver the goods or service, whichever is later. Any date you do agree must usually be within 30 days for a public authority or 60 days for a business, though a longer period is allowed for business transactions if it is fair to both sides (GOV.UK). Enter that date as the payment due date above.
Should I actually charge statutory interest?
The decision depends on the qualifying debt, the contract and your collection policy. A calculated charge does not establish how the customer will respond. Our article on automated credit control and late-payment charges explains the relationship with staged follow-up.
Does this calculator give legal advice?
No. It applies the arithmetic in the Late Payment of Commercial Debts (Interest) Act 1998 to the figures you enter. It does not know your contract terms, whether a different rate was validly agreed, whether the debt is disputed, or whether any part was paid along the way. Check the position with your accountant or solicitor before relying on a figure in correspondence.
This calculator is provided for general information and does not constitute legal or financial advice. It assumes the debt was unpaid in full for the whole period and that no different rate was validly agreed in your contract. Check your terms and take professional advice before relying on a figure in correspondence.
Run Credit Control From Invoice Data
SAFE CRM, in early access, runs staged chasing from live invoice balances and checks each account before contact. We can show how it would apply to your overdue invoices.
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