Late payment interest calculator
If a business customer pays an invoice late, UK law lets you charge statutory interest plus a fixed compensation fee under the Late Payment of Commercial Debts (Interest) Act 1998. Enter the invoice details below to see what you can claim.
How late payment interest works
The Late Payment of Commercial Debts (Interest) Act 1998 applies to invoices between businesses (it does not apply to consumers). When a payment is late you can charge:
- Statutory interest - the Bank of England base rate plus 8%, applied to the overdue amount for each day it is late.
- Fixed compensation - a one-off sum per invoice to cover the cost of chasing: £40 for debts under £1,000, £70 for debts of £1,000 to £9,999.99, and £100 for debts of £10,000 or more.
You can claim these even if you did not mention them on the invoice. Many freelancers and small studios never do - but the right to is there, and a polite reminder that interest is accruing often gets an invoice paid faster.
Frequently asked
Do I have to charge interest?
No - it is your choice. Plenty of people waive it to keep a good relationship, then mention it only if an invoice goes seriously overdue. The calculator just shows what you would be entitled to.
Does this apply to consumers?
No. The statutory interest and compensation here apply to business-to-business invoices. Different rules apply to consumers.
What date do I count from?
Interest runs from the day after payment was due. If you did not agree a payment date, the default is 30 days after the invoice or delivery.
Stop doing this by hand
Badger chases your overdue invoices for you - polite at first, firmer over time, and it stops the moment you are paid. Your first chase is free.
Start chasing freeThis calculator gives an estimate for general guidance only and is not legal or financial advice. Statutory interest rules and the base rate change over time - check the current figures and your own circumstances, or speak to a professional, before relying on these numbers.