Free Tool

Late Payment Interest Calculator UK

Calculate the statutory interest you can claim on overdue invoices under the Late Payment of Commercial Debts Act 1998. Current rate: Bank of England base rate (4.25%) + 8% = 12.25% per annum.

⚡ Late Payment Interest Calculator

⚡

FlashBill sends Late Payment notices automatically.

Friendly, firm, or formal Late Payment Act reminders — sent automatically when invoices go overdue. Free to start.

Start Free →

What is the Late Payment of Commercial Debts Act 1998?

The Late Payment of Commercial Debts (Interest) Act 1998 gives UK businesses the right to charge statutory interest on overdue invoices. This applies to all B2B transactions — if another business owes you money and pays late, you can charge interest from the day after the payment was due.

How Much Interest Can I Charge?

The statutory interest rate is the Bank of England base rate plus 8%. As of June 2026, the BoE base rate is 4.25%, making the total statutory rate 12.25% per annum.

This rate is reviewed twice a year (1 January and 1 July) and adjusted if the base rate changes. Always check the HMRC guidance for the current rate.

You don't need to register or apply — the right to claim statutory interest arises automatically under the Act. You can claim it at any point while the debt remains unpaid or up to 6 years after payment.

Can I Also Claim a Fixed Debt Recovery Fee?

Yes. In addition to interest, the Act entitles you to a fixed compensation charge:

  • £40 for debts under £1,000
  • £70 for debts between £1,000 and £9,999.99
  • £100 for debts of £10,000 or more

When Does the Clock Start?

For invoices with agreed payment terms (e.g. 30 days), interest starts from the day after the due date. If no terms were agreed, the default under the Act is 30 days from the date the invoice was received or goods/services delivered, whichever is later.

Ready to Stop Chasing Late Payers?

FlashBill automatically sends payment reminders — friendly, firm, and formal Late Payment Act notices — when invoices go overdue. It calculates the correct statutory interest and adds it to the reminder automatically. Try FlashBill free →