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Late payment interest calculator.
Under the Late Payment of Commercial Debts Act, you can charge statutory interest at the Bank of England base rate + 8% on every overdue commercial invoice — plus a fixed compensation fee. Most tradespeople never claim it. Here’s what you’re actually owed.
Current rate: 3.75% (held 30 April 2026). The statutory rate is fixed every 6 months — use the rate that applied when your invoice became overdue. Verify on bankofengland.co.uk.
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How this is calculated
- Base rate as of 30 April 2026: 3.75% (held at the MPC meeting on 30 April 2026 — verify on bankofengland.co.uk). Use the rate that applied when your invoice became overdue.
- Statutory interest = invoice amount × (base rate + 8%) × days overdue ÷ 365 (simple interest).
- Fixed compensation fee: £40 (debts < £1,000), £70 (£1,000–£9,999), £100 (£10,000+).
- Applies to business-to-business commercial debts only — not consumer invoices.
- Authority: GOV.UK — late commercial payments and the Late Payment of Commercial Debts (Interest) Act 1998.
- This is a guide, not legal advice. If a client disputes the charge, take legal advice before pursuing further.