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Late payment interest calculator

Chasing an overdue invoice from another business? Under UK law you can charge statutory interest plus a fixed compensation fee. Here's what you're owed.

Invoice amount (unpaid)

Days overdue

Bank of England base rate (%)

Total you can claim

£90.96

Statutory interest £20.96

Fixed compensation £70.00

Interest rate used 12.75%

Total now owed (invoice + claim) £2,090.96

What you're allowed to charge

When another business pays late, the Late Payment of Commercial Debts legislation lets you add two things on top of the invoice.

Statutory interest. This is 8% a year plus the Bank of England base rate, calculated daily on the unpaid amount for the number of days it's late. So if the base rate is 4.75%, you charge 12.75% a year, pro-rated for the days overdue.

Fixed compensation. A one-off fee for the cost of chasing: £40 for invoices under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more.

These rules apply to business-to-business invoices, not to consumers. You don't have to charge interest, but you're entitled to, and even mentioning it politely often gets an invoice paid. When you're ready to chase, our guide on chasing an unpaid invoice walks through the wording.

Next steps

Copy a template

TemplateLate payment letterThe letter that gets an overdue invoice paid TemplateInvoice templateA UK invoice with every required detail

Read the guide

GuideHow to chase an unpaid invoice (politely), with templatesExactly what to say when a client hasn't paid, when to send each message, and how to get paid without damaging the relationship.GuideHow to write an invoice (+ exactly what it must include)A simple guide to writing your first invoice in the UK, the details it legally needs, how to number it, and how to actually get paid on time.

What the words mean

TermStatutory interestInterest you are legally entitled to charge another business on a late payment.TermNet 30Payment terms that mean the invoice is due 30 days after it is issued.TermCash flowThe movement of money in and out of your business over time.

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For guidance only, not legal or financial advice. Confirm the current base rate and rules on GOV.UK for your situation.