UK Late Payment Interest Calculator

How this calculator works

Statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 is charged at the Bank of England base rate plus 8 percentage points, on a simple (non-compounding) daily basis. Crucially, the rate is fixed for the whole period the debt is outstanding: it is set at 8% plus the base rate that was in force on the reference date (30 June or 31 December) immediately before interest started to run, and later base rate movements do not change it. The Court of Appeal confirmed this in Crema v Cenkos Securities plc [2011] EWCA Civ 1444.

This calculator reads your due date, works out the reference date that applies (the 31 December or 30 June immediately before interest begins), and uses the base rate that was in force then. The daily interest and total are then:

• Statutory rate = reference base rate + 8%
• Daily interest = invoice amount x (statutory rate / 100) / 365
• Interest accrued = daily interest x number of days overdue
• Days overdue = payment date minus due date

The reference-date rule and current rates

Under the Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, the reference base rate for a debt is the Bank of England base rate in force on:

• 31 December, for debts where interest starts to run between 1 January and 30 June; or
• 30 June, for debts where interest starts to run between 1 July and 31 December.

The Bank of England base rate has been held at 3.75% since December 2025 (held again by the Monetary Policy Committee on 18 June 2026). It was therefore 3.75% on both the 31 December 2025 and 30 June 2026 reference dates, so the statutory rate for debts that became overdue at any point in 2026 is 11.75% per annum. For older debts the calculator uses the earlier reference rates: 4.25% on 30 June 2025 (statutory 12.25%) and 4.75% on 31 December 2024 (statutory 12.75%). Rates checked July 2026 against the Bank of England.

The fixed compensation fee

On top of interest, you are entitled to a fixed compensation sum per invoice to cover the cost of recovering the debt, set by the Late Payment of Commercial Debts Regulations 2002:

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

The fee is per invoice, not per debtor. Five overdue invoices from one client carry five separate fees. You can also claim reasonable recovery costs above the fixed sum where your actual costs are higher.

When does interest start to run?

Interest begins the day after the payment due date. The due date is the date agreed in the contract, or, if none was agreed, 30 days after the later of the invoice date or the date the goods or services were delivered. The Act applies only to business-to-business contracts where both parties act in a business capacity; it does not cover consumer transactions.

Reduce late payments with Tidybill

The most effective way to cut late payments is automated reminders before and after the due date, plus per-client late fee rules so repeat offenders are handled automatically. Tidybill lets you set a default late fee and interest rate and override it per client, tracks overdue invoices, and can show the interest accrued on each one. See the full guide to UK statutory late payment interest, try the simpler late payment interest calculator (enter days directly), or browse all free calculators.

This calculator is a general guide, not legal or financial advice. Statutory rates and reference base rates change; figures were checked in July 2026. Confirm the applicable base rate and your eligibility to claim before relying on any figure. For a specific dispute, seek professional advice.