Late Payment of Commercial Debts (Interest) Act 1998
Late payment interest calculator: what can you charge?
Statutory interest is 8% above the Bank of England base rate. With base rate at 3.75%, that is 11.75% a year. A £10,000 invoice paid 60 days late earns £193.15 in interest plus £100 fixed compensation: £293.15 you are entitled to add. Enter your own figures below.
How this is worked out
- Statutory interest is 8% above the Bank of England base rate for business to business transactions. You cannot claim statutory interest if a different rate of interest is set in the contract, and you cannot use a lower rate in a contract with a public authority (gov.uk).
- The base rate used is not today's rate but the rate in force on the preceding 30 June or 31 December: the rate set on 30 June applies to interest that starts to run between 1 July and 31 December, and the rate set on 31 December applies to interest starting between 1 January and 30 June (Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, article 4; the equivalent Scottish order is in the same terms). Base rate was 3.75% on both 31 December 2025 and 30 June 2026, so 11.75% applies throughout 2026.
- Fixed compensation is £40 for a debt under £1,000, £70 for £1,000 to under £10,000 and £100 for £10,000 or more, once per payment (section 5A). Where your reasonable recovery costs exceed that sum you can claim the difference as well.
- Interest is simple, not compound: amount owed multiplied by the annual rate, divided by 365, multiplied by the days late. We do not round the daily figure before multiplying, so our totals can be a few pence above the shortcut in the gov.uk worked example.
- Statutory interest starts the day after the payment was due, at the rate prevailing at the end of that day (section 4). Check the base rate above and update it if your debt started running in an earlier six month period.
Late Payment Interest is an independent information site operated by Ellul Solutions Ltd. It is not affiliated with gov.uk, the Bank of England or any government body, and nothing here is legal advice. Statutory rates and thresholds are quoted from the official sources listed, with the date we read them; confirm the current base rate and take advice on your own contract before claiming.
Statutory interest and compensation on a late commercial invoice, 2026
Last updated
What a UK supplier can add to an unpaid business invoice at the 2026 statutory rate of 11.75% (Bank of England base rate 3.75% plus the statutory 8% margin), with the fixed compensation from section 5A of the Late Payment of Commercial Debts (Interest) Act 1998.
Every figure is computed with the formulas this page's calculator uses: interest = amount x 11.75% / 365 x days, rounded to the penny at the end; compensation from the section 5A bands (£40 under £1,000, £70 to under £10,000, £100 at £10,000 and above). Base rate of 3.75% read from the Bank of England on 15 August 2026 and applicable to interest starting in 2026 under the Rate of Interest Order 2002.
| Invoice amount | Interest per day | Interest after 30 days | Interest after 60 days | Fixed compensation | Claimable at 60 days |
|---|---|---|---|---|---|
| £750 | £0.24 | £7.24 | £14.49 | £40 | £54.49 |
| £1,000 | £0.32 | £9.66 | £19.32 | £70 | £89.32 |
| £5,000 | £1.61 | £48.29 | £96.58 | £70 | £166.58 |
| £10,000 | £3.22 | £96.58 | £193.15 | £100 | £293.15 |
| £25,000 | £8.05 | £241.44 | £482.88 | £100 | £582.88 |
| £50,000 | £16.10 | £482.88 | £965.75 | £100 | £1,065.75 |
| £100,000 | £32.19 | £965.75 | £1,931.51 | £100 | £2,031.51 |
- The UK statutory interest rate on late commercial payments is 11.75% a year in 2026: the Bank of England base rate of 3.75% plus the statutory 8% margin.
- A £10,000 business invoice paid 60 days late carries £193.15 of statutory interest plus £100 fixed compensation, so £293.15 can be added to the debt.
- Fixed compensation is £40 for debts under £1,000, £70 for £1,000 to just under £10,000, and £100 for £10,000 or more, claimable once per late payment.
Cite this page
“Statutory interest and compensation on a late commercial invoice, 2026”, Late Payment Interest, https://latepaymentinterest.co.uk/ (updated 2026-08-15). Every figure is computed with the formulas this page's calculator uses: interest = amount x 11.75% / 365 x days, rounded to the penny at the end; compensation from the section 5A bands (£40 under £1,000, £70 to under £10,000, £100 at £10,000 and above). Base rate of 3.75% read from the Bank of England on 15 August 2026 and applicable to interest starting in 2026 under the Rate of Interest Order 2002.
Invoice still unpaid after the chaser?
Tell us what you are owed and we will introduce you to a commercial debt recovery specialist or solicitor who works on business to business debts.
Guides
Every figure sourced and dated.
Statutory interest rate on late payments: base rate plus 8%
The UK statutory interest rate is 11.75% in 2026: base rate 3.75% plus 8%. Why the rate is fixed twice a year on 30 June and 31 December, and how to find your rate.
Late payment compensation: the £40, £70 and £100 fixed sums
Section 5A of the 1998 Act gives a fixed sum for recovering a late commercial debt: £40 under £1,000, £70 to under £10,000, £100 at £10,000 and above, plus real costs.
When is a commercial payment legally late? The 30 and 60 day rules
With no agreed date, payment is late 30 days after the invoice or delivery. Agreed terms are capped at 30 days for public authorities and 60 days for businesses.
Frequently asked
How do you calculate interest on a late payment in the UK?
Multiply the unpaid amount by the statutory rate, divide by 365, then multiply by the days late. In 2026 the rate is 11.75%, so £10,000 gives £3.22 a day and £193.15 after 60 days. Add the section 5A fixed sum of £40, £70 or £100 depending on the size of the debt.
What is the current statutory interest rate for late commercial payments?
11.75% a year: the Bank of England base rate of 3.75% plus the statutory 8% margin. The rate is set by the base rate in force on the preceding 30 June or 31 December, and base rate was 3.75% on both of the dates that govern 2026.
Can I charge late payment interest without mentioning it in my contract?
Yes. The right is implied into commercial contracts by the Late Payment of Commercial Debts (Interest) Act 1998, so it applies whether or not your terms mention it. The exception runs the other way: if your contract sets a different rate of interest for late payment, gov.uk says you cannot then claim statutory interest instead.
Do I have to charge late payment interest?
No. It is a right, not a duty, and many suppliers waive it to keep a customer. Where you do decide to charge it, gov.uk's guidance is to send a new invoice for the interest and compensation rather than adjusting the original one.
Does this apply to consumers who pay me late?
No. The 1998 Act covers commercial debts: business to business and business to public authority contracts for the supply of goods or services. A late paying private consumer is outside it, and any interest depends on your contract terms and consumer protection rules.
Why is your figure a few pence higher than the gov.uk example?
The gov.uk example rounds the daily interest to whole pence before multiplying by the days. On its own numbers, £1,000 at 8.5% is £85 a year and 23p a day, and it then shows 50 days as £11.50. Working from the unrounded daily rate gives £11.64. We round once, at the end, which is the more accurate figure to put on an invoice.
Know the exact figure before you send the chaser.
Interest to the penny, the right fixed sum, and the total to put on the new invoice.
Embed this tool
<script src="https://latepaymentinterest.co.uk/embed.js" async></script>