The short answer
If another business pays you late, you can usually claim interest at 8% a year above the Bank of England base rate, plus a fixed sum of £40, £70 or £100 depending on the size of the debt. That's the Late Payment of Commercial Debts (Interest) Act 1998, and it applies across the UK unless your contract sets its own rate.
Work it out
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| Days late | |
| Statutory interest rate | |
| Interest per day | |
| Interest so far | |
| Fixed compensation | |
| You can claim on top | |
| Including the debt |
How it's worked out
- Find the rate8% plus the Bank of England base rate on the reference date: 31 December for interest that starts running between 1 January and 30 June, and 30 June for interest that starts between 1 July and 31 December. The rate then stays fixed for that debt.
- Work out the daily interestAmount owed × rate ÷ 365. It's simple interest: no compounding.
- Count the daysFrom the day after payment was due to the day you're paid.
- Add the fixed sum£40 for a debt under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. Once per payment, not per reminder.
Example: £1,200 due on 1 August 2026 and paid on 30 September 2026 is 60 days late. The rate is 11.75% (8% + 3.75%), so interest is £1,200 × 11.75% ÷ 365 × 60 = £23.18, plus £70 fixed compensation.
| Interest starts running | Reference date | Base rate | Statutory rate |
|---|---|---|---|
| 1 July – 31 December 2026 | 30 June 2026 | 3.75% | 11.75% |
| 1 January – 30 June 2026 | 31 December 2025 | 3.75% | 11.75% |
| 1 July – 31 December 2025 | 30 June 2025 | 4.25% | 12.25% |
| 1 January – 30 June 2025 | 31 December 2024 | 4.75% | 12.75% |
| 1 July – 31 December 2024 | 30 June 2024 | 5.25% | 13.25% |
| 1 January – 30 June 2024 | 31 December 2023 | 5.25% | 13.25% |
Base rates from the Bank of England, checked on 13 October 2026. For other dates, look up the Bank Rate history and type it into the calculator.
When you can claim it
- Business to business only. It covers payments between businesses, including public bodies paying businesses. It doesn't apply to private customers.
- Your contract comes first. If your terms set their own late payment interest, that rate applies instead, as long as it's a fair remedy.
- When payment is late. On the date you agreed. If you didn't agree one, payment is late 30 days after the customer got your invoice, or after you delivered the goods or service if that's later.
- Reasonable costs. As well as the fixed sum, you can claim reasonable costs of recovering the debt, such as a debt collector's fees.
The government's guide to late commercial payments has the official version.
Late payment interest FAQs
Can I charge late payment interest to a private customer?
Not under the Late Payment Act, which only covers business-to-business debts. You can charge interest to a private customer only if your contract with them says so, and the term has to be fair.
Is the fixed compensation per invoice?
It's once for each payment that's late, not each time you chase it.
Does a later base rate change affect a debt that's already late?
No. The rate is fixed by the reference date for the period when the interest started running, so later changes don't alter it.
Do I have to claim it?
No. Many businesses mention it in a reminder and waive it if the invoice is paid promptly. It's your choice.
Before it gets this far
Most late payment arguments start with "I never agreed that amount." A signed quote and an invoice your client signed to confirm are hard to argue with. See A client won't pay. What counts as proof?
This calculator gives an estimate based on the rules as we understand them on 13 October 2026. It doesn't know the terms of your contract. If a lot of money turns on it, take advice from a solicitor.
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