For commercial (business-to-business) debts under the Late Payment of Commercial Debts (Interest) Act 1998. Statutory interest is the Bank of England base rate plus 8%. Fixed compensation is £40 for debts under £1,000, £70 for £1,000–£9,999.99 and £100 for £10,000 or more. Consumer debts and contracts with their own interest terms differ. Not legal advice.
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This calculator works out what you are legally entitled to claim on an overdue business invoice: statutory interest and a fixed compensation sum. Enter the amount owed, how many days it is late and the Bank of England base rate, and it shows the interest built up and the total you can now ask for.
It is for tradespeople chasing commercial customers who pay late. Many do not realise that when another business pays you late, the law lets you add interest at 8% above base plus a fixed charge — and that simply putting the figure on a statement often prompts payment.
The interest rate is the Bank of England base rate plus 8%, applied for the days the invoice is overdue. On top sits a fixed compensation amount that steps up with the size of the debt, to cover the cost of chasing it.
Statutory interest = amount × (base rate + 8%) × days ÷ 365; Compensation = £40 / £70 / £100 by debt size
Statutory interest runs at the Bank of England base rate plus 8% on the overdue amount, pro-rated for the number of days it is late. On top you can claim fixed compensation for the cost of recovery: £40 for debts under £1,000, £70 for debts from £1,000 to £9,999.99, and £100 for debts of £10,000 or more.
Type the outstanding invoice amount. The interest and the compensation band are both worked out from this figure.
Count the days since the payment deadline passed — the agreed terms, or 30 days if nothing was agreed. Interest accrues daily, so the number matters.
Enter the current Bank of England base rate. The statutory rate is that plus 8%, so the calculator adds the 8% for you.
The calculator shows the statutory interest rate, the interest built up so far, the fixed compensation and the total now owed including the original invoice.
These rights apply to business-to-business debts under the Late Payment of Commercial Debts (Interest) Act 1998. They cover work for other businesses, landlords and the public sector — not private householders, whose late payment is governed by your contract terms and the small claims process instead.
If no payment date was agreed, the clock starts 30 days after you delivered the work or issued the invoice, whichever is later. You can claim interest from that point, and you can also recover reasonable costs above the fixed compensation if chasing the debt cost you more, for example debt-recovery fees.
In practice, the figures are as much a lever as a claim. Adding statutory interest and compensation to a reminder — and showing the customer you know your rights — often gets an invoice paid without going further. This tool is a guide to those figures, not legal advice; for persistent non-payment consider a letter before action or the small claims court.
For commercial (business-to-business) debts under the Late Payment of Commercial Debts (Interest) Act 1998. Statutory interest is the Bank of England base rate plus 8%. Fixed compensation is £40 for debts under £1,000, £70 for £1,000–£9,999.99 and £100 for £10,000 or more. Consumer debts and contracts with their own interest terms differ. Not legal advice.
For a commercial debt you can charge statutory interest at the Bank of England base rate plus 8%. On a £2,400 invoice 45 days late with a 5% base rate, that is 13% a year pro-rated for 45 days — about £38 — plus £70 fixed compensation, so roughly £108 on top of the invoice.
It is a fixed sum you can add to a late commercial invoice to cover the cost of chasing it, on top of the interest. It is £40 for debts under £1,000, £70 for debts between £1,000 and £9,999.99, and £100 for debts of £10,000 or more — one charge per late invoice.
Not automatically under this law — the statutory 8%-above-base rate and fixed compensation apply to business-to-business debts. For a private householder, your right to interest depends on the terms in your contract or quote. It is worth putting a clear late-payment clause in your terms so you are covered.
From the day after the agreed payment date. If you did not agree a date, the default is 30 days after you completed the work or sent the invoice, whichever is later. Interest can be claimed from that point until the debt is paid.
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