Late payment interest calculator for unpaid invoices.

Multiply the unpaid amount by the annual rate, divide by 365 to get the daily interest, then multiply by the number of days late. For a business invoice with no agreed rate, the statutory rate is 8% over the Bank of England base rate: 11.75% on the 3.75% base rate fixed from 1 July 2026. On £2,500 that is £0.80 a day, so 45 days late comes to £36.22, plus £70 fixed compensation.

It is 8% a year over the Bank of England base rate. The base rate is fixed twice a year: the rate in force on 31 December applies to interest that starts between 1 January and 30 June, and the rate on 30 June applies from 1 July to 31 December. The rate for interest starting from 1 July 2026 is 11.75%. Once interest has started on an invoice, that rate stays with it.

If you agreed a payment date, the invoice is late the day after it. If you did not, the law says payment is late 30 days after the customer gets the invoice, or after you deliver the goods or provide the service, whichever is later. Agreed terms must usually be within 30 days for public authorities and 60 days between businesses, unless a longer period is fair to both sides.

Yes. Statutory interest applies to business-to-business contracts automatically, so you do not need a clause in your terms. If your contract does set its own late-payment interest rate, that rate applies and you cannot claim statutory interest instead. You cannot use a lower rate than the statutory one in a contract with a public authority.

A fixed sum on top of the interest, once for each late invoice: £40 for a debt under £1,000, £70 for £1,000 up to £9,999.99, and £100 for £10,000 or more. If your reasonable costs of recovering the debt are higher than the fixed sum, you can claim the difference as well.

Not under these rules. The Late Payment of Commercial Debts (Interest) Act 1998 covers contracts where both sides are acting in the course of a business, including sales to public authorities. Interest on a consumer debt depends on what your contract says.

No. This calculator is for an invoice one business owes another. Interest HMRC charges on tax paid late uses a different rate and comes with separate penalties; use our HMRC interest and penalties calculator for that.

Send the customer a new invoice, or a written notice, showing the amount owed, the interest and the compensation, and how you worked them out. You do not have to claim it every time, and many businesses use the right to it as a reason to be paid promptly. Interest you receive is business income and belongs in your accounts.