Late Payment Interest Calculator
Calculate the statutory interest and fixed compensation you're entitled to for overdue B2B invoices under UK law.
Late Payment Interest Calculator
Calculate statutory interest & compensation for overdue invoices
Current base rate as of April 2026. Statutory interest = base rate + 8%.
How Late Payment Interest Works in the UK
Under the Late Payment of Commercial Debts (Interest) Act 1998, UK businesses have a statutory right to charge interest on overdue invoices for business-to-business (B2B) transactions.
Statutory Interest Rate
The statutory interest rate is 8% per annum above the Bank of England base rate. This interest accrues daily from the day after the payment due date.
Fixed Compensation
In addition to interest, you can claim a fixed sum as compensation for debt recovery costs:
2026 Late Payment Reform
The UK government has introduced enhanced protections for small businesses against late payments in 2026. Key changes include stricter enforcement of the Prompt Payment Code, enhanced reporting requirements for large businesses on their payment practices, and improved access to dispute resolution mechanisms.
These reforms aim to reduce the average payment delay that costs UK small businesses billions annually and can threaten their cash flow and survival.
Automate Late Payment Interest
Experi automatically calculates and applies late payment interest to overdue invoices. Chase payments professionally and know exactly what you're owed.
Frequently Asked Questions
What is the statutory interest rate for late payment in the UK?
The statutory interest rate for late commercial payments is 8% above the Bank of England base rate. As of 2026, with a base rate of 4.75%, the total statutory rate is 12.75%. This is set by the Late Payment of Commercial Debts (Interest) Act 1998.
How much fixed compensation can I claim for a late payment?
You can claim fixed compensation on top of interest: £40 for debts up to £999.99, £70 for debts between £1,000 and £9,999.99, and £100 for debts of £10,000 or more. This is per invoice, not per payment.
When does an invoice become overdue?
An invoice becomes overdue the day after the agreed payment terms expire. If no terms are specified, the default payment period is 30 days from either the delivery of the invoice or the delivery of the goods/services, whichever is later.
What is the 2026 Late Payment Reform?
The UK government has introduced late payment reforms in 2026 to strengthen protections for small businesses. These include stricter enforcement of the Prompt Payment Code, enhanced reporting requirements for large businesses, and improved dispute resolution mechanisms for late payment claims.