Late Payment Interest Calculator (UK)

For debts that become late in 1 July 2026 – 31 December 2026 it is 11.75%: the fixed 8% plus the Bank of England base rate of 3.75% that applied on 30 June 2026. The rate is set by the six-month period in which the invoice became overdue and stays fixed for that debt, even if base rate later moves.

Any business (including sole traders and freelancers) owed money by another business or a public sector body. It does not apply to sales to consumers — for those you need an interest term in your contract that is fair under the Consumer Rights Act 2015.

The day after the agreed due date. If you never agreed a payment date, the law sets it at 30 days after the customer received the invoice or the goods/services, whichever is later.

Debt × annual rate ÷ 365. On £2,000 at 11.75% that is £0.64 a day. Statutory interest is simple interest, not compound.

On top of interest you can claim a fixed sum per invoice for the cost of recovering it: £40 for debts under £1,000, £70 for £1,000–£9,999.99 and £100 for £10,000 or more. You can also claim reasonable recovery costs above that if you incur them.

Yes. Statutory interest runs on the full amount owed, including VAT. You do not charge VAT on the interest or compensation itself.

No — the right is automatic for B2B debts, even if your contract does not mention it. In practice, telling the client in a reminder that interest is accruing is often what gets the invoice paid.