What is the Late Payment of Commercial Debts Act?

The Late Payment of Commercial Debts (Interest) Act 1998 gives UK businesses the right to charge statutory interest on unpaid commercial invoices. The statutory rate is 8% over the Bank of England base rate per annum, and businesses can also claim a fixed compensation fee of £40, £70 or £100 depending on the invoice value.

How does this calculator help?

Enter the invoice amount, the agreed payment date and the date of actual payment. The calculator shows the statutory interest accrued and the fixed compensation fee you are entitled to charge under the Late Payment Act.

Do I have to charge statutory late payment interest?

No, it is your right to charge it — not an obligation. Many businesses choose to claim it on persistently late invoices, or use the entitlement as a prompt-payment incentive in contract terms.

Calculator

Late-payment interest.

When another business pays your company late, UK law lets you claim statutory interest and a fixed sum on top of the debt. Enter the invoice, how late it is and the base rate. General information, not legal advice.

Invoice amount excluding VAT

Days overdue

Bank of England base rate % at the time

Statutory interest rate—
Interest accrued—
Fixed compensation—
Total you could claim—

—

Statutory interest is 8% plus the Bank of England base rate. Fixed compensation is £40 under £1,000, £70 for £1,000–£9,999.99, and £100 for £10,000 or more. Enter the base rate that applied — this tool does not look it up. General information only.

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