What this calculates

When a UK business client pays late, the Late Payment of Commercial Debts (Interest) Act 1998 gives you two automatic rights — no late-payment clause needed in your contract:

  1. Statutory interest at 8 percentage points above the Bank of England base rate, accruing daily (simple interest, not compound) from the day after payment was due until the day you are paid. Formula: (invoice amount × rate) ÷ 365 × days overdue.
  2. Fixed compensation per late invoice: £40 for debts under £1,000, £70 for £1,000–£9,999.99, £100 for £10,000 or more.

The calculator above applies exactly this. The Bank of England base rate is pre-filled with the rate verified on 13 October 2026 (3.75%, held at the sixth consecutive MPC meeting) — if your invoice went late under a different rate, adjust the field.

Not sure when the invoice actually became due? Our payment deadline calculator works it out from your invoice date and payment terms.

When you can use it

  • Business-to-business only. The Act covers invoices to companies, sole traders, partnerships and agencies. It does not cover invoices to private individuals acting as consumers.
  • Your contract matters. If your contract already sets its own interest rate for late payment, that rate governs and statutory interest does not stack on top.
  • You do not need to have mentioned it before. The right exists whether or not your invoice or contract mentioned late payment. Gov.uk advises sending a new invoice if you add interest to what you are owed.

How to use the number

Most freelancers never actually charge the interest — they use the figure as leverage. A calm, factual line in a chasing email (“this is what the Act says I could claim”) resolves more invoices than threats do. The calculator’s Copy as a polite email line button gives you exactly that sentence, ready to paste.

For the full picture — when an invoice legally counts as late, the “substantial remedy” exception, and how to raise the subject without burning the relationship — read our plain-English guide to your UK late-payment rights. New to the calculation itself? Our calculator usage guide walks through three worked examples and copy-paste email lines.

This page explains publicly available information from gov.uk, the Bank of England and the legislation itself. It is not legal advice. For a disputed or high-value debt, speak to a solicitor.