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Late payment interest calculator
Work out the statutory interest and the fixed compensation you can claim when a business pays your invoice late.
Enter the amount, the date it was due and the base rate to see what you can claim, and how it’s worked out.
The rule behind it
Under the Late Payment of Commercial Debts (Interest) Act 1998, a business can claim simple interest on a late payment from another business at 8% a year plus the Bank of England base rate. The base rate is the one in force on 31 December for payments that fall late between January and June, and on 30 June for payments that fall late between July and December. The year’s interest is divided by 365 to give a daily figure, which is multiplied by the days late.
You can also claim fixed compensation for the cost of recovering the debt: £40 on a debt up to £999.99, £70 on £1,000 to £9,999.99, and £100 on £10,000 or more. A rate in your contract replaces the statutory one.
Invoices past their due date are marked past due, and reminders go to the client with the invoice PDF attached.
Questions
Can I charge a consumer late payment interest?
Not under this law. It covers one business paying another, and public sector bodies paying businesses. With a consumer, you can only charge interest your contract with them allows.
When does the interest start?
The day after the payment was due. If no date was agreed, payment is late 30 days after the customer gets your invoice, or after you deliver the goods or the service.
Can I claim more than the fixed compensation?
You can also claim reasonable further costs of recovering the debt, such as a debt recovery agency’s fee, on top of the fixed sum.
How do I claim it?
Send your customer a new invoice for the interest and compensation, showing how they’re worked out.
Fourteen days of Team, in full
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