Work out the interest and compensation the law lets you claim on a late invoice, and get a claim letter ready to send.
| Invoice | Days late | Rate | Interest | Compensation |
|---|
Fill in the names and the letter is ready to print or send.
Under the Late Payment of Commercial Debts (Interest) Act 1998, a business that pays another business late owes it statutory interest of 8% a year above the Bank of England base rate, plus a fixed sum of compensation for each late invoice. Neither has to be written into your contract.
The base rate that counts is the one in force on 30 June or 31 December just before interest starts to run, and that rate then applies to the debt until it is paid. Interest starts the day after the payment date: the one in your contract or, if none was agreed, 30 days after your client received the invoice or the goods or services, whichever came later.
Interest = amount unpaid × rate × days late ÷ 365
Use the invoice total including VAT. The interest and the compensation carry no VAT of their own.
| Amount of the debt | Fixed sum |
|---|---|
| Under £1,000 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
If recovering the debt costs you more than that, for example a debt collection agency's fee, you can claim the reasonable difference as well.
A £5,000 invoice due on 1 August 2026 and paid on 30 September 2026 is 60 days late. Interest started on 2 August 2026, so the rate is 3.75% + 8% = 11.75%: £5,000 × 11.75% × 60 ÷ 365 = £96.58. With £70 of compensation, the claim comes to £166.58.
The Bank of England base rate on 30 June or 31 December, plus 8%. Checked on 24 October 2026 against the Bank of England's Bank Rate history.
| Interest starts between | Base rate | Statutory rate |
|---|---|---|
| 1 July to 31 December 2026 | 3.75% | 11.75% |
| 1 January to 30 June 2026 | 3.75% | 11.75% |
| 1 July to 31 December 2025 | 4.25% | 12.25% |
| 1 January to 30 June 2025 | 4.75% | 12.75% |
| 1 July to 31 December 2024 | 5.25% | 13.25% |
| 1 January to 30 June 2024 | 5.25% | 13.25% |
| 1 July to 31 December 2023 | 5.00% | 13.00% |
| 1 January to 30 June 2023 | 3.50% | 11.50% |
| 1 July to 31 December 2022 | 1.25% | 9.25% |
| 1 January to 30 June 2022 | 0.25% | 8.25% |
| 1 July to 31 December 2021 | 0.10% | 8.10% |
| 1 January to 30 June 2021 | 0.10% | 8.10% |
| 1 July to 31 December 2020 | 0.10% | 8.10% |
| 1 January to 30 June 2020 | 0.75% | 8.75% |
Late payment: claim for statutory interest and compensation
Dear ,
The invoice below was not paid by its due date.The invoices below were not paid by their due dates.
Under the Late Payment of Commercial Debts (Interest) Act 1998 we are entitled to statutory interest on iteach of them from the day after its due date, at 8% a year above the Bank of England base rate (), and to a fixed sum of compensation for each late invoice.
The amount now due is : of interest and of compensation, plus the still unpaid. Please pay it within 14 days of the date of this letter.
Interest continues to run on the unpaid amount at a day until it is paid.
Yours sincerely,
Interest calculated with the free late payment calculator at gocons.eu
The law that governs the contract. Most contracts choose it; when yours does not, a contract for services is usually governed by the law of the supplier's country, under the EU's Rome I Regulation and similar rules elsewhere. Choose that country in the calculator.
Not in the European Union, the United Kingdom and many other countries: the law adds interest, and usually a fixed sum of compensation, to every late invoice between businesses. In others, such as the United States, Canada and Australia, there is no statutory rate for business invoices: you charge the rate your contract sets, and without one only a court can award interest. The calculator then asks for your contract's rate.
Yes, where the law sets one. Under the EU Late Payment Directive and the UK Late Payment Act, the fixed sum is owed for each late invoice on top of the interest, and reasonable recovery costs above it can usually be claimed too. The calculator adds the amount the chosen country sets.
It depends on the country. Most of the EU applies each half-year's rate to the days in that half-year, while the UK keeps the rate in force when interest started until the debt is paid. The calculator follows the rule of the country you choose and shows the rates it used.
The rates are updated when central banks and governments publish them, usually for 1 January and 1 July. Until a new rate is in, the calculator says so rather than work with an old one.
No. The calculation and the letter are made in your browser. When you change country, the page only downloads that country's rules; your amounts, dates and names are never sent.
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