UK Late Payment Calculator, Chasing Letter and PDF Report

The rules, in short

• Due date. The date agreed in the contract. If none was agreed, the Act allows a period of 30 days that begins on the later of the day the work was done or the goods delivered, and the day the customer got the invoice. (That day counts as day one, and interest starts the day after the period ends.)
• Interest. Runs from the day after the due date. The rate is fixed when interest starts to run: 8% a year plus the Bank of England Bank Rate on the 31 December before (for interest starting from 1 January to 30 June) or the 30 June before (for interest starting from 1 July to 31 December). It does not change if Bank Rate moves later. GOV.UK says to send a new invoice if you decide to add interest.
• Fixed compensation. £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more, for each late payment, charged once per payment. If your reasonable costs of recovering the debt come to more than the fixed sum, you can claim the difference.
• Contract terms. If your contract sets a different rate of interest, you cannot claim statutory interest on top. Under the Act, a contract can replace the statutory remedy only with a substantial one. Check your contract first.
• Disputes and original invoices only. You cannot claim on an invoice that was paid late because of a genuine dispute. Interest and compensation are charged on the original invoice, not on a later invoice for the interest.
• Time limit. Claims are generally limited to six years from when the debt fell due. Scotland has different limits.

How we work it out

For each invoice we add your payment terms to the invoice date to get the due date, then count days from the next day to the date paid (or the date you chose, if unpaid). The rate is worked out once, from the half-year in which interest starts: the Bank Rate on the 31 December or 30 June just before it began, plus 8%. Interest is simple interest, the unpaid amount times the rate times the days, divided by 365. Where a part payment changes the unpaid amount, the period is split at that point, and each part is rounded to the nearest penny and added up. Compensation is added once per late invoice.

Section 4(2) of the Act says interest runs at the rate prevailing at the end of the day the payment fell due, and the Court of Appeal applied the rate at that date in Crema v Cenkos Securities [2011]. The Small Business Commissioner’s calculator guidance describes a rate for each half-year instead, so the alternative method in Advanced options is there if you want to compare. If Bank Rate has not moved, both give the same answer. Bank Rate data was last checked on 16 October 2026.

Official sources

• Late Payment of Commercial Debts (Interest) Act 1998 (legislation.gov.uk)
• The 2002 Order that sets the rate: Bank Rate plus 8% (legislation.gov.uk)
• GOV.UK: charging interest on a commercial debt
• GOV.UK: claim debt recovery costs on late payments (fixed sums)
• Small Business Commissioner: official interest calculator
• Bank of England: Bank Rate history
• Practice Direction on Pre-Action Conduct and Protocols (justice.gov.uk), for before any court claim

Important

This tool gives estimates for information only. It is not legal, financial or tax advice, and it cannot know the terms of your contract or your circumstances. Rates and rules can change, and we may be out of date. Check figures against the official calculator and take professional advice before sending a demand or starting a claim. For anything contested, contact the Small Business Commissioner, Citizens Advice or a solicitor.

Common mistakes

• Counting from the invoice date instead of the due date.
• Claiming from a private customer. The rules this follows cover business customers only.
• Not keeping a record of the invoice, the due date and when you chased.
• Treating this as legal advice. Check the official guidance before you claim.