Late payment interest calculator
Late Payment Interest Calculator UK
Calculate estimated statutory interest and fixed recovery costs on overdue commercial invoices.
Statutory interest generally applies to qualifying commercial debts where another business is late paying for goods or services. Different rules may apply where your contract already specifies an interest remedy. Enter the reference rate that applies to your debt — see Bank of England Bank Rate history.
£0.00
over 0 days overdue
- Invoice amount
- £2,000.00
- Days overdue
- 0
- Annual rate used
- 12.75%
- Daily interest
- £0.70
- Estimated fixed recovery cost
- £0.00
- Estimated total
- £2,000.00
Estimate only. Additional reasonable recovery costs may sometimes be claimable beyond the fixed amount; this calculator does not estimate them.
How much interest can you charge on a late UK commercial invoice?
UK statutory interest on qualifying late commercial payments is generally calculated at 8 percentage points above the applicable Bank of England reference rate. It is simple interest on the unpaid debt, and a separate fixed recovery amount may also apply. This calculator gives an estimate and does not decide entitlement.
How the calculation works
annualRate = referenceRate + 8 (statutory)
annualInterest = debt × annualRate ÷ 100
dailyInterest = annualInterest ÷ 365
interest = dailyInterest × daysOverdue
daysOverdue = max(0, calculationDate − dueDate)
Interest is simple, not compounded: it does not accrue on interest already added. Days overdue are counted in whole days from the day after the payment was due up to the payment date, or to whatever date you want to calculate up to.
For statutory late-payment interest, the applicable reference rate can depend on the six-month period in which the debt became late, so today's Bank of England rate is not automatically the right rate for an older overdue invoice. PoundKit asks you to enter the rate rather than assuming one, and the calculation engine is built so a rate-history table can be added later.
When does a commercial payment become late?
If you agreed a payment date with the customer, lateness generally starts after that date.
If no payment date was agreed, UK rules may treat payment as late 30 days after a relevant trigger — such as receipt of the invoice or delivery of the goods or services — depending on the circumstances.
This calculator does not guess those dates. It counts days from the due date you enter, so supply the date that genuinely applies to your situation. See the GOV.UK guidance on when a payment becomes late.
Worked example
Illustrative only — not a current rate
A £1,000 commercial invoice is 50 days overdue. Using an illustrative Bank of England reference rate of 4.75%, the statutory rate would be 4.75% + 8% = 12.75%.
- Annual interest: £1,000 × 12.75% = £127.50
- Daily interest: £127.50 ÷ 365 = £0.349
- Interest over 50 days: £0.349 × 50 = £17.47
- Fixed recovery amount for a £1,000 debt: £70.00
- Estimated total: £1,000 + £17.47 + £70.00 = £1,087.47
The reference rate above is an example figure for illustration. Use the rate that applies to your own debt in the calculator.
Fixed recovery costs
For qualifying commercial debts, a fixed recovery amount can be claimed in addition to interest:
- Debt up to £999.99 — £40
- Debt £1,000 to £9,999.99 — £70
- Debt £10,000 or more — £100
Additional reasonable recovery costs may sometimes be claimable beyond the fixed amount; this calculator does not estimate them because they depend on what you actually spent chasing the debt. See GOV.UK — claim debt recovery costs on late payments.
Contractual vs statutory interest
Statutory interest
Generally applies to qualifying commercial debts where another business is late paying for goods or services, at 8 percentage points above the applicable Bank of England reference rate. Different rules may apply where your contract already specifies an interest remedy.
Contractual interest
Where your agreement sets its own late-payment rate, model that rate here. This calculator does not determine whether a contractual rate is legally enforceable, and a contract does not automatically override statutory rules — check the terms and take advice where the amount matters.
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Official sources
This page was written against the GOV.UK guidance on late commercial payments. PoundKit is not affiliated with GOV.UK and this tool is information only, not legal advice.
See the freelancer invoicing workflow guide for chasing overdue invoices in practice.
Editorial review
Last reviewed .
Official guidance checked:
- GOV.UK — Late commercial payments: charging interest and debt recovery (opens in a new tab)
- GOV.UK — Late commercial payments: when a payment becomes late (opens in a new tab)
- GOV.UK — Claim debt recovery costs on late payments (opens in a new tab)
Calculation logic reviewed .
Information only — not tax or legal advice. Always check current guidance on GOV.UK for your situation.
Questions
What interest can I charge on a late business invoice?
Where a commercial debt qualifies under UK late payment rules, statutory interest is generally calculated at 8 percentage points above the applicable Bank of England reference rate, as simple interest on the unpaid amount. If your contract already sets out an interest remedy, the contractual terms may apply instead. This calculator produces an estimate only and does not decide what you are entitled to recover.How is late-payment interest calculated?
Simple interest, not compound. Multiply the debt by the annual interest rate, divide by 365 to get a daily amount, then multiply by the number of days the payment is overdue.Can I charge interest if my contract already has a late-payment clause?
Where an agreement contains its own interest remedy, that contractual term may apply instead of the statutory rate. Whether a particular clause is enforceable depends on the contract and the circumstances, so use the contractual option here only to model the rate stated in your agreement.When is an invoice considered late?
If you agreed a payment date, lateness generally begins after that date. If no payment date was agreed, UK rules may treat payment as late 30 days after a relevant trigger such as receipt of the invoice or delivery of the goods or services, depending on the circumstances.Can I charge a fixed recovery fee as well as interest?
For qualifying commercial debts there is a fixed recovery amount in addition to interest: £40 for debts up to £999.99, £70 for debts from £1,000 to £9,999.99, and £100 for debts of £10,000 or more. Additional reasonable recovery costs may sometimes be claimable beyond the fixed amount; this calculator does not estimate them.Does this calculator apply to consumer debts?
No. This tool is for commercial and business-to-business debts, not ordinary consumer debts. Different rules apply where the customer is a consumer rather than another business.