Calculate the statutory interest and compensation you're owed on overdue UK invoices.
Did you know UK law automatically entitles you to charge statutory interest on every overdue B2B invoice — no contract clause needed? Under the Late Payment of Commercial Debts Act 1998, the interest rate is 8% above the Bank of England base rate, plus fixed compensation of up to £100 per invoice. This calculator works it all out instantly.
Most businesses don't realise how much they're legally owed — or use this figure as leverage to get paid faster. Simply enter the invoice amount and due date. Quote the result in your chasing emails and watch response rates improve immediately.
This calculator gives you:
Current BoE base rate: 4.75% — update if it has changed.
* This is an estimate for guidance only. The statutory interest rate is 8% above the Bank of England base rate at the date payment was due. Fixed compensation is £40 for debts <£1,000, £70 for £1,000–£9,999, or £100 for £10,000+.
✅ This invoice is not yet overdue — no interest applies.
Every year, UK small businesses write off billions of pounds in unpaid invoices. Late payment is one of the leading causes of small business failure in the UK — and yet many business owners are completely unaware that the law gives them the right to claim statutory interest and fixed compensation on every overdue B2B invoice, automatically, with no agreement from the debtor required.
The Late Payment of Commercial Debts (Interest) Act 1998 (as amended in 2002) gives businesses the right to charge statutory interest on overdue commercial invoices at a rate of 8% above the Bank of England base rate. As of early 2026, with the base rate at 4.75%, this means you can charge 12.75% per annum on overdue invoices — significantly above most other forms of unsecured borrowing.
In addition to interest, the Act entitles you to claim fixed compensation for the cost of recovering the debt, based on the invoice amount:
This compensation is in addition to statutory interest and can be claimed on each individual overdue invoice — so if a client owes you five overdue invoices, you can claim the fixed compensation five times over.
The Late Payment Act applies to commercial transactions — i.e., transactions between businesses. It does not apply to consumer debts (B2C). Both parties must be acting in the course of a business. The Act applies automatically — you do not need to have included any late payment clause in your contract for these rights to apply.
However, the Act can be modified or excluded by contract in some circumstances. If your contract specifies a different interest rate for late payment, that rate applies instead of the statutory rate, provided it is not "substantially" lower than the statutory rate (which would be void under the Act).
The most effective approach to chasing late payment is a structured, escalating series of reminders: a friendly reminder the day payment is due, a firmer chasing email at 7 days overdue, a formal letter at 14 days, and a statutory demand or solicitor's letter at 30 days. At each stage, quoting the exact amount of statutory interest that has accrued demonstrates that you are serious and commercially aware — and often prompts payment.
PaidInstantly's WhatsApp automation handles the first two stages automatically, sending polite payment prompts via WhatsApp at the optimum times to maximise response rates — freeing your bookkeeper to focus on the harder cases.
No. The Late Payment of Commercial Debts Act 1998 applies automatically to all B2B commercial transactions in the UK, even if your contract is silent on the matter. You are entitled to charge statutory interest and the fixed compensation from the day after the invoice's due date.
Under the Act, if no payment terms are specified, invoices become due 30 days after the later of: (a) the date of delivery of goods/services, or (b) the date the invoice was received. If your invoice specifies payment terms (e.g. "Net 30"), the due date is as stated. Late payment interest starts accruing the day after the due date.
Most businesses never actually demand the statutory interest — simply mentioning that you are aware of your rights under the Late Payment Act and have calculated the accrued amount is usually enough to prompt payment of the original invoice. You can always waive the interest as a goodwill gesture once the principal has been paid. The key is using it as a negotiating tool, not a first-response ultimatum.
The formula used by the UK Courts and this calculator is:
(Debt × Statutory Rate) ÷ 365 × Days Overdue
Example: A £5,000 invoice is 30 days late. The BoE rate is 4.75%, making the statutory rate 12.75%.
(£5,000 × 0.1275) ÷ 365 = £1.74 (daily interest rate)
£1.74 × 30 days = £52.20 total interest.
In addition to the interest, you append the Fixed Compensation Fee: £70 in this case (for debts between £1,000 and £9,999.99). Your total claim would be £122.20.
UK bookkeepers use PaidInstantly to send automatic WhatsApp reminders before invoices even go overdue — cutting average payment time from 45 days to 7, without a single chase call or manually written email.
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