Late payment interest calculator
Where a business customer pays late, the Late Payment of Commercial Debts (Interest) Act 1998 may entitle you to statutory interest and fixed compensation. Estimate the amounts here.
For invoices to other businesses only (not consumers), under the Late Payment of Commercial Debts (Interest) Act 1998. If your contract sets its own late-payment terms, those apply instead.
£104.77
on top of the £2,400.00 invoice
Your right to charge it
The Late Payment of Commercial Debts (Interest) Act 1998 applies to sales between businesses. Once a payment is late, you can add interest at 8% above the Bank of England reference rate, plus fixed compensation of £40, £70 or £100 depending on the size of the debt, and reasonable recovery costs beyond that.
The reference rate is Bank Rate on 31 December (for debts that fell due January to June) or 30 June (for July to December), and it stays fixed for that debt. If no payment date was agreed, payment is due 30 days after the invoice or delivery, whichever is later.
Many freelancers never use it, but stating it on invoices ("we charge interest under the Late Payment Act") is often enough to get paid on time.
Can I charge late payment interest to consumers?
Not under this law. It only covers business-to-business debts. For consumers you'd need a late payment term agreed in your contract.
Do I need it in my contract?
No. Statutory interest applies automatically to business debts unless your contract sets a different, substantial remedy for late payment.
How do I claim it?
Send the client a statement or a new invoice showing the interest and compensation, with how you worked it out. Many businesses use it as leverage to get the original invoice paid.
Which interest rate applies?
8% plus the Bank of England base rate on the reference day for the half-year the payment fell due in. For debts due in 2026 that's 8% + 3.75% = 11.75% a year.
Stop chasing. Start getting paid.
Fenquist sends friendly reminders before and after the due date, so you rarely need this tool.