Late payment interest calculator
When another business pays an invoice late, you can claim interest at 8% a year over Bank Rate, which makes it 11.75% on interest that starts to run now, plus a fixed sum of £40 to £100. Enter the invoice to see what you can claim, under the Late Payment of Commercial Debts (Interest) Act 1998.
It runs in your browser: nothing you enter is sent anywhere or kept. Business-to-business invoices in the UK; Bank Rate from the Bank of England, read 16 October 2026.
How late payment interest is worked out
- Find the day it became late. Interest starts the day after the agreed payment date. With no date agreed, the payment is late 30 days after the customer had the invoice, or after you delivered, if that was later (GOV.UK, section 4 of the Act).
- Find the rate. 8% a year over Bank Rate, taken on 30 June for interest that starts between July and December, or on 31 December for interest that starts between January and June (the rate order; Scotland’s is the same). The rate is fixed for that debt.
- Work out a day’s interest. The amount owed times the rate gives a year’s interest; divide by 365 for a day’s (GOV.UK).
- Multiply by the days late, and add the fixed sum for recovery costs (GOV.UK).
A worked example
An invoice for £2,400.00 was due on 31 July 2026 and paid on 15 October 2026. Interest started on 1 August 2026, so the rate is 8% over Bank Rate on 30 June 2026 (3.75%): 11.75%. A year’s interest is £282.00, a day’s is £0.77, and 76 days late comes to £58.72. The fixed sum for a debt of £2,400.00 is £70.00, so the claim is £128.72.
Statutory interest rates by date
| Interest that starts between | Bank Rate on | Bank Rate | Statutory rate |
|---|---|---|---|
| 1 July 2026 and 31 December 2026 | 30 June 2026 | 3.75% | 11.75% |
| 1 January 2026 and 30 June 2026 | 31 December 2025 | 3.75% | 11.75% |
| 1 July 2025 and 31 December 2025 | 30 June 2025 | 4.25% | 12.25% |
| 1 January 2025 and 30 June 2025 | 31 December 2024 | 4.75% | 12.75% |
| 1 July 2024 and 31 December 2024 | 30 June 2024 | 5.25% | 13.25% |
| 1 January 2024 and 30 June 2024 | 31 December 2023 | 5.25% | 13.25% |
Bank Rate has been 3.75% since 18 December 2025 (Bank of England, read 16 October 2026).
Fixed sums for recovery costs
| Amount of the debt | Fixed sum |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
It can be charged once for each payment, on top of the interest. A supplier can also claim reasonable costs each time they try to recover the debt (GOV.UK).
When is a payment late?
If you agree a payment date, it must usually be within 60 days for business transactions, or 30 days for public authorities. A longer period between businesses is allowed if it is fair to both. If no date is agreed, the payment is late 30 days after the customer gets the invoice, or after you deliver the goods or service if that is later (GOV.UK).
A contract with its own interest rate replaces statutory interest: you cannot claim both (GOV.UK). This page sets out the rules as GOV.UK and the legislation state them; it is not legal advice.
HMRC late payment interest is something else
HMRC charges its own interest on tax paid late: 7.75% from 9 January 2026, set at Bank Rate plus 4% since 6 April 2025 (it was plus 2.5% before). It has nothing to do with invoices between businesses (GOV.UK, read 16 October 2026). The way to avoid it is to know the dates: see the Self Assessment tax return guide and the company deadlines calculator.
Chase it before it is late
Interest makes up for a late payment; it rarely makes up for the wait. If you use Xero, Radar reads your sales invoices and puts the overdue ones in its Money panel beside your deadlines, sorted by risk, with the most pressing in “Closing in”, so the money owed to you is in front of you every morning, not just on accounts day. It is read-only: the chasing, and any claim, stays yours. Overdue invoices in Xero, on your Radar.
Questions
What is the late payment interest rate in 2026?
11.75% a year for interest that starts to run in 2026: 8% over Bank Rate of 3.75%, the rate in force on both 31 December 2025 and 30 June 2026. The rate is fixed for each debt by the day interest starts, and does not change while it runs. (legislation.gov.uk, Bank of England)
Can I charge interest on a late invoice?
Yes, when another business pays you late for goods or a service, unless your contract sets a different rate of interest, which then applies instead. (GOV.UK, GOV.UK)
How do you calculate late payment interest?
Multiply the amount owed by the rate to get a year’s interest, divide by 365 for a day’s, and multiply by the days it has been late. On £1,000 at 11.75%, that is £117.50 a year, or about 32p a day. (GOV.UK)
How much can I charge for late payment?
Interest, plus a fixed sum for the cost of recovering the debt: £40 on a debt up to £999.99, £70 from £1,000 to £9,999.99 and £100 from £10,000, once for each payment. A supplier can also claim reasonable costs each time they try to recover the debt. (GOV.UK)
What is the HMRC late payment interest rate?
7.75% from 9 January 2026. HMRC sets it at Bank Rate plus 4% (since 6 April 2025), and it applies to tax paid late, not to invoices. (GOV.UK)
Sources, read 16 October 2026: GOV.UK: when a payment becomes late · GOV.UK: interest on late commercial payments · GOV.UK: debt recovery costs · Late Payment of Commercial Debts (Interest) Act 1998, s. 4 · Rate of Interest (No. 3) Order 2002, art. 4 · Rate of Interest (Scotland) Order 2002, art. 4 · Bank of England: Bank Rate · HMRC interest rates
See what you are owed beside what you owe
Radar puts overdue invoices, deadlines and your calendar on one radar for the next ninety days, so a late payment is seen while there is still time to chase it.