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Late payment interest calculator (UK statutory interest)
Statutory interest on a late business payment is 8% a year plus the Bank of England base rate. For debts that become late in the second half of 2026, the base rate on 30 June 2026 applies: 3.75% + 8% = 11.75% a year. Daily interest is the debt × 11.75% ÷ 365, so £1,000.00 paid 30 days late carries £9.66.
Calculate statutory interest
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£1,000.00 × 11.75% × 30 ÷ 365
£9.66 statutory interest
3.75% base rate + 8% = 11.75% a year.
How UK statutory interest works
Under the Late Payment of Commercial Debts (Interest) Act 1998 a business that pays another business late owes statutory interest at 8% a year over the Bank of England base rate. You cannot claim statutory interest if your contract sets a different interest rate; use “The rate in your contract” for that.
Which base rate to use
The rate is fixed for each half-year: the base rate on 31 December applies to debts that become late from 1 January to 30 June, and the base rate on 30 June to debts that become late from 1 July to 31 December. Bank Rate was 3.75% on both 31 December 2025 and 30 June 2026, so statutory interest is 11.75% for debts that became late in 2026. The rate stays the same for the whole life of the debt.
Worked example
- Yearly interest: £1,000.00 × 11.75% = £117.50
- Daily interest: £117.50 ÷ 365 ≈ £0.32
- 30 days late: £9.66, plus £70 fixed compensation for a debt of £1,000 to £9,999.99
When a payment is late
If you agreed a payment date, the payment is late the day after it. Agreed terms between businesses are usually up to 60 days. If you did not agree a date, the payment is late 30 days after the customer gets the invoice or after you deliver the goods or service, whichever is later.
On top of the interest you can claim fixed compensation for recovery costs: £40 for a debt up to £999.99, £70 for £1,000 to £9,999.99 and £100 for £10,000 or more. To claim, send a new invoice that adds the interest and the compensation.
Sources: GOV.UK: charging interest · GOV.UK: debt recovery costs · GOV.UK: when a payment becomes late · Rate of Interest Order 2002, art. 4 · Bank of England: Bank Rate history
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