UK late payment interest calculator
UK statutory interest on a late business invoice is 8% a year plus the Bank of England base rate on 30 June or 31 December before interest starts: 11.75% for interest starting between 1 July and 31 December 2026. It is simple interest from the day after the due date. This calculator adds the fixed £40, £70 or £100 sum.
The calculator Work it out by hand When a payment is late
Calculator
The first row is an example. Replace it with your invoice, add more rows, or press Clear. Nothing you type leaves your browser.
| Amount outstanding (£) | Due date | Date paid, or calculate to | Your own yearly rate (%) | Remove |
|---|
Leave the last column empty to use the statutory rate. Fill it in only if your contract sets a rate: then that rate is used instead.
Result
How to calculate statutory interest on a late payment
- Interest starts the day after the due date (Late Payment of Commercial Debts (Interest) Act 1998, section 4).
- Find the reference date: 30 June if interest starts between 1 July and 31 December, or 31 December of the year before if it starts between 1 January and 30 June.
- Take the Bank of England Bank Rate in force on that date and add 8 percentage points. That is the yearly rate.
- Multiply the amount still owed by the yearly rate, then by the days late, then divide by 365. Count the days from the due date to the date paid.
- Add the fixed sum for the size of the debt: £40 up to £999.99, £70 from £1,000 to £9,999.99, £100 from £10,000. It is charged once per late payment.
Example. £1,000 due on 6 September 2026 and paid on 13 November 2026. Interest starts on 7 September, so the reference date is 30 June 2026, when Bank Rate was 3.75%. The yearly rate is 11.75%. It is 68 days late: £1,000 x 0.1175 x 68 / 365 = £21.89, plus the fixed £70, so £91.89 in all.
GOV.UK works its own example the same way: amount x rate, divided by 365 for a daily figure, then multiplied by the days late.
When a payment counts as late
The due date you enter is the day the payment became late. GOV.UK's page When a payment becomes late gives two cases.
- You agreed a payment date. The payment is late after that date. GOV.UK says an agreed date must usually be within 30 days for public authorities or 60 days for business transactions, and that businesses can agree a longer period if it is fair to both.
- You agreed no payment date. The law says the payment is late 30 days after the customer gets the invoice, or 30 days after you deliver the goods or provide the service if that is later.
The fixed sum on top of the interest
GOV.UK's page on debt recovery costs lets you charge a fixed sum as well as interest, once for each payment. The calculator adds it for each invoice.
| Amount of debt | Fixed sum |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
GOV.UK adds that a supplier can also claim reasonable costs each time it tries to recover the debt.
Bank Rate on each reference date
These are the figures the calculator uses, from the Bank of England's Bank Rate history, checked on 15 November 2026. Bank Rate has been 4.00% since 5 November 2026.
| Reference date | Bank Rate | Used when interest starts |
|---|---|---|
| 31 December 2021 | 0.25% | 1 January to 30 June 2022 |
| 30 June 2022 | 1.25% | 1 July to 31 December 2022 |
| 31 December 2022 | 3.50% | 1 January to 30 June 2023 |
| 30 June 2023 | 5.00% | 1 July to 31 December 2023 |
| 31 December 2023 | 5.25% | 1 January to 30 June 2024 |
| 30 June 2024 | 5.25% | 1 July to 31 December 2024 |
| 31 December 2024 | 4.75% | 1 January to 30 June 2025 |
| 30 June 2025 | 4.25% | 1 July to 31 December 2025 |
| 31 December 2025 | 3.75% | 1 January to 30 June 2026 |
| 30 June 2026 | 3.75% | 1 July to 31 December 2026 |
Interest that starts from 1 January 2027 uses the rate on 31 December 2026, which is not known yet. Until then the calculator uses the latest Bank Rate and says so in the result. For a debt that fell due before 2022, enter the rate yourself.
When statutory interest does not apply
- GOV.UK describes this interest for business to business transactions.
- You cannot claim it if your contract sets a different rate of interest (GOV.UK). Put that rate in the last column instead.
- GOV.UK adds that you cannot use a lower interest rate if you have a contract with public authorities.
- Send a new invoice if you decide to add interest to the money you are owed (GOV.UK).
This is general information, not legal advice. Ask a solicitor if the debt is large or disputed.
If your invoices are in Xero
Atesen Software, which publishes this guide, makes Lateby. It reads a Xero sales invoice export, works out the interest on every late invoice at the UK rate or at your own rate, and builds a Xero import file with one draft interest invoice per customer. It runs in your browser, the file is not uploaded and there is no Xero login. This calculator works without it.
The free plan works out interest for every customer and makes the import file and notices for the first three customers in each batch. The Practice plan covers every customer and any number of Xero organisations for US$19 a month or US$190 a year. FOUNDING40 takes 40% off the first payment until 30 November, and you can get a full refund within 14 days. Details on the Lateby site.
Comparing tools for late payers? See software for managing overdue invoices in Xero.
To do it by hand in Xero, read how to calculate late payment interest in Xero and import it as draft invoices, or how to charge interest on overdue invoices in Xero. For Stripe invoices, see UK late payment interest on Stripe invoices.
Other countries have their own rules. For an Irish invoice the rate is the ECB rate plus 8 points and it changes every half-year: use the Ireland late payment interest calculator. If your own terms set a fee instead, such as a percentage per month or a flat fee, use the late fee calculator for invoices.
Questions people ask
What is the UK statutory interest rate on late payments?
8% a year over the Bank of England Bank Rate in force on 30 June or 31 December before interest starts. For interest that starts between 1 July and 31 December 2026 the reference date is 30 June 2026, when Bank Rate was 3.75%, so the rate is 11.75%.
When does statutory interest start?
The day after the due date. Where no payment date was agreed, GOV.UK says the payment is late 30 days after the customer gets the invoice, or after you deliver the goods or provide the service if that is later.
Can I charge the fixed sum as well as interest?
Yes. GOV.UK allows a fixed sum on top of interest: £40 for a debt up to £999.99, £70 from £1,000 to £9,999.99 and £100 from £10,000. You can charge it once for each late payment.
Does it apply if my contract already sets a late payment rate?
No. GOV.UK says you cannot claim statutory interest if there is a different rate of interest in a contract. Enter the contract rate in the last column of the calculator to see that figure.
Do I send a new invoice for the interest?
GOV.UK says to send a new invoice if you decide to add interest to the money you are owed. This is general information and not legal advice.
Sources, checked on 15 November 2026: GOV.UK: when a payment becomes late, GOV.UK: charging interest on late commercial payments, GOV.UK: debt recovery costs, Late Payment of Commercial Debts (Interest) Act 1998, section 4, the Rate of Interest (No. 3) Order 2002 and the Bank of England Bank Rate history. Atesen Software is independent and not affiliated with Xero or the Bank of England. Xero is a trademark of Xero Limited. Questions: support@atesensoftware.com.