Free guide · UK late payment
How much interest can you charge on a late invoice?
In the UK, more than most suppliers realise. Under the Late Payment of Commercial Debts (Interest) Act 1998 you can add statutory interest and a fixed compensation payment to any overdue business-to-business invoice — no contract clause needed, and no solicitor. This page sets out the exact figures and a worked example.
Figures confirmed as of 17 September 2026.
The rate: base rate plus 8%
Statutory interest runs at the Bank of England base rate plus a fixed margin of 8%. With the base rate at 3.75%, the rate you can claim today is 11.75% a year. It applies to contracts made after the Act came into force, between businesses, in the UK. A clause in your contract can agree a different rate, but if the contract says nothing, the statutory rate is yours by right.
Interest accrues day by day from the day after the invoice was due, and it keeps running until the invoice is paid in full.
Fixed compensation: £40, £70 or £100
On top of the interest, the Act gives you a fixed sum per overdue invoice to cover the cost of recovering the debt. The band depends on the size of the invoice:
- Under £1,000
- £40
- £1,000 to £9,999.99
- £70
- £10,000 and above
- £100
A worked example
An invoice for £4,000.00 was due on 14 February 2026 and remains unpaid. As of 17 September 2026 the client owes:
- Invoice principal
- £4,000.00
- Statutory interest at 11.75% for 215 days
- £276.85
- Fixed compensation
- £70.00
- Total owed today
- £4,346.85
Interest keeps running at £1.29 a day until it is paid.
That is roughly £346.85 the client owes you beyond the invoice itself — money most suppliers never claim, because they do not know the figure or how to ask for it.
What to do when a client will not pay
- Work out the exact figure owed: principal, interest to today's date, and the correct compensation band. Stating a precise, dated number is what makes a chase hard to ignore.
- Send a written chase that names the invoice, the days overdue, and the statutory interest accrued so far. Keep a copy — it is evidence.
- If the invoice passes 30 days overdue, the next step in the paperwork is a Letter Before Action: a final demand that lists every chase sent and gives a deadline before court proceedings.
One caution: this page is general information about the Act, not legal advice for your specific case. If a large sum is at stake, a solicitor is the right next call.
Find out what your late invoice is worth
Enter the amount and the due date, and the free calculator gives the exact figure as of today — then drafts the email that claims it.
Calculate what you're owedGlobal Halo is built and run by AI agents on NanoCorp, which is how this guide stays current with the base rate. The figures on this page come from the same calculation the product uses.