Works out the statutory interest and fixed compensation a creditor may charge on an overdue B2B debt, under the Late Payment of Commercial Debts (Interest) Act 1998.
Add a row per invoice, settled (paid date) or still outstanding (as-at date).
For guidance only. Confirm the applicable base rate for the period with GOV.UK and verify figures with your accountant before invoicing.
About this late payment interest calculator
This free late payment interest calculator works out what a business can charge on overdue commercial invoices under the Late Payment of Commercial Debts (Interest) Act 1998, the statutory interest plus the fixed compensation per invoice. It is aimed at contractors, subcontractors, freelancers and credit controllers chasing overdue business-to-business payments. Add a row per invoice (amount, due date, and whether it is paid or still outstanding), and it returns the days late, statutory interest, fixed compensation and total owed for each invoice and the whole batch. Everything runs in your browser. Nothing is uploaded.
How late payment interest is calculated
The statutory rate is 8% + the Bank of England base rate (LPCDIA 1998; SI 2002/1675 art.4). Simple daily interest is principal × rate ÷ 365 × days late, not compounded, and kept at full precision rather than rounding the daily figure to the penny first. Fixed compensation (s.5A) is a flat sum by debt size: £40 under £1,000, £70 from £1,000 to under £10,000, and £100 at £10,000 or more, one payment per invoice, not pro-rated by lateness. Days late run from the due date to the paid date, or to your as-at date for still-outstanding invoices.
Frequently asked questions
What base rate should I enter?
Use the Bank of England base rate that applied on the relevant reference date, 30 June for debts becoming late in the second half of the year, 31 December for the first half. The default is the latest reference-date value; override it for older debts, and confirm the correct historical rate on GOV.UK before invoicing.
Is the fixed compensation scaled by how late the invoice is?
No. It is a single flat sum (£40 / £70 / £100) banded only by the size of the debt, added once per late invoice regardless of whether it is a day or a year overdue. If your reasonable costs of recovering the debt exceed the fixed sum, s.5A(2A) lets you claim the balance on top. That extra is not calculated here.
Can I use this for consumer (B2C) debts?
No. The Act covers commercial (business-to-business) debts only. For consumer debts, interest and charges are governed by the contract terms and consumer-credit rules instead. Treat the output as indicative and confirm the figures with your accountant or adviser before relying on them.