UK Late Payment Calculator
UK late payment calculator — calculate statutory interest and fixed compensation on overdue UK business invoices under the Late Payment Act. No signup needed.
Disclaimer: This tool provides estimates for informational purposes only and does not constitute financial, tax, or legal advice. Results may vary based on your specific circumstances. Always consult a qualified professional before making financial decisions.
UK business law gives you the legal right to charge interest and a fixed compensation fee when a client pays late on a commercial invoice. The Late Payment of Commercial Debts (Interest) Act 1998 sets the statutory interest rate at 8% per annum above the Bank of England base rate, and adds a fixed compensation fee that scales with the invoice amount. Most UK freelancers and small businesses never claim this because they do not know the exact figures — this calculator works them out instantly.
Enter the invoice amount, the payment due date, and the date payment was actually received (or today if still unpaid). The tool calculates the statutory interest accrued for the number of days overdue, the fixed compensation amount, and the total you are entitled to add to your payment demand or final invoice.
The fixed compensation tiers under the Act are: £40 for invoices under £1,000; £70 for invoices between £1,000 and £9,999.99; and £100 for invoices of £10,000 or more. These are added on top of the daily interest, not instead of it.
Who this is for: UK-based freelancers, contractors, and small businesses chasing overdue commercial invoices. The Act applies to B2B transactions — both parties must be acting in the course of a business. It does not apply to consumer contracts.
Practical use: copy the calculated interest and compensation figures into your overdue payment chasing email or formal demand letter. Quoting the statutory amounts under the Act signals that you know your rights and often prompts faster payment without needing to escalate further. You do not need to include a late payment clause in your original invoice for the statutory right to apply.
Frequently Asked Questions
- Does this apply to both business-to-business and business-to-consumer invoices?
The Late Payment of Commercial Debts Act applies to B2B transactions. Consumer contracts are governed by different rules. This calculator is for business invoices.
- Can I charge late payment interest on every invoice?
Statutory late payment interest applies automatically to qualifying commercial debts in the UK. You do not need to include a late payment clause in your invoice for it to apply, though adding one makes your policy clear upfront.
- What are the compensation fee tiers?
The fixed compensation is £40 for invoices under £1,000, £70 for invoices between £1,000 and £9,999.99, and £100 for invoices of £10,000 or more. These are in addition to the interest accrued.
- Is there a free UK late payment interest calculator?
Yes. This late payment calculator is completely free. Enter the invoice amount, due date, and payment date to calculate statutory interest and fixed compensation under the Late Payment of Commercial Debts Act. No signup required.
- How is late payment interest calculated in the UK?
Statutory late payment interest under the Late Payment of Commercial Debts Act is calculated at 8% per annum above the Bank of England base rate. The fixed compensation is £40 for debts under £1,000, £70 for £1,000–£9,999, and £100 for £10,000 and over.
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