What this calculates

When a UK business client pays late, the Late Payment of Commercial Debts (Interest) Act 1998 gives you two automatic rights — no late-payment clause needed in your contract:

  1. Statutory interest at 8 percentage points above the Bank of England base rate, accruing daily (simple interest, not compound) from the day after payment was due until the day you are paid. Formula: (invoice amount × rate) ÷ 365 × days overdue.
  2. Fixed compensation per late invoice: £40 for debts under £1,000, £70 for £1,000–£9,999.99, £100 for £10,000 or more.

The calculator above applies exactly this. The Bank of England base rate is pre-filled with the rate verified on 13 October 2026 (3.75%, held at the sixth consecutive MPC meeting) — if your invoice went late under a different rate, adjust the field.

When you can use it

  • Business-to-business only. The Act covers invoices to companies, sole traders, partnerships and agencies. It does not cover invoices to private individuals acting as consumers.
  • Your contract matters. If your contract already sets its own interest rate for late payment, that rate governs and statutory interest does not stack on top.
  • You do not need to have mentioned it before. The right exists whether or not your invoice or contract mentioned late payment. Gov.uk advises sending a new invoice if you add interest to what you are owed.

How to use the number

Most freelancers never actually charge the interest — they use the figure as leverage. A calm, factual line in a chasing email (“this is what the Act says I could claim”) resolves more invoices than threats do. The calculator’s Copy as a polite email line button gives you exactly that sentence, ready to paste.

For the full picture — when an invoice legally counts as late, the “substantial remedy” exception, and how to raise the subject without burning the relationship — read our plain-English guide to your UK late-payment rights.

This page explains publicly available information from gov.uk, the Bank of England and the legislation itself. It is not legal advice. For a disputed or high-value debt, speak to a solicitor.