Money · Guide · 3 min read

Late payment interest calculator for UK business invoices

Estimate statutory interest and fixed compensation for an eligible business debt. Enter the relevant reference rate and calculation date.

By Trade PA · Published 3 October 2026 · Reviewed 15 September 2026

Start by identifying the customer and the agreement. This calculator is for a simple, wholly unpaid business invoice where statutory commercial-debt interest applies. It does not decide a dispute, apply contractual interest, calculate instalments or cover consumer debts.

What the result includes

For an eligible commercial debt, the statutory annual rate is eight percentage points above the relevant Bank of England reference rate. Fixed compensation is £40 below £1,000, £70 from £1,000 to below £10,000 and £100 at £10,000 or more. Contract terms can affect entitlement, so check them first. GOV.UK explains interest and recovery costs.

A transparent worked example

Illustration: a wholly unpaid £1,200 invoice, an assumed reference rate of 4% and 30 days late. The annual rate is 12%; £1,200 × 0.12 ÷ 365 × 30 gives £11.84 interest, rounded at the end. Fixed compensation is £70, giving £1,281.84 including the original invoice. The assumed 4% is an example, not a statement of today’s rate.

The tool counts calendar dates using the due date and your selected end date, so daylight-saving clock changes do not add or remove a day. It uses simple interest and a 365-day divisor. If there have been part-payments, calculate the periods and outstanding balances separately with an adviser; entering only today’s balance can misstate the earlier interest.

Check these before adding a charge

• Is the invoice payable by a business, rather than a householder?
• Was the payment deadline agreed, and has it passed?
• Does the contract specify a different remedy?
• Is the amount still wholly unpaid, without credits or disputed variations?
• Have you selected the reference rate applicable when the debt became late?

A consumer debt may have separate contractual or court-interest rules. Do not use this business calculator to decide those rights. For disputed work, address the dispute rather than treating a calculated total as proof that it is owed.

Use the number in a factual follow-up

Review the calculation and entitlement before using that wording. Our invoice-chasing guide provides a staged approach. To reduce repeat problems, agree payment terms before the job and record promised payment dates.

Trade PA supports customer-specific chasing settings. Review and enable them for the customers you choose; the app does not decide whether a statutory charge is legally due. General information, not advice on a particular debt.