Late payment interest calculator
An overdue invoice from a business client earns interest by law. See what a late payer owes you today.
Client type
As in HelloNoa contracts: interest starts once payment is more than 10 days late, capped at 8% above the base rate. If your contract says otherwise, follow it.
No date agreed? The law makes payment late 30 days after the invoice or the work, whichever is later. Interest can be claimed for up to six years after the payment date (five in Scotland).
The law fixes the rate once per invoice: the Bank Rate on the 30 June or 31 December before interest starts, plus 8%. For interest starting 1 July to 31 December 2026 that's 3.75%, so 11.75% a year, whatever the Bank does next. Change the payment date and the rate follows. Consumer contracts use today's rate instead.
Interest adds £0.48 a day while it stays unpaid.
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Estimated total owed todayHelloNoa
£1,584.49
30 days overdue at 11.75% a year
Interest: £14.49
Fixed compensation: £70.00
Statutory interest: 8% + 3.75% (the Bank Rate on 30 June 2026) on £1,500.00 for 30 days (simple, daily), plus fixed compensation for the debt band. If your reasonable recovery costs come to more than the fixed sum, you can claim the difference.
2026-06-30No interest term in your contract? Then you can't add interest. The invoice is still owed in full. Your next consumer contract can carry a fair rate; the free toolkit has one.
HelloNoa invoices carry this interest wording, and remind late payers for you, politely and on schedule.
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How this is worked out
Statutory interest for a late commercial debt is 8% above the Bank of England base rate, plus fixed compensation of £40, £70 or £100 depending on the size of the debt, under the Late Payment of Commercial Debts (Interest) Act 1998. The rate is fixed per invoice from the Bank Rate on the 30 June or 31 December before interest starts. If your contract sets its own late payment rate and it counts as a substantial remedy, that rate replaces the statutory one and this calculator doesn't apply. Not sure it counts? Ask a solicitor.
Sources
- GOV.UK: late commercial payments, interest and debt recovery costs
- Late Payment of Commercial Debts (Interest) Act 1998
- Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, article 4
- Bank of England: Bank Rate history
Rules last checked 30 October 2026. Rates and thresholds change; this is general information, not legal, tax or financial advice.
Sample: what a HelloNoa reminder says
Hello Sam,
This is a reminder about invoice INV-2026-004.
Amount due: £1,500.00. Due date: 30 Sep 2026.
View invoice: a link to the invoice, where they can pay by card.
This is what your client gets, from your name. You can edit it, and automatic reminders stay off until you switch them on.
This calculator gives an indicative figure, not legal advice. For the full picture read late payments: your rights in the UK.
Interest so far
Invoice amount£1,500.00
Yearly rate× 11.75%
Days overdue× 30 / 365
Interest£14.49
What the client owes
Invoice amount£1,500.00
Interest+ £14.49
Fixed compensation+ £70.00
Total£1,584.49
FAQs
Honest answers.
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How much interest can I charge on a late invoice in the UK?
For business clients, the Late Payment of Commercial Debts (Interest) Act 1998 gives you statutory interest at 8% above the Bank of England base rate, plus fixed compensation of £40, £70 or £100 per invoice depending on the debt size and, where your reasonable recovery costs come to more than that fixed sum, the difference. A sole trader client counts as a business; a private individual buying for themselves doesn't. For consumer clients the Act doesn't apply, so you can only charge the interest your contract sets out, at a fair rate. A term that works as a penalty can be challenged.
When does late payment interest start running?
Statutory interest runs from the day after the payment date you agreed with your client. If you didn't agree one, the law treats payment as late 30 days after your client receives the invoice or you deliver the work, whichever is later. The rate is fixed from the Bank Rate on the 30 June or 31 December before interest starts. Interest is simple, calculated daily, not compounded.
Do I need a clause in my contract to charge statutory interest?
No. Against business clients the statutory right exists even without a contract clause. But if your contract sets its own interest rate, that rate applies instead of the statutory 8%, provided it is a substantial remedy. Against consumers you do need a contract term, which is why HelloNoa's consumer contracts include one.
What is the fixed compensation for late payment?
Per overdue invoice from a business client: £40 for debts under £1,000, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more. This is on top of the interest.
Is UK late payment law changing?
A Bill is going through Parliament, but it isn't law yet. The Commercial Payments Bill would cap most business-to-business payment terms at 60 days (30 for public bodies), make statutory interest compulsory, and stop contracts swapping it for a different rate or remedy. It passed the Lords in October 2026 and now needs the Commons and Royal Assent; the government says the cap won't start before 2027. Until then the 1998 Act applies, so this calculator uses 8% above the Bank Rate plus the fixed compensation.
More questions? See all FAQs or email us.
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