Calculates statutory interest and compensation for late commercial payments in the UK, for both B2B and consumer debts.
Result
The principal debt plus all statutory interest and compensation.
Fill in the details to see the result.
Indicative result, calculated from the details and the rules listed below. It does not replace an official calculation or advice from a professional.
With the result already worked out, you can fill in the document right away.
The editor opens with the calculator details already entered.
If you are owed money for goods or services in the United Kingdom, you are often entitled to charge interest and claim compensation if the payment is late. The rules differ depending on whether the debt is between businesses (B2B) or is owed by a consumer. This calculator helps you determine exactly how much you are owed under UK law.
For business-to-business (B2B) debts, the law provides a statutory right to interest under the Late Payment of Commercial Debts (Interest) Act 1998. The interest rate is the Bank of England's official base rate (in force on 31 December or 30 June) plus 8%. This interest is calculated as simple interest on the principal amount for each day the payment is late. The base rate can change every six months; our calculator asks you to input the correct rate for your period. If your late payment spans two different six-month periods with different base rates, you may need to perform two separate calculations and add the results.
For consumer debts, there is no automatic statutory right to interest before a court judgment. However, if you obtain a county court judgment (CCJ), the court will typically award interest at a rate of 8% per annum simple interest from the date the debt became due. This calculator uses this standard 8% rate for consumer debts to provide an estimate of what a court might award.
In addition to interest, for B2B debts you can claim a fixed sum as compensation for the cost of recovering the late payment. The amount depends on the size of the debt:
This compensation is payable once per invoice, provided the debt remains unpaid 30 days after the due date or the date you receive the invoice, whichever is later. Our calculator assumes this condition is met if the payment is overdue.
Imagine a business is owed £5,000 for an invoice due on 1 May 2026. By 20 October 2026, the payment is 172 days late. Assuming a Bank of England base rate of 3.5% (a realistic estimate for 2026), the statutory rate is 11.5% (3.5% + 8%).
First, we determine the number of days in the year for the daily rate. 2026 is not a leap year, so there are 365 days.
This total is the amount you can formally demand from the debtor.
Small Business Invoice: A £500 invoice overdue for 49 days with a 3.5% base rate would accrue approximately £2.31 in interest and qualify for £40 in fixed compensation, making the total demand £542.31.
Consumer Debt: A personal debt of £1,500 overdue for 278 days (in a non-leap year) would accrue interest at 8% per annum, amounting to approximately £91.40. No fixed compensation applies, so the total is £1,591.40.
Large Commercial Debt: A £15,000 invoice overdue for a full year (365 days) with a 3.5% base rate would accrue approximately £1,155 in interest and the maximum £100 compensation, resulting in a total of £16,255.
Once you know the total amount owed, the next step is to formally request payment. For B2B debts, you should send a detailed letter outlining the principal, the calculated statutory interest, and the fixed compensation. This serves as a formal demand and is often a required step before legal action under the Pre-Action Protocol for Debt Claims.
Our Letter Demanding Late Payment of Debt is tailored for this purpose. It allows you to clearly state the breakdown of the total amount and sets a final deadline for payment. If the debt remains unpaid, you may need to escalate to a Letter before Claim or consider court proceedings using a Letter Before Small Claim.
For B2B transactions, yes. The statutory right to interest and compensation under the Late Payment of Commercial Debts (Interest) Act 1998 applies automatically unless you have expressly agreed different terms that are 'substantial' and not grossly unfair. For consumer debts, you generally cannot charge interest unless it was agreed in the contract or awarded by a court.
Interest runs from the day after the payment was contractually due. If no due date was agreed, the law implies a due date of 30 days after you delivered the invoice or the customer received the goods/services (whichever is later) for B2B debts.
The rate changes. For statutory interest, the relevant rate is the one in force on either 31 December or 30 June, which then applies for the next six-month period. You should check the Bank of England's website for the most recent official rate. Our calculator asks you to input this rate to ensure accuracy.
No. The fixed compensation of £40, £70, or £100 only applies to business-to-business (B2B) commercial debts. Consumer debts are not covered by the Late Payment Regulations.
No. The statutory interest for both B2B and consumer debts (when awarded by a court) is simple interest. It is calculated only on the original principal amount, not on any accrued interest.
Partial payments are first applied to settle any interest and compensation owed, and then to reduce the principal. You should continue to calculate interest on the remaining principal balance from the due date until it is fully paid.
