Work out what a UK business can legally claim on an overdue commercial invoice — interest plus fixed compensation, under the Late Payment of Commercial Debts Act 1998.
If another UK business is late paying an invoice for goods or services, the Late Payment of Commercial Debts (Interest) Act 1998 gives you an automatic right to charge interest — even if your contract or invoice says nothing about it. This applies to business-to-business debts, and debts owed by public authorities.
The base rate used is fixed for six-month blocks, not today's rate: debts falling due between 1 January and 30 June use the rate as it stood on the previous 31 December; debts falling due between 1 July and 31 December use the rate as it stood on the previous 30 June. If your invoice has been overdue across a rate change, this calculator uses the single rate you enter — for a precise split across periods, check the rate that applied when your debt first became due.
No. This right is for B2B debts and debts owed by public authorities. Late payment by a consumer is covered separately, under the County Courts Act 1984, with courts more likely to reduce rates seen as excessive.
A contract term can replace the statutory rate only if it provides a "substantial remedy" for late payment. Many standard construction contracts (e.g. JCT) set a lower agreed rate, such as 5% over base — check your contract before assuming the statutory rate applies.
For B2B contracts, the maximum is generally 60 days unless both parties agree otherwise and it isn't grossly unfair. For contracts with public authorities, it's usually 30 days from invoice receipt.
Interest = debt amount × (base rate + 8%) ÷ 365 × number of days overdue, as simple interest. This calculator adds the fixed compensation band automatically based on your debt size, so the total shown is interest plus compensation combined.
If the overdue amount is retention money rather than an invoice, the same statutory interest principle can apply — see the Retention Calculator to work out what's actually owed and when. And if you're a subcontractor chasing a contractor's payment, the CIS Deduction Calculator confirms the correct labour deduction on the same invoice.