How statutory interest is calculated
Daily interest = invoice amount × (8% + reference rate) ÷ 365
Example: a £5,000 invoice due 31 July 2026, paid 30 August 2026 (30 days late): £5,000 × 11.75% ÷ 365 = £1.61 a day → £48.29 interest plus £70 compensation.
Reference rates
| Debt becomes late from | Bank Rate on | Reference | Statutory rate |
|---|---|---|---|
| 1 Jul 2026 | 30 Jun 2026 | 3.75% | 11.75% |
| 1 Jan 2026 | 31 Dec 2025 | 3.75% | 11.75% |
| 1 Jul 2025 | 30 Jun 2025 | 4.25% | 12.25% |
| 1 Jan 2025 | 31 Dec 2024 | 4.75% | 12.75% |
| 1 Jul 2024 | 30 Jun 2024 | 5.25% | 13.25% |
| 1 Jan 2024 | 31 Dec 2023 | 5.25% | 13.25% |
How to claim it
Send the customer a written reminder stating the overdue amount, the statutory interest per day and the fixed compensation. Most invoices are paid at this point. If not, the claim can be included in a county court claim. Invoicing customers in the euro area? Add an EPC payment QR code to make paying easy.
FAQ
What is the statutory late payment interest rate?
8% a year plus the Bank of England reference rate. For debts that became late between 1 July and 31 December 2026 the reference rate is 3.75% (Bank Rate on 30 June 2026), so statutory interest is 11.75% a year.
Who can claim statutory interest?
Any business or public sector body supplying goods or services to another business or public body under a commercial contract, unless the contract sets a different, substantial remedy for late payment. It does not apply to sales to consumers.
When does interest start?
From the day after the agreed payment date. If no date was agreed, 30 days after the customer received the invoice or the goods/services, whichever is later.
What is fixed-sum compensation?
On top of interest you can claim a fixed amount per invoice: £40 for debts under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more. You can also claim reasonable extra recovery costs if they were higher.
Does the rate change while the debt is outstanding?
No. The reference rate is fixed for the whole debt: Bank Rate on 31 December for debts that become late in the first half of the year, and on 30 June for the second half.
Legal basis and sources
- GOV.UK: Late commercial payments – charging interest and debt recovery
- Late Payment of Commercial Debts (Interest) Act 1998
- Bank of England: Bank Rate history
For information only. Your contract or specific circumstances may change the result.