Calculate late payment

Calculate statutory interest and fixed recovery compensation for a qualifying overdue UK commercial invoice.

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ToolLate Payment Calculator
Input
Output
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How it works

The annual statutory rate adds 8 percentage points to the entered Bank of England base rate, then daily simple interest divides the annual charge by 365. Fixed compensation is £40 below £1,000, £70 from £1,000 through £9,999.99, and £100 from £10,000; neither charge is added at 0 overdue days.

Formula
daily interest = invoice amount × (base rate + 8%) ÷ 365
total owed = invoice amount + accrued interest + fixed compensation
  • The Bank of England rate is entered rather than frozen because monetary-policy decisions change it over time.
  • The calculation applies the statutory rule only; a contractually agreed alternative rate is not represented.

Worked example

5,000 invoice, 30 days overdue
Base rate of 5%, so statutory interest is 13%
Input
											Invoice amount: 5000
Days overdue: 30
Bank of england base rate percent: 5
Output
												Statutory interest rate percent: 13
Daily interest amount: 1.78
Interest accrued: 53.42
Compensation amount: 70
Total owed: 5123.42

When to use this

UK suppliers, accounts-receivable teams, and claimants preparing a specified money claim use the overdue date and current base rate to update a qualifying business debt.

Edge cases

  • At 0 overdue days, no interest or compensation is added because the invoice has not yet become late.
  • An invoice of exactly £1,000 enters the £70 compensation band; £999.99 remains in the £40 band.
  • A contract that already specifies a different interest rate is outside this calculation; the output always applies the statutory base-rate-plus-8 formula.

References