Late Payment of Commercial Debts (Interest) Act 1998

UK late payment interest calculator (July–December 2026)

In the UK, a business paid late can claim statutory interest of 8% plus the Bank of England base rate, fixed for the whole debt. For invoices that became late in July–December 2026 that is 11.75% a year, plus a fixed £40, £70 or £100 depending on the amount.

Bank of England base rate + 8 percentage points. Late Payment of Commercial Debts (Interest) Act 1998.

You can add

£94.14
Days late
30
Interest
£24.14
11.75% a year · £0.80 a day
Fixed fee
£70.00

How it adds up

30 Aug 2026 – 28 Sept 202630 days at 11.75% a year
£24.14
Fixed compensation£40 for debts under £1,000, £70 up to £9,999.99, £100 for £10,000 or more
£70.00
Total you can add
£94.14

The base rate on 31 December or 30 June just before the invoice became late applies for the whole debt.

A line for your final reminder
Invoice #1042 is now 30 days overdue. Under the Late Payment of Commercial Debts (Interest) Act 1998, late-payment interest of £24.14 (11.75% a year) and a fixed recovery fee of £70.00 can now be added. I’m happy to waive this if the invoice is paid this week.

Business-to-business invoices only. A rate agreed in your contract replaces these. General information, not legal advice.

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United Kingdom

How it works in United Kingdom

One rate per debt

The base rate on 31 December or 30 June just before the invoice became late is locked in for that debt. Older debts keep their older (often higher) rate.

When it counts as late

On the agreed date. With no agreed date, 30 days after the customer gets the invoice or you deliver, whichever is later.

Fixed sums

£40 up to £999.99, £70 from £1,000 to £9,999.99, and £100 from £10,000, once per invoice. Reasonable recovery costs can be added on top.

Contracts win

If your contract sets its own late-payment rate, that applies instead of statutory interest.

Proposed, not yet law

What the UK Commercial Payments Bill would change

The government introduced the Commercial Payments Bill in May 2026. If passed, it would:

  • cap payment terms between businesses at 60 days, with strictly limited exceptions
  • make late-payment interest of 8% over base rate mandatory
  • give suppliers a fixed sum when a customer raises a dispute late or without enough information
  • let the Small Business Commissioner investigate larger businesses, settle disputes and issue fines

The government says there will be a lead-in time and a transition period, and the rules won’t apply to past contracts. Until it becomes law, the current Act (above) applies.

  1. 19 May 2026Introduced in the House of Lords
  2. 9 June 2026Second reading
  3. 21 July 2026Committee stage
  4. 15 September 2026Report stage (amended)
  5. 20 October 2026Third reading in the Lords (scheduled, may move)

Sources: GOV.UK bill overview · UK Parliament bill stages. Checked 27 September 2026.

Every half-year since 2023

United Kingdom late-payment interest rates

Bank of England base rate + 8 percentage points. The base rate on 31 December or 30 June just before the invoice became late applies for the whole debt.

United Kingdom: statutory late-payment interest by half-year
Debt became late inBank of England base rateYearly rate
July–December 20263.75%11.75%
January–June 20263.75%11.75%
July–December 20254.25%12.25%
January–June 20254.75%12.75%
July–December 20245.25%13.25%
January–June 20245.25%13.25%
July–December 20235.00%13.00%
January–June 20233.50%11.50%

Other countries

Before the first reminder

Good questions.

What is the statutory interest rate in the UK right now?
11.75% a year for debts that became late between 1 July and 31 December 2026 (Bank of England base rate of 3.75% on 30 June 2026, plus 8 points). The rate is fixed for each debt, so a debt that became late earlier may carry a different rate.
Do I have to warn the client before charging interest?
No notice is required by the Act, but saying it plainly in a final reminder is the fairest approach and often gets the invoice paid without charging it.
Can I charge interest to a private individual?
No. The Late Payment of Commercial Debts (Interest) Act 1998 covers business-to-business contracts (including public bodies), not consumers.
How do I actually add it?
Send a new invoice or a statement for the interest and fixed sum, or mention the amount in your final reminder. GOV.UK suggests sending a new invoice if you decide to add interest.

Consider the awkward part handled.

Let Babara mention it for you

Babara chases late invoices politely and can add one calm line about the interest the law allows to your final reminder.

Start chasing less

Your clients won’t know what hit them. (A very polite email.) Free for your first 3 invoices.