Late payment interest calculator

The rate that applied when your debt fell overdue, not today’s. Statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 is 8% plus the Bank of England base rate. The base rate used is the one in force on the reference date before the debt became late: 31 December for a debt that becomes late between 1 January and 30 June, and 30 June for one that becomes late between 1 July and 31 December. That rate then stays fixed for the debt. The calculator looks up the correct historic rate from your invoice dates and accrues daily from the day after payment was due, so an old invoice is not overstated at a newer rate.

A fixed compensation sum on top of the interest: £40 for invoices under £1,000, £70 for £1,000 to £9,999, and £100 for £10,000 or more.

Yes. Once you have entered the invoice, it produces a complete letter before action with the figures already filled in - the principal, the statutory interest to date, the fixed compensation and the total now due - together with a payment deadline and a clear statement of what happens next. A company gets 14 days to pay. If the debtor is a sole trader, the Pre-Action Protocol for Debt Claims applies in England and Wales, so the letter becomes a letter of claim that gives them 30 days, and you send it with the Protocol’s Information Sheet and Reply Form and a Financial Statement form. Enter your email and it downloads as a PDF straight away, with a copy sent to your inbox. Send it as it stands, or copy the wording onto your own letterhead.