11.75% per year — Bank of England base rate (3.75% as of 30 June 2026) plus 8 percentage points, fixed for each six-month period. On a £5,000 invoice 60 days overdue, the money already owed to you looks like this:
Total owed on a £5,000 invoice · 60 days late
£5,166.58
Growing £1.61 every day it stays unpaid
Rate verified 2026-07-06 · Source: GOV.UK — Late commercial payments · Methodology
Rate prefilled from the UK default (11.75% per year) — override it if your contract sets its own.
60 days overdue
UK default: 11.75% per year
Total now owed to you · UK
£5,166.58
£5,000 principal · 60 days overdue at 11.75%
Simple interest: amount × (11.75% ÷ 365) × 60 days + fixed compensation fee. Information, not legal advice — contract terms can override statutory defaults.
If a UK business pays your invoice late, you have a statutory right to interest at 8 percentage points above the Bank of England base rate — no contract clause needed. The base rate on 31 December sets the statutory rate for January–June, and the rate on 30 June sets it for July–December.
You are also entitled to a fixed compensation fee per late invoice (£40, £70, or £100 depending on the debt size), intended to cover recovery costs. You can claim it in addition to the interest.
The right applies to business-to-business contracts for goods and services. If your contract specifies its own interest rate, that rate applies instead — but only if it is a "substantial remedy"; a token rate can be struck down and replaced by the statutory one.
Interest runs from the day after the due date. If no date was agreed, the default is 30 days after the invoice or delivery, whichever is later.
| Debt size | Fixed compensation |
|---|---|
| debt up to £999.99 | £40 |
| debt £1,000 to £9,999.99 | £70 |
| debt £10,000 or more | £100 |
Legal basis: Late Payment of Commercial Debts (Interest) Act 1998.
invoice = £5,000, 60 days overdue, rate = 11.75%
daily interest = £5,000 × (11.75% ÷ 365) = £1.61
interest = £1.61 × 60 days = £96.58
fixed compensation = £70
total owed = £5,166.58
A short, factual letter recovers more invoices than a heated one. Checklist (general guidance, not legal advice):
This page is general information about United Kingdom, verified 2026-07-06 against GOV.UK — Late commercial payments. It is not legal advice, and statutory rules have exceptions and transition rules that a short summary cannot capture. Contract terms often override statutory defaults. For significant or disputed sums, consult a qualified professional in your jurisdiction.