How much can you charge on a late commercial payment?
When another business pays you late, you are usually entitled to interest and a fixed compensation sum on top of the debt. This late payment calculator works out what you can add under the late payment legislation, based on the invoice and how overdue it is. It is a guide to your entitlement, not a demand drafted for you.
How it works
Enter the invoice amount, the date payment was due, and the date you are calculating to. The calculator applies the statutory rate of interest for late commercial payments and adds the fixed compensation sum the legislation allows for each overdue invoice.
The right to claim this comes from the Late Payment of Commercial Debts (Interest) Act 1998. It applies to business-to-business debts, sets interest at a fixed margin above the Bank of England base rate, and entitles you to a fixed sum per invoice as well — rising with the size of the debt.
These figures can be claimed even if your contract is silent on late payment, and they often prompt payment once a debtor sees them set out. Where a contract sets its own substantial remedy for late payment, that can apply instead.
The result is an indication of what you are entitled to add, not legal advice on recovering the debt. If an invoice is significantly overdue or being disputed, it is worth talking through how best to recover it.
Questions about How much can you charge on a late commercial payment?
Yes. Under the Late Payment of Commercial Debts (Interest) Act 1998, a business is normally entitled to charge statutory interest on an overdue business-to-business invoice, plus a fixed compensation sum, even where the contract does not mention late payment.
Yes. The statutory right applies automatically to qualifying commercial debts, so you do not need a clause in your contract. If your contract sets its own substantial remedy for late payment, that may apply instead.
It often does. Setting out the interest and compensation a debtor is liable for can prompt payment, and it strengthens a formal demand. If that does not work, the figures form part of what you can recover through a claim.
No. The statutory late payment regime applies to business-to-business debts, not to consumers. Different rules apply where the debtor is an individual buying as a consumer rather than in the course of business.
No. It works out the interest and compensation you may be entitled to add, based on what you enter. Whether and how to recover a particular debt depends on the circumstances and needs proper advice.
Yes. Anything you share is treated in confidence, and nothing you enter into the calculator is stored unless you submit the callback form.
On top of interest, the legislation entitles you to a fixed sum per overdue invoice, set in three bands according to the size of the debt. The larger the unpaid invoice, the larger the fixed sum. The calculator selects the correct band for you.
The statutory rate for late commercial payments is 8% above the Bank of England base rate. The calculator applies the current base rate automatically so the figure reflects the rate in force.
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