Late payment interest calculator UK

They are late. You are owed interest. Here is exactly how much.

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Late payment interest calculator

What is statutory late payment interest?

Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge interest on overdue invoices at 8% above the Bank of England base rate. As of 2026, with a base rate of 4.5%, the statutory interest rate is 12.5% per annum. This applies automatically to all business-to-business transactions in the UK — you do not need to include it in your terms (though it helps to remind customers).

How do I calculate late payment interest?

Interest = invoice amount × (base rate + 8%) ÷ 365 × days overdue. For example, a £1,000 invoice that is 30 days overdue at 12.5% annual rate: £1,000 × 0.125 ÷ 365 × 30 = £10.27 in interest. The interest accrues daily from the day after the agreed payment date.

What about fixed compensation?

In addition to interest, you can claim a fixed compensation amount: £40 for debts up to £999.99, £70 for debts between £1,000 and £9,999.99, and £100 for debts of £10,000 or more. This is a one-off payment per invoice, not per day. You can claim this even if you do not charge the interest.

Does GraftG chase late payments automatically?

GraftG Pro (£24/month) sends automatic email reminders in your name: friendly at 1 day overdue, polite at 7, firm at 14, and a final notice at 21 days citing the Act and the interest amount. Reply OUTSTANDING on WhatsApp to see exactly who owes you what. The chasing stops the moment the invoice is marked paid.

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