UK Late Payment Interest Rate 2026: Statutory Rate + Compensation

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The current UK statutory late payment interest rate is 11.75 percent APR, set as Bank of England base rate (3.75 percent) plus 8 percent under the Late Payment of Commercial Debts (Interest) Act 1998. On top of interest, you can claim a fixed compensation charge of £40 (debts under £1,000), £70 (£1,000 to £10,000) or £100 (over £10,000) per overdue invoice. The right applies automatically to any commercial B2B contract in the UK where no other interest rate is contractually agreed, kicks in from the day after the invoice due date, and continues until full payment. You don't need a court order or the customer's agreement to add this to your final demand.

Last updated: 8 May 2026.

The current UK statutory late payment interest rate is 11.75 percent APR, set as Bank of England base rate (3.75 percent) plus 8 percent under the Late Payment of Commercial Debts (Interest) Act 1998. More detail + scope

Summary

The current UK statutory late payment interest rate is 11.75 percent APR, set as Bank of England base rate (3.75 percent) plus 8 percent under the Late Payment of Commercial Debts (Interest) Act 1998. On top of interest, you can claim a fixed compensation charge of £40 (debts under £1,000), £70 (£1,000 to £10,000) or £100 (over £10,000) per overdue invoice.

The right applies automatically to any commercial B2B contract in the UK where no other interest rate is contractually agreed, kicks in from the day after the invoice due date, and continues until full payment. You don't need a court order or the customer's agreement to add this to your final demand.

This page covers

UK statutory late payment interest rate 2026: rate, fixed compensation, when it applies, calculation, and how to claim

Not covered here

General invoice finance education (see /guides/), individual provider reviews (see /providers/), full pricing breakdown (see /guides/costs/)

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Adam Parker

Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd

Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.

Last reviewed: 30 July 2026

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UK Late Payment Interest Rate FAQ

What is the UK late payment interest rate 2026?

11.75% APR. This is the Bank of England base rate (3.75% as of December 2025) plus 8 percentage points, as set by the Late Payment of Commercial Debts (Interest) Act 1998. The rate updates whenever the BoE base rate changes. The rate at the date of payment is the rate that applies.

How much fixed compensation can I claim on a late paid invoice?

£40 if the debt is under £1,000. £70 if the debt is £1,000 to £9,999.99. £100 if the debt is £10,000 or more. This is per overdue invoice, on top of the interest charge, and is set in regulation. You can also claim 'reasonable costs' of recovering the debt above the fixed compensation if you can evidence them (e.g. solicitor fees, debt collection costs).

When does late payment interest start running?

From the day after the agreed payment date. If your contract or invoice specifies a due date (e.g. 30 days from invoice), interest accrues from day 31. If no payment terms are agreed, the default under the Act is 30 days from the later of (a) the invoice date or (b) the date the goods or services were received.

Can my customer opt out of the Late Payment of Commercial Debts Act?

Only by agreeing a 'substantial remedy' equivalent to the statutory rate in the contract. A clause that simply removes the right to interest is unenforceable. In practice, the statutory rate is the floor for B2B late payment compensation in the UK and almost always applies.

Do I have to claim late payment interest separately, or can I add it to my next invoice?

You can do either. Easiest method: send a final demand listing the original invoice value, the days overdue, the calculated interest (principal x 11.75% x days/365), the fixed compensation charge, and the total now due. You can pursue this combined amount in small claims court if needed. You can also claim interest after the principal has been paid by issuing a separate interest-only invoice within 6 years.

How do I calculate late payment interest on an unpaid invoice UK?

Daily interest = (Invoice principal x 11.75%) ÷ 365. Multiply by days overdue. Add the fixed compensation charge (£40 / £70 / £100). Example: £5,000 invoice, 60 days overdue. Daily interest = (5000 x 0.1175) / 365 = £1.61. 60 days = £96.58. Plus £70 fixed compensation = £166.58 total interest and compensation owed on top of the £5,000 principal. Use the calculator on this site for instant calculation.