UK late payment interest: 8% plus the base rate, and GBP 40 to 100
If a business client in the UK pays late, you can charge statutory interest of 8% plus the Bank of England base rate, and a fixed sum of GBP 40, 70 or 100. For a debt that became late between 1 July 2026 and 31 December 2026, the rate is 11,75% per year.
What the law gives you
The Late Payment of Commercial Debts (Interest) Act 1998 covers business-to-business invoices. It gives you two things on every late invoice:
- Statutory interest of 8% plus the Bank of England base rate, per year, simple interest.
- A fixed sum for the cost of recovering the debt, based on the invoice amount.
| Debt amount | Fixed sum per invoice |
|---|---|
| Up to GBP 999,99 | GBP 40 |
| GBP 1.000 to 9.999,99 | GBP 70 |
| GBP 10.000 or more | GBP 100 |
Which base rate applies
The reference date is fixed: the base rate on 30 June applies to debts that become late from 1 July to 31 December, and the base rate on 31 December applies to debts that become late from 1 January to 30 June. Overdue Kit uses the base rate on the last reference date before the debt became late.
| Base rate on | Base rate | Statutory rate (+ 8%) |
|---|---|---|
| 30 June 2024 | 5,25% | 13,25% |
| 31 December 2024 | 4,75% | 12,75% |
| 30 June 2025 | 4,25% | 12,25% |
| 31 December 2025 | 3,75% | 11,75% |
| 30 June 2026 | 3,75% | 11,75% |
The latest base rate stored is 3,75% (8 October 2026), from the Bank of England.
Example
An invoice of GBP 2.400,00 became late between 1 July 2026 and 31 December 2026. After 30 days the interest is GBP 2.400,00 x 11,75% / 365 x 30 = GBP 23,18, and it grows by GBP 0,77 per day. The fixed sum is GBP 70, so the claim is GBP 2.493,18.
Questions
What is the statutory interest rate on late commercial payments in the UK?
8% plus the Bank of England base rate. The base rate used is the one on 30 June or 31 December before the debt became late. For a debt that became late between 1 July 2026 and 31 December 2026 that is 3,75% + 8% = 11,75% per year.
How much fixed compensation can I add?
GBP 40 for a debt up to GBP 999,99, GBP 70 up to GBP 9.999,99 and GBP 100 from GBP 10.000, per invoice.
Can my contract set a different rate?
Yes. Statutory interest applies unless your contract sets a different late payment rate. If it does, use that rate.
Rates and sources as stored on 11 October 2026. Business-to-business debts only. Templates and calculations, not legal advice.