UK Late Payment Interest Rate 2026
The statutory interest rate on late commercial payments right now, how it is set, and what it adds to an overdue invoice per day.
What the late payment interest rate adds to an overdue invoice
Interest is simple, runs daily from the day after the due date, and sits on top of the fixed debt recovery cost the Act also allows. At 11.75% a year:
| Invoice | Per day | 30 days late | 90 days late | Fixed cost |
|---|---|---|---|---|
| £1,000.00 | £0.32 | £9.66 | £28.97 | £70.00 |
| £5,000.00 | £1.61 | £48.29 | £144.86 | £70.00 |
| £10,000.00 | £3.22 | £96.58 | £289.73 | £100.00 |
| £25,000.00 | £8.05 | £241.44 | £724.32 | £100.00 |
For your own figures, the late payment interest calculator works it out to the day, and the letter generator puts it in a demand letter.
How the statutory late payment rate is set
The Late Payment of Commercial Debts (Interest) Act 1998 sets interest at 8 percentage points over the Bank of England base rate. To stop the rate on a running debt changing every time the Bank moves, the Act uses a reference rate fixed twice a year:
- The base rate on 31 December applies to invoices that become overdue between 1 January and 30 June.
- The base rate on 30 June applies to invoices that become overdue between 1 July and 31 December.
So a base rate cut in March does not reduce the interest on an invoice that went overdue in February, and a rise in August does not increase it either. The rate is locked for each debt by the half-year in which it fell due.
Who can charge it
Any business, sole trader or freelancer whose customer is also a business or public body, in England, Wales, Scotland or Northern Ireland. It does not apply to invoices to consumers. There is no minimum invoice value and no need for a late payment clause in your terms: the right exists by default. See your rights when a client pays late.
Frequently asked questions
Every chase email states the interest and fixed cost owed on that day, at the right reference rate, and the total keeps growing until the client pays.
No credit card required
