Late Payment of Commercial Debts (Interest) Act 1998
The statutory interest rate, for every period the Act defines
A debt falling due today
11.75% a year
Bank of England base rate 3.75%, as it stood on 30 June 2026, plus the 8% the Act adds. It does not move when base rate moves.
The rate is fixed by when the invoice fell due
This is the part most published figures get wrong, often on the day they are written. The Act does not use today's base rate. It fixes a reference rate for each six-month period:
- Fell due 1 January to 30 June: the base rate in force on the previous 31 December
- Fell due 1 July to 31 December: the base rate in force on that 30 June
Once set, that rate applies for the life of the debt. A March 2025 invoice is still charged at the 31 December 2024 rate today, however many times the Monetary Policy Committee has moved since.
Every reference period
| Invoice fell due | Base rate | Statutory rate | Read on |
|---|---|---|---|
| 1 Jul 2026 – 31 Dec 2026 | 3.75% | 11.75% | 2026-06-30 |
| 1 Jan 2026 – 30 Jun 2026 | 3.75% | 11.75% | 2025-12-31 |
| 1 Jul 2025 – 31 Dec 2025 | 4.25% | 12.25% | 2025-06-30 · unchecked |
| 1 Jan 2025 – 30 Jun 2025 | 4.75% | 12.75% | 2024-12-31 · unchecked |
| 1 Jul 2024 – 31 Dec 2024 | 5.25% | 13.25% | 2024-06-30 · unchecked |
| 1 Jan 2024 – 30 Jun 2024 | 5.25% | 13.25% | 2023-12-31 · unchecked |
| 1 Jul 2023 – 31 Dec 2023 | 5% | 13% | 2023-06-30 · unchecked |
| 1 Jan 2023 – 30 Jun 2023 | 3.50% | 11.50% | 2022-12-31 · unchecked |
| 1 Jul 2022 – 31 Dec 2022 | 1.25% | 9.25% | 2022-06-30 · unchecked |
| 1 Jan 2022 – 30 Jun 2022 | 0.25% | 8.25% | 2021-12-31 · unchecked |
8 of 10 rows have not yet been checked against the Bank of England's published Bank Rate series. They are shown because a table with holes in it is more useful than no table, and marked because a figure a solicitor might rely on has to say how confident it is. The source is the Bank of England Bank Rate history .
Compensation, on top
Section 5A adds a fixed sum to every late invoice, separately from the interest. It is per invoice rather than per debtor, so a customer sitting on five late invoices owes it five times.
| Invoice | Compensation |
|---|---|
| Under £1,000 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
Questions
- What is the statutory interest rate on a late commercial invoice?
- For a debt that fell due today, 11.75% a year: the Bank of England base rate of 3.75% plus the 8% the Act adds. The rate is fixed by the date the invoice fell due, not by today's base rate.
- Does the rate change when the Bank of England changes base rate?
- Not for a debt already overdue. The Act fixes a reference rate for each six-month period: a debt falling due between 1 January and 30 June uses the base rate in force on the previous 31 December, and one falling due between 1 July and 31 December uses the rate on that 30 June. Once set, that rate applies for the life of the debt.
- Can I claim compensation as well as interest?
- Yes. Section 5A adds a fixed sum per late invoice: £40 for debts under £1,000, £70 up to £9,999.99, and £100 for £10,000 or more. It is per invoice, not per debtor, and it is on top of the interest.
- Does this apply to a private customer?
- No. The Act covers commercial debts between businesses. A debt owed by a consumer is outside it entirely, and interest on those is a matter of the contract instead.
Work out a real invoice
The calculator applies this to an actual amount and date, including the compensation, and takes the figures in the link so a calculation can be sent to somebody. It is the same arithmetic Hound uses to write a letter, not a separate implementation that can drift from it. If the invoice is already late and you want the steps rather than the number, start with they will not pay.