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Calculate the statutory interest you are owed on an overdue invoice under the Late Payment of Commercial Debts (Interest) Act 1998.
Statutory interest = base rate + 8 percentage points. Adjust if the current rate has changed.
Yes. Under the Late Payment of Commercial Debts (Interest) Act 1998, UK businesses have a statutory right to charge interest on overdue commercial invoices. The rate is the Bank of England base rate plus 8 percentage points.
The statutory late payment interest rate is the Bank of England base rate plus 8 percentage points. The total rate changes when the BoE base rate changes. As of early 2025, with a base rate of around 5.25%, the statutory rate is approximately 13.25%.
Yes. In addition to statutory interest, UK businesses can claim a fixed compensation amount per invoice: £40 for invoices under £1,000; £70 for invoices between £1,000 and £9,999; £100 for invoices of £10,000 or more. This compensation covers debt recovery costs.
You have a statutory right to charge interest without needing a contract clause — the right is implied by law. However, including your payment terms clearly on every invoice (e.g. 'Payment due within 30 days. Late payment subject to statutory interest.') strengthens your position and sets expectations.