Statutory interest on late payment in the UK: how much can you claim in 2026?

Who can claim it

The Late Payment of Commercial Debts (Interest) Act 1998 gives a business a right to statutory interest when another business pays late for goods or services ^[2]. It does not apply to sales to private customers.

If your contract already sets its own rate of interest for late payment, that contractual rate generally applies instead ^[1].

The rate for 2026: 11.75%

Statutory interest is 8% above the Bank of England reference rate ^[1]. The reference rate is fixed for six months at a time: the rate in force on 31 December applies to debts that become overdue between January and June, and the rate on 30 June applies from July to December ^[2].

The Bank of England cut Bank Rate to 3.75% in December 2025 and has held it there since, most recently on 17 September 2026 ^[3]. Both reference dates therefore give 3.75%, and the statutory rate for debts falling overdue in 2026 is 11.75%.

How to calculate it

GOV.UK sets out a simple method: work out the yearly interest on the amount owed, divide it by 365 to get the daily figure, and multiply by the number of days the payment is late ^[1].

Example: an £8,000 invoice paid 45 days late. £8,000 × 11.75% = £940 a year, or about £2.58 a day. Over 45 days that is about £115.89 of interest. The Small Business Commissioner offers a free calculator that does the same sum ^[5].

Fixed compensation and recovery costs

• £40 for a debt up to £999.99.
• £70 for a debt from £1,000 to £9,999.99.
• £100 for a debt of £10,000 or more.

These fixed sums apply per invoice ^[4]. You can also claim reasonable debt recovery costs above the fixed sum where they were actually incurred ^[4]. In the example above, the total claim would be about £115.89 of interest plus £70 of compensation — £185.89.

Claiming it without damaging the relationship

You do not have to claim interest to benefit from it. Simply stating in a reminder how much has built up so far, and how much more is added each week, frames the delay as a cost rather than a favour — without adding anything to the invoice.

Nemexio does this automatically in business-to-business reminders, stated as information only, and never adds interest or fees to amounts owed by private customers.

What is changing

Following its March 2026 response to the late payment consultation, the government intends to make the statutory rate mandatory: contracts would no longer be able to set a lower rate or exclude statutory interest ^[6]. These changes are not yet in force.