Summary
- Use the website calculator below to get a quick answer on how much your late payment fee should be.
- Use Treasure, Trove’s free plan to calculate and raise late fee invoices directly in your Xero account.
UK Statutory Interest Calculator
Calculate your late payment fee under the Late Payment of Commercial Debts (Interest) Act 1998. This applies to any UK business-to-business invoice.
Note: The base rate applied will depend on your invoice due date. 3.75% will apply to all invoices due 1 Jan - 30 Jun 2026. See our guide to late payment charges for the rate that applies to your invoice.
Invoice 1
Calculation Details:
- Interest rate: 8% + Bank of England base rate
- Compensation fee: £40 (<£1,000), £70 (£1,000-£9,999), £100 (£10,000+)
- Interest is calculated on a daily basis
Raise your late fee invoice directly in Xero
Treasure by Trove calculates the late fee and then and raises it as a proper no-VAT invoice in your Xero account. For free.
How the calculation works
Statutory interest is 8% above the Bank of England base rate, charged daily on the overdue amount as simple interest.
The base rate used is the one fixed for the relevant six-month period, not necessarily today’s rate (more in our guide to whether late payment charges are legal in the UK).
On top of the interest you can add a fixed compensation fee of £40, £70 or £100 depending on the invoice size.
Generate a late fee invoice in Xero automatically
The calculator tells you what you’re owed. The next step is raising an invoice for it. Xero has no late payment fee feature but we explain the manual workaround for adding late payment fees in Xero here.
If you don’t fancy a manual workaround, Treasure (by Trove) does this for free: choose your late fee policy, connect your Xero account and it will raise the invoice for you, with the figure kept accurate up to the day you send it.
If you’re look to automatically apply late fees at the right time across a full ledger, all of Trove’s paid plans come with a free 30-day trial or you can book a demo.
