Late payment fee calculator for UK invoices

You know you can charge a late-paying business customer but the maths is fiddly.

Interest accrues daily, you have to use the right base rate, and the compensation fee depends on the invoice size. This calculator helps you work through it.

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.

Bank of England Rate (%)

+ 8% = 11.75%

Check Bank of England rate

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

Invoice Amount (£)

£

Invoice Due Date

Today's Date (or date paid if applicable)

Add another invoice

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

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 on that 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 getting it onto an invoice. Xero has no late payment fee feature, so there’s no button that turns this figure into a charge. The recommended approach is to raise a separate invoice for the interest and compensation, set outside the scope of VAT. We explain how in how to add late payment fees to invoices in Xero.

Trove will be launching free functionality in early July for all Xero users to automatically generate accurate late payment fees in Xero. Join the waitlist to be notified when the late payment fee plan launches.