Late Payment Interest Calculator
Estimate simple statutory or contractual interest on an overdue business-to-business invoice.
LedgerKit provides estimates based on the information entered and the configured rates. Results do not constitute accounting, tax or legal advice. Check the latest official guidance or consult a qualified professional before acting on a calculation.
How this calculator works
If no payment date was agreed, the estimated due date is 30 days after the later of invoice receipt and delivery or completion. Overdue days begin the next day; dates use calendar-day arithmetic.
Statutory interest adds 8 percentage points to the applicable Bank Rate reference. For interest starting January–June, use the preceding 31 December rate; for July–December, use the preceding 30 June rate. The reference is selected for when interest starts, not reset halfway through the debt.
This estimate assumes an unchanged debt and a single annual rate throughout the period. For part-payments, compound interest, disputed acceptance dates or unusual contractual terms, calculate the appropriate periods separately and seek advice.
Worked example
£1,000 outstanding for 30 days at 3.75% + 8% gives £9.66 interest. Add the £70 fixed recovery charge once and the total is £1,079.66.
Frequently asked questions
Can I charge both contractual and statutory interest?
Do not assume so. Contractual provisions can affect the right to statutory interest. Check the agreement and the statutory rules before charging.
Is the daily interest rounded before multiplying?
No. The full decimal daily amount is multiplied by overdue days. Only the total interest is rounded to the nearest penny.
Is the recovery charge added every day?
No. It is a one-off amount for a qualifying late payment: £40 below £1,000, £70 below £10,000 and £100 at £10,000 or more. The tool adds none when there is no overdue balance.
Can this be used for consumer invoices?
The statutory commercial-debt rules are for qualifying business transactions. This tool does not assess eligibility or calculate consumer-debt remedies.
Is the copied summary a formal legal notice?
No. It is a calculation record you can use when preparing a separate interest invoice. It is not a solicitor’s letter or legal advice.