Late Payment Interest
Claim what you are legally owed.
Under the Late Payment of Commercial Debts (Interest) Act 1998, UK businesses have the legal right to charge interest on overdue invoices. Invoify calculates this automatically using the Bank of England base rate plus the 8% statutory margin. Preview the interest amount, view the fixed compensation tier, and generate a formal claim — all from the invoice detail page. There is also a standalone calculator tool for manual calculations.
Why your business needs this
Legal entitlement
UK law gives you the right to charge interest on late B2B payments. Invoify calculates the exact amount you can claim.
One-click calculation
From any overdue invoice, click "Claim Interest" to see the accumulated interest and fixed compensation amount instantly.
Accurate formula
Uses the correct legal formula: Bank of England base rate + 8% statutory margin, applied pro-rata from the due date.
Deterrent effect
Clients who know you calculate and claim late payment interest are motivated to pay on time. The tool itself improves payment behaviour.
Step by step
Invoice becomes overdue
When an invoice passes its due date without full payment, the late payment interest option becomes available on the invoice detail page.
Calculate interest
Click "Claim Late Payment Interest". The calculator applies the BOE base rate + 8% statutory margin to the outstanding amount, pro-rated for the number of days overdue.
Review the breakdown
See the annual interest rate, daily rate, number of overdue days, interest amount, and fixed compensation tier (£40/£70/£100).
Generate a claim
Issue a debit note for the interest and compensation, or use the information in your own follow-up communication.
Everything included
BOE base rate integration
Uses the current Bank of England base rate for accurate calculation.
8% statutory margin
The statutory 8% margin is applied automatically per the Late Payment Act.
Fixed compensation tiers
£40 (debts up to £999.99), £70 (£1,000-£9,999.99), £100 (£10,000+) — calculated automatically.
Pro-rata calculation
Interest is calculated from the due date to the current date, pro-rated by the exact number of overdue days.
Standalone calculator
A dedicated calculator tool at /tools/late-payment-calculator for manual interest calculations.
Debit note generation
Generate a formal debit note for the interest and compensation amount.
Recover £1,000s in lost interest
Most small businesses do not claim late payment interest because the calculation is complex. Automated calculation makes it effortless — and the mere mention of statutory interest in follow-up communications can motivate faster payment.
Configuration Tips
- 1Mention late payment interest in your invoice payment terms as a deterrent — clients pay faster when they know interest applies.
- 2Use the standalone calculator tool to calculate interest before adding it to a follow-up email.
- 3Fixed compensation (£40/£70/£100) is separate from interest and can be claimed on top. Do not forget it.