Disputes · Unpaid invoices
Late payment interest calculator
If another business pays you late, the law lets you add interest at 8% a year over the Bank of England reference rate, plus a fixed sum of £40, £70 or £100 for each invoice. Enter your invoices to see what you could add to your claim.
Written by Vanessa Challess, Solicitor, qualified 2003
Enter an amount and a due date to see the interest and fixed sum.
A guide only, not legal advice. Statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998, for business to business debts: 8% a year over the Bank of England reference rate for the half year in which the debt became overdue, simple interest on a 365-day year, plus a fixed sum of £40, £70 or £100 per invoice. Rates last checked 19 October 2026.
Recovering an unpaid invoice, step by step
- 01
Check the paperwork
Find the contract or terms, the order, proof of delivery and the invoice. Note the agreed payment date and any interest clause. If nothing was agreed, interest normally runs from 30 days after the invoice.
- 02
Chase in writing
Send a short, firm reminder with the amount, the invoice number and a date to pay. Keep it factual. Everything you write may be read by a judge later.
- 03
Send a letter before action
Set out the claim, how the amount is worked out (including interest and fixed sums) and a deadline. For a company debtor, allow a reasonable time, normally 14 days in a straightforward case. If the debtor is an individual, including a sole trader, the Pre-Action Protocol for Debt Claims applies instead: enclose its Information Sheet, Reply Form and Financial Statement form, and allow 30 days to reply. If they return the Reply Form, do not issue within 30 days of receiving it, and if you still cannot agree, give at least 14 days' notice before you issue. Use the letters to narrow what is really in dispute, and offer to negotiate or mediate. The court expects both sides to have tried, can order them to try, and can penalise an unreasonable refusal in costs.
- 04
Issue the claim
If you are still not paid, issue a claim in the County Court, which can be done online. Claims of £10,000 or less usually go to the small claims track, where you recover very little of your legal costs, so weigh that up first. Most small claims for a fixed sum of money are now referred automatically to the HM Courts and Tribunals Service small claims mediation service once the claim is defended and proceeding, and the court can sanction a party who does not take part.
- 05
Judgment and enforcement
If the debtor does not respond to the claim, you can ask for judgment in default. A judgment then has to be enforced if it is not paid, for example by enforcement agents, a charging order or freezing a bank account.
Common questions
- Who can claim?
- A business owed money by another business, or by a public body, for goods or services supplied under a contract. It does not apply to debts owed by consumers.
- What if no payment date was agreed?
- Interest normally starts 30 days after the customer received the invoice or the goods or services, whichever is later. Use that date as the due date.
- What if our contract has its own interest clause?
- If the contract gives a substantial remedy for late payment, the contract rate applies instead and there is no fixed sum. A very low contract rate may not count. We can check it for you.
- How do I actually get it paid?
- Add the interest and fixed sums to a clear letter before action with a deadline. Many debts are paid at that stage. If not, the claim can go to court, and the time limit for most contract claims is six years.
- How long do I have to bring a claim?
- Usually six years from the date the money fell due under an ordinary contract, and twelve years if the contract was made as a deed. Do not leave it late: evidence and the debtor's money both disappear.
- What happens if the debtor ignores the claim form?
- They normally have 14 days after being served with the particulars of claim to respond. If they do nothing, you can apply for judgment in default without a hearing.
- Can I use a statutory demand instead of a court claim?
- Only where a company owes more than £750 and the debt is genuinely not disputed. It is a step towards winding the company up. If the debt is disputed, the court can stop it and you may pay the debtor's costs, so take advice first.
- Can I freeze the debtor's assets?
- In urgent cases a court can make a freezing order, but the tests are strict: you must show a good arguable case and a real risk that assets will be moved or dissipated. Applications are costly, so speak to a solicitor at once if you think assets are at risk.
Sources: Late Payment of Commercial Debts (Interest) Act 1998 (sections 4, 5A, 8 and 9); Late Payment of Commercial Debts (Rate of Interest) (No 3) Order 2002; Bank of England Bank Rate history; Practice Direction on Pre-Action Conduct (paragraphs 3, 4, 6 and 8 to 12); Pre-Action Protocol for Debt Claims; Civil Procedure Rules Part 10 and Part 12, rules 1.1(2)(f) and 3.1(2)(o) and Practice Direction 51ZE (small claims mediation); Limitation Act 1980, sections 5 and 8; Insolvency Act 1986, section 123.
Send an enquiry
Tell us what you need.
A solicitor reads every enquiry and replies personally, usually within one working day. No call centre, no chatbot.
General information about the law in England and Wales. It is not legal advice. Bonsai Law Ltd is incorporated in England (company number 13926937) and authorised and regulated by the Solicitors Regulation Authority (SRA No 8000734). Registered office: The Business Terrace, Maidstone House, King Street, Maidstone, Kent ME15 6JQ. Complaints