Cengolio · Fines · Late payment interest
Late payment interest
A business invoice that goes unpaid earns statutory interest at 8% over the Bank of England base rate, and the Act adds a fixed sum of £40 to £100 on top. The rate is not today's base rate: it is the rate frozen on the last 30 June or 31 December before the interest began, and on a small invoice the fixed sum usually outweighs the interest.
Statutory rate 11.75% for interest starting in this half-year: 8% over the 3.75% Bank Rate on 30 June 2026, effective 1 July 2026, verified 18 July 2026 · gov.uk
The Act covers business to business contracts for goods and services; consumer contracts sit outside it, s. 2(1). A contract term that already provides a substantial remedy for late payment displaces the statutory rate, ss. 8 and 9; the figures above assume there is none.
Once there is a judgment, a different regime takes over, 8% under the Judgments Act 1838 with its own thresholds; the judgment interest calculator covers it. In proceedings the court can instead award interest at its discretion, s. 69 County Courts Act 1984 or s. 35A Senior Courts Act 1981, and none of it is arithmetic.
Cross-border case with a German debtor? The German side runs on § 288 BGB; the comparison calculator puts the two regimes side by side.