Please input the date the contract with your debtor was made, as this will determine your right to charge interest under the late payment
legislation. If you do not have a contract with your debtor, please enter the date when the agreement to buy and sell goods or
services was made.
Please input the date when the payment became overdue. If you have agreed a credit period with your debtor, then the date you
need to enter here will be the last day of that credit period. Otherwise, the due date is either 30 days after the delivery of
the goods or services OR 30 days after the date of invoicing, whichever is later.
If endeavouring to claim interest retrospectively please complete the 'Date Of Payment' field. If your debtor has not yet paid
you, disregard this field.
Please check the 'Public Sector Company?' field below if your organisation was a public sector body at the time the payment became
overdue.
Then, in the 'Number Of Employees (Creditor)' field, enter the number of employees in your organisation (the creditor) at the time the
payment became overdue.
Next, in the 'Debtor Employees' field, enter the number of employees in the debtor organisation at the time the payment became overdue.
Finally, in the 'Invoice Value' field, enter the invoice value, inclusive of VAT and click the 'Calculate' button.
How To Calculate Statutory Interest
The formula used by the interest calculator is as follows:
(( Debt X Interest Rate ) ÷ 365 ) X Number Of Days Late
Note: Debt should include VAT amount.
How To Calculate Statutory Interest Example
If the base rate is 4% for the six-month period when the debt became late, then the statutory interest rate is 12% (4% base
rate plus 8%).
Debt is £1702.12 plus £297.88 VAT = total £2,000
If this debt is 30 days late, then the interest owed is:
£2,000 x 12% = £240 (the annual rate)
£240 ÷ 365 = 65.8 pence (the daily rate)
65.8 pence x 30 days = £19.72 (the interest owed to date)
Applicable Interest Rate
For contracts dated prior to 7th August 2002 the late payment interest rate is 8% plus the Bank of England base rate that was in
place on the day the debt became overdue. See (PDF) download document for information on the
Bank Of England base rates.
For contracts dated on or after 7th August 2002 the late payment interest rate is 8% plus the reference rate. The current
reference rate for the period 1st January 2008 to 30th June 2008 is 5.5%
