How this tool works
How the estimate is calculated
The tool calculates simple interest as principal × (entered reference rate + 8 percentage points) × overdue days ÷ 365. It adds the statutory fixed recovery amount based on the principal (£40 below £1,000, £70 from £1,000 to below £10,000, and £100 at £10,000 or above). It does not compound interest or include additional proven recovery costs.
The Bank of England reference rate is fixed for half-year periods. If the overdue period crosses a rate-change date, split the period and calculate each part using its applicable rate. The estimate below applies one rate to the whole period and should not be used across a rate change without splitting it.
Check eligibility and terms
Statutory interest generally concerns qualifying commercial debts, not consumer invoices. A contract may provide a different remedy. Confirm when the debt became late, the applicable rate and whether the debt qualifies before adding a charge.
Assumptions and limitations
This is a browser-based estimate using the figures and periods you enter. It does not verify a contract, decide legal validity, calculate tax liability or replace current HMRC guidance. Reviewed 7 October 2026.
Frequently asked questions
Can I use this for any overdue invoice?
No. It is an estimate for potentially eligible commercial debts. Check eligibility and the contract remedy first.
What if the overdue period crosses a rate change?
Split the calculation by half-year and apply the relevant reference rate to each period.