The Late Payment of Commercial Debts (Interest) Act Statutory Interest Calculator.

Please follow the instructions below.

!nput 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.

Businesses trading without a contract or those trading with contracts that need reviewing may find this link to the Terms of Trade page helpful.

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.

Manual calculation of late payment interest.

This calculator is written in JavaScript. If for any reason your browser cannot support JavaScript or you are experiencing difficulty in making the calculator work, please look at the following instructions below with regard to manually calculating your interest calculations.

The formula used by the interest calculator is as follows:

Debt times the interest rate times the number of days late divided by 365

The daily rate is calculated as follows:
Debt times the interest rate divided by 365

Example

If the reference rate is 4% for the six-month period when the debt became late, then the statutory interest rate is 12% (4% reference rate plus 8%)
Debt is £851.06 plus £148.94 VAT = total £1,000

If this debt is 30 days late, then the interest owed is:

• £1,000 x 12% = £120 (the annual rate)
• £120 ÷ 365 = 32.9p (the daily rate)
• 32.9 pence x 30 days = £9.86 (the interest owed to date)

The interest rate which applies to your debt is identified as follows:

Late payment interest rate is 8% plus the reference rate. The current reference rate for the period 1st July 2010 to 31st December 2010 is 0.5%

Information on historic late payment reference rates, dating back to 7th August 2002.

How to inform your debtor of the interest and/or compensation due:

View our letters section for advice on informing your debtor of the interest due.

Further information can be found by reading the users guide to late payment legislation