LETTER 1FreeFriendly reminder
A polite nudge with the figures attached. Send this one first.
Tone 1/3
Late payment interest calculator · UK
Paid late?
Let’s work out what you’re owed.
A business that pays late owes you interest and a fixed sum on top of the invoice. Pop in the invoice and we’ll do the sums, then write three chase letters with the figures filled in.
- 1998 Act and gov.uk guidance
- Bank of England rates, checked
- Nothing you type leaves your browser
£167.35
Claimableon a £4,800 invoice, 63 days late
7 Aug → 9 Oct · dots grow as the debt ages
Step 1
Your invoice
This debt is six years old or more, so it may be too late to claim it in court (six years in England, Wales and Northern Ireland; different rules apply in Scotland). Get legal advice before you threaten court action.
A contract can override the statutory sums, so check yours. What that means.
Step 2
Send the chase letters
Three letters, each firmer than the last. Every one carries your figures. The dots get heavier with each.
LETTER 1Free
LETTER 2LockedFormal demand
Sets out the sums owed under the Act. Send it after 7 days.
Tone 2/3
LETTER 3LockedFinal notice
The last step before court. Send it if the demand is ignored.
Tone 3/3
Thank you. Letters 2 and 3 are now unlocked in this browser.
Check the figures against your contract and gov.uk before sending. This is a calculator and template, not legal advice.
Names on the letter
Your letterhead
PNG, JPG or WebP, up to 5 MB.
Saved only in this browser and never sent anywhere. Untick to delete it.
Assumes the invoice was overlooked and asks for payment within 7 days. It does not mention interest yet.
Enter the amount outstanding and the due date to fill in this letter.
You have edited this letter, so changes to the form will not update it.
Click the page to edit. The PDF and print versions use an A4 page with your logo, colour and footer.
Claims statutory interest and the fixed sum under the Act, shows the figures and the daily rate, and gives 7 days to pay. gov.uk suggests sending a new invoice for the interest and fixed sum too.
Letter 2 is locked
Unlock the formal demand and the final notice for one payment of . Both fill in with your figures, the same way as letter 1.
Unlock both lettersYou have edited this letter, so changes to the form will not update it.
Click the page to edit. The PDF and print versions use an A4 page with your logo, colour and footer.
The last step before court when your client is a company. It refers to your earlier letters, restates the total and gives 14 days to pay before you may start a county court claim.
Before you go to court. If your client is a sole trader or another individual, the Pre-Action Protocol for Debt Claims applies in England and Wales. It needs a Letter of Claim with set forms and gives 30 days to reply, so this letter is not enough on its own. In Scotland, claims go to the sheriff court, so change “county court” in the letter.
Letter 3 is locked
Unlock the formal demand and the final notice for one payment of . Both fill in with your figures, the same way as letter 1.
Unlock both lettersYou have edited this letter, so changes to the form will not update it.
Click the page to edit. The PDF and print versions use an A4 page with your logo, colour and footer.
The rules
Where the figures come from
+8%
Interest, 8% above Bank Rate
Simple interest on the overdue amount, from the day after it was due until you are paid.
A fixed sum per invoice
£40 if the debt is under £1,000. £70 from £1,000 to £9,999.99. £100 at £10,000 or more.
Bank Rate table, last checked
Rates come from the Bank of England and are checked against its published history.
Questions
Common questions
What is statutory interest?
Statutory interest is simple interest that the law lets you add when another business pays you late. Under the Late Payment of Commercial Debts (Interest) Act 1998 it is 8% a year above the Bank of England reference rate. The reference rate is the Bank Rate on 30 June or 31 December, whichever came last before the interest started.
Who can claim it?
Any business that sells goods or services to another business or to a public body, including sole traders, freelancers and limited companies. Both sides must be acting in the course of business, so it does not apply to sales to consumers.
When does interest start?
The day after the payment due date. If you did not agree payment terms, payment is late 30 days after your client gets the invoice, or 30 days after you deliver the goods or service if that is later. The rate is set on the day interest starts and stays the same until the debt is paid, even if Bank Rate changes.
What is the fixed sum?
Once interest starts, you can also claim a fixed sum towards the cost of recovering the debt: £40 for a debt under £1,000, £70 for £1,000 to £9,999.99 and £100 for £10,000 or more. You can charge it once for each late payment. If your reasonable costs of recovering the debt are higher, you can claim the difference too.
Do I need a solicitor?
No. You can write to your client yourself, and many businesses send a reminder, then a formal demand, then a final notice. If your client is a sole trader or another individual and you may go to court in England or Wales, follow the Pre-Action Protocol for Debt Claims first. Get legal advice if the debt is large or disputed.
What if my contract has its own late payment terms?
If your contract sets its own interest rate or other remedy for late payment, that applies instead of statutory interest, as long as it is a “substantial remedy”. It counts as substantial unless it is too small to compensate you or to deter late payment, and it would also be unfair to rely on it. Contracts with public bodies cannot set a lower interest rate than the statutory one.