Guide · checked 09/10/2026
Statutory interest rate for late payment
For interest that starts between 1 July 2026 and 31 December 2026, the statutory late payment interest rate is 11.75% a year: 8% plus the Bank of England Bank Rate of 3.75% in force on 30 June 2026. The rate is fixed on the day interest starts and stays the same until the debt is paid.
How the rate is set
Under the Late Payment of Commercial Debts (Interest) Act 1998, a business that pays another business late owes simple interest at 8% a year above the reference rate. The reference rate is the Bank Rate in force on 30 June (for interest that starts between 1 July and 31 December) or on 31 December (for interest that starts between 1 January and 30 June), immediately before the day interest starts.
Interest starts the day after the payment was due. Once it starts, the rate does not change for that debt, even if the Bank of England moves Bank Rate later.
Statutory interest rates since 2022
| Interest starts | Reference date | Bank Rate | Statutory rate |
|---|---|---|---|
| 1 July to 31 December 2026 | 30/06/2026 | 3.75% | 11.75% |
| 1 January to 30 June 2026 | 31/12/2025 | 3.75% | 11.75% |
| 1 July to 31 December 2025 | 30/06/2025 | 4.25% | 12.25% |
| 1 January to 30 June 2025 | 31/12/2024 | 4.75% | 12.75% |
| 1 July to 31 December 2024 | 30/06/2024 | 5.25% | 13.25% |
| 1 January to 30 June 2024 | 31/12/2023 | 5.25% | 13.25% |
| 1 July to 31 December 2023 | 30/06/2023 | 5% | 13% |
| 1 January to 30 June 2023 | 31/12/2022 | 3.5% | 11.5% |
| 1 July to 31 December 2022 | 30/06/2022 | 1.25% | 9.25% |
Worked example
An invoice for £4,800.00 was due on 7 August 2026. Interest starts on 8 August 2026, so the reference date is 30 June 2026 and the rate is 11.75%. To 9 October 2026 that is 63 days:
£4,800.00 × 11.75% × 63 ÷ 365 = £97.35
Interest keeps building at £1.55 a day. On top of the interest, the client also owes a fixed sum of £70.00 for a debt of this size (see late payment compensation), so the total claimable on top of the invoice is £167.35.
Questions
What is the statutory interest rate for late payment in the UK?
It is 8% a year plus the Bank of England reference rate. For interest that starts between 1 July 2026 and 31 December 2026 the Bank Rate on 30 June 2026 was 3.75%, so the statutory rate is 11.75%.
Does the statutory interest rate change if Bank Rate changes?
No. The rate is fixed on the day interest starts to run, which is the day after the due date, and it stays the same until the debt is paid.
Is statutory interest simple or compound?
Simple. You work it out as the amount owed × the yearly rate × the number of days late ÷ 365. Interest is never added to the debt and charged interest again.