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Late payment interest calculator for locum invoices
When an organisation pays your invoice late, the Late Payment of Commercial Debts (Interest) Act 1998 lets you add interest at 8% over the Bank of England reference rate, plus a fixed sum of £40, £70 or £100. For interest that starts between 1 July 2026 and 31 December 2026, the reference rate is 3.75%, so statutory interest is 11.75% a year.
Enter the amount and the dates below to see what a late invoice has earned so far. It is general information about a statutory right, not legal advice.
Checked on against the primary sources listed at the end of this page.
The unpaid invoice
Interest runs from the day after the agreed due date. Agreed terms longer than 60 days may be cut back to 60 unless they are not grossly unfair to you. Interest is counted to today.
What you can add
£87.38
45 days late at 11.75% a year
Reference rate: Bank Rate of 3.75% on 30 June 2026, fixed because interest started on 28 August 2026. Plus 8 points.
General information, not legal advice. The Act applies between businesses; your contract, or an agency or framework agreement, may set its own remedy.
How is statutory late payment interest calculated?
Take the unpaid amount, multiply it by the statutory rate for the annual figure, divide by 365 for the daily figure, and multiply by the days since the due date. The rate is 8% over the Bank Rate in force on the 30 June or 31 December before interest starts to run, and it is fixed at that point: if Bank Rate moves while the invoice is outstanding, your rate does not.
Example: a £1,000.00 invoice due on 31 August 2026 and paid on 30 September 2026 is 30 days late. Interest started on 1 September 2026, so the reference rate is the 3.75% in force on 30 June 2026, giving 11.75%. That is £0.32 a day and £9.66 in interest, plus £70.00 fixed compensation: £79.66 in all.
| Interest starts | Bank Rate on | Reference rate | Statutory rate |
|---|---|---|---|
| 1 July 2026 to 31 December 2026 | 30 June 2026 | 3.75% | 11.75% |
| 1 January 2026 to 30 June 2026 | 31 December 2025 | 3.75% | 11.75% |
| 1 July 2025 to 31 December 2025 | 30 June 2025 | 4.25% | 12.25% |
| 1 January 2025 to 30 June 2025 | 31 December 2024 | 4.75% | 12.75% |
| 1 July 2024 to 31 December 2024 | 30 June 2024 | 5.25% | 13.25% |
| 1 January 2024 to 30 June 2024 | 31 December 2023 | 5.25% | 13.25% |
How much fixed compensation can I claim on a late invoice?
Section 5A of the Act gives a fixed sum once interest starts to run, on top of the interest, charged once per payment:
| Unpaid amount | Fixed sum |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
If your reasonable costs of recovering the debt are more than the fixed sum, the Act lets you claim the difference as well.
When is a locum invoice legally late?
If you agreed a payment date, the invoice is late the day after it. Agreed terms longer than 60 days with a business purchaser are cut back to 60 days unless they are not grossly unfair to you, and a public authority is held to 30. If you agreed nothing, the debt falls due at the end of 30 days that begin with the later of the day you did the work and the day the organisation received the invoice.
Putting your payment terms on every invoice avoids the argument. The free locum invoice template lets you choose payment terms and prints the due date on the invoice.
Does the Late Payment Act apply to locum invoices?
It applies business to business. A self-employed GP, pharmacist, nurse or therapist who invoices a GP surgery, pharmacy, clinic or agency for work is supplying services as a business, and so is the buyer. It does not apply to wages: a bank shift paid through a trust's payroll, or agency work paid through an umbrella company's PAYE, is pay from an employer, and late pay there is an employment matter.
Check your terms first. GOV.UK notes you cannot claim statutory interest if your contract sets a different interest rate, and agency or framework agreements often set their own payment rules. If a lot of money is at stake, take legal advice before a letter before action.
How do I add late payment interest to a chaser?
- Send a plain reminder. Soon after the due date, resend the invoice with its number, amount, due date and your bank details, and ask whether anything is missing.
- Chase again, naming the Act. If there is still no payment, say that statutory interest and the fixed compensation sum under the Late Payment of Commercial Debts (Interest) Act 1998 will apply from the due date.
- Send an updated invoice. Issue a new invoice or statement that adds the interest to date and the fixed sum, with the daily rate so the payer can see it grow.
- Write a letter before action. Give a clear final deadline, set out the amounts and say you will start a court claim if they are not paid.
- Start a court claim. In England and Wales you can claim online through the county court; Scotland and Northern Ireland have their own processes. The court fee depends on the amount, including interest.
If you would rather not write the reminders yourself, Sessional's automatic invoice chasers send them for you at 14, 21 and 28 days past due on Plus and Pro, each with the original PDF attached. See invoicing in Sessional for how invoices, payments and replies are tracked.
Reference notes | Questions
Frequently asked questions
What is the statutory late payment interest rate right now?
11.75% a year for interest that starts to run between 1 July 2026 and 31 December 2026: 8 points over the Bank of England Bank Rate of 3.75% in force on 30 June 2026. The reference rate is fixed by the date interest starts and stays the same for the life of that debt.
Can a locum charge late payment interest to a GP surgery?
Usually, yes, when you invoice as a self-employed business and the organisation buys your services as a business. The Act covers business to business contracts for goods or services. It does not cover pay from an employer, such as a trust bank shift paid through payroll, and GOV.UK notes you cannot claim statutory interest if your contract sets a different interest rate.
How much compensation can I add to a late invoice?
A fixed sum set by section 5A of the Act: £40 if the debt is under £1,000, £70 for debts of £1,000 to £9,999.99, and £100 for £10,000 or more. You can charge it once for each payment. If your reasonable costs of recovering the debt are higher, the Act lets you claim the difference too.
When does interest start if we never agreed payment terms?
The debt is due at the end of a 30-day period that begins with the later of the day you did the work and the day the organisation received your invoice. Interest starts the next day.
Do I have to claim the interest?
No. It is a right, not a duty, and many locums use it only when a payer has ignored reminders. If you do add it, GOV.UK says to send a new invoice showing the interest and compensation.
Stop chasing invoices by hand
Sessional turns your logged sessions into invoices, shows what is paid and what is overdue, and on Plus and Pro chases overdue invoices by email without you writing a word. It works for 17 locum professions, from pharmacists to nurses. Basic is free, with no card.
Sources
Each source below was read on unless it says otherwise. Rules and rates change: check the source before you rely on a figure, and tell us if something here is out of date.
- Late Payment of Commercial Debts (Interest) Act 1998, section 4: interest starts the day after the relevant day; the 30-day default period; the 60-day cap on agreed terms with a business unless not grossly unfair
- Late Payment of Commercial Debts (Interest) Act 1998, section 5A: the fixed sums of £40, £70 and £100, and reasonable recovery costs above them
- Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, article 4: 8% over the official dealing rate in force on the 30 June or 31 December before interest starts to run
- Bank of England, official Bank Rate history: Bank Rate of 3.75% from 18 December 2025, with no change listed in 2026 to the date we read it, and the earlier rates in the reference table
- GOV.UK, late commercial payments: charging interest and debt recovery: the daily interest method, that a contract rate replaces statutory interest, that you send a new invoice to add interest, and the fixed sums charged once per payment
- GOV.UK, make a court claim for money: county court claims in England and Wales, the fee bands, and that Scotland and Northern Ireland have their own process
The reference rate table is updated after each 30 June and 31 December. For a half-year it does not hold yet, the calculator says so rather than borrowing another half-year's rate.
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