The short version
- Statutory interest is 8% plus Bank Rate on a set reference date.
- Debts starting to run before 1 January 2027 carry 11.75%.
- You can also claim a fixed sum of £40, £70 or £100.
The Bank of England raised Bank Rate from 3.75% to 4% on 5 November 2026.1 You might assume late payment interest jumped straight to 12%. It did not.
How the rate is actually set
Statutory interest is 8% above Bank Rate. But the law fixes the reference date. It uses the rate in force on 30 June for interest that starts to run between 1 July and 31 December. It uses the rate on 31 December for interest starting between 1 January and 30 June.2
| Interest starts to run | Reference date | Rate |
|---|---|---|
| 1 Jul to 31 Dec 2026 | 30 June 2026 (3.75%) | 11.75% |
| 1 Jan to 30 Jun 2027 | 31 December 2026 | 12%, if Bank Rate stays at 4% |
What you can claim
As well as interest, you can claim a fixed sum based on the size of the debt: £40 up to £999.99, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more.3
Work out what you are owed with our late payment calculator.
Common questions
What is the late payment interest rate now?
For interest that starts to run between 1 July and 31 December 2026, it is 11.75%. That is 8% plus the 3.75% Bank Rate in force on 30 June 2026.
Can I charge late payment interest to consumers?
This statutory right applies to business to business debts. Check your contract for anything else.
Sources
- Official Bank Rate history, Bank of England. Accessed 11 November 2026.
- Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, article 4, legislation.gov.uk. Accessed 11 November 2026.
- Claim debt recovery costs on late commercial payments, GOV.UK. Accessed 11 November 2026.
General information only. This is not legal, insurance or financial advice. Your own policy wording decides what is covered.