Understanding Statutory Interest on Late Payments
Learn how statutory interest is calculated and when it applies to overdue invoices.
Understanding Statutory Interest
What is statutory interest?
Statutory interest is the interest that businesses can charge on late commercial payments under UK law. It applies automatically to business-to-business transactions.
Current rate
The statutory interest rate is 8% above the Bank of England base rate. This rate is set on 31 December for the first half of the year (January-June) and on 30 June for the second half (July-December).
When does it start?
Interest begins to accrue from the day after the payment due date. If no due date is specified, it's 30 days after:
- The customer receives the invoice, OR
- You deliver the goods or provide the service (whichever is later)
Can it be waived?
You can choose not to charge statutory interest, but you cannot contract out of the right entirely. Any contract term that tries to remove this right is void.
This page is for general information. It is not legal advice.