Late Payment of Commercial Debts (Interest) Act 1998
We calculate the interest due on unpaid, and late paid, invoices for business-to-business debts referred to us for collection.
13.25% pa
The Late Payment of Commercial Debts (Interest) Act 1998 introduced the statutory right to charge interest on invoices paid late etc.
The statutory rate of interest is currently 13.25% per annum. The charge applies from the date each invoice (or debt) becomes overdue until the invoice (or debt) is paid in full.
The Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002 Regulations (SI2002/1675) subsequently amended the Late Payment of Commercial Debts (Interest) Act 1998 by adding:
The rate of interest for the purposes of the Late Payment of Commercial Debts (Interest) Act 1998 shall be 8 per cent per annum over the official dealing rate in force on the 30th June (in respect of interest which starts to run between 1st July and 31st December) or the 31st December (in respect of interest which starts to run between 1st January and 30th June) immediately before the day on which statutory interest starts to run.
The Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002 Regulations (SI2002/1675)
The ‘official dealing rate’ is defined as:
…the rate announced from time to time by the Monetary Policy Committee of the Bank of England (“the Bank”) and for the time being in force as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short term liquidity in the money markets.
The current (and previous) decisions of the Monetary Policy Committee of the Bank of England (i.e. the Bank of England interest rate) are available here. You can view a table of the different interest rates charged to debtors below.
Interest accrues until the invoice(s) is paid IN FULL.
Interest Rates
The Late Payment of Commercial Debts (Interest) Act 1998, as amended by The Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002 Regulations (SI2002/1675) allows interest to be charged on the late payment of invoices. The rate chargeable is based on the Bank of England base rate as at 31 December and 30 June.
| Period | Reference Rate per annum |
Interest Rate per annum (reference rate plus 8%) |
|---|---|---|
| 1st January – 30th June 2024 Current rate | 5.25% | 13.25% |
| 1st July – 31st December 2023 | 5.00% | 13.00% |
| 1st January – 30th June 2023 | 3.50% | 11.50% |
| 1st July – 31st December 2022 | 1.25% | 9.25% |
| 1st January – 30th June 2022 | 0.25% | 8.25% |
| 1st July – 31st December 2021 | 0.10% | 8.10% |
| 1st January – 30th June 2021 | 0.10% | 8.10% |
| 1st July – 31st December 2020 | 0.10% | 8.10% |
| 1st January – 30th June 2020 | 0.75% | 8.75% |
| 1st July – 31st December 2019 | 0.75% | 8.75% |
| 1st January – 30th June 2019 | 0.75% | 8.75% |
| 1st July – 31st December 2018 | 0.50% | 8.50% |
| 1st January – 30th June 2018 | 0.50% | 8.50% |
| 1st July – 31st December 2017 | 0.25% | 8.25% |
| 1st January – 30th June 2017 | 0.25% | 8.25% |
| 1st July – 31st December 2016 | 0.50% | 8.50% |
| 1st January – 30th June 2016 | 0.50% | 8.50% |
| 1st July – 31st December 2015 | 0.50% | 8.50% |
| 1st January – 30th June 2015 | 0.50% | 8.50% |
| 1st July – 31st December 2014 | 0.50% | 8.50% |
| 1st January – 30th June 2014 | 0.50% | 8.50% |
| 1st July – 31st December 2013 | 0.50% | 8.50% |
| 1st January – 30th June 2013 | 0.50% | 8.50% |
| 1st July – 31st December 2012 | 0.50% | 8.50% |
| 1st January – 30th June 2012 | 0.50% | 8.50% |
| 1st July – 31st December 2011 | 0.50% | 8.50% |
| 1st January – 30th June 2011 | 0.50% | 8.50% |
| 1st July – 31st December 2010 | 0.50% | 8.50% |
| 1st January – 30th June 2010 | 0.50% | 8.50% |
| 1st July – 31st December 2009 | 0.50% | 8.50% |
| 1st January – 30th June 2009 | 2.00% | 10.00% |
| 1st July – 31st December 2008 | 5.00% | 13.00% |
| 1st January – 30th June 2008 | 5.50% | 13.50% |
| 1st July – 31st December 2007 | 5.50% | 13.50% |
| 1st January – 30th June 2007 | 5.00% | 13.00% |
| 1st July – 31st December 2006 | 4.50% | 12.50% |
| 1st January – 30th June 2006 | 4.50% | 12.50% |
| 1st July – 31st December 2005 | 4.75% | 12.75% |
| 1st January – 30th June 2005 | 4.75% | 12.75% |
| 1st July – 31st December 2004 | 4.50% | 12.50% |
| 1st January – 30th June 2004 | 3.75% | 11.75% |
| 1st July – 31st December 2003 | 3.75% | 11.75% |
| 1st January – 30th June 2003 | 4.00% | 12.00% |
| 7th August – 31st December 2002 | 4.00% | 12.00% |
The “period” above relates to the date the invoice / payment became overdue (not the date of the invoice). Potentially a debt will be subject to interest charges at different rates, depending on when each invoice became overdue.
| DCS | Debt Collection Service Limited |