The Late Payment Act 1998, explained
Full anatomy of the statute the calculator implements. Statutory compensation, interest, recovery costs, worked through.
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Late payment calculator.
Enter your invoice amount, the days overdue, and the Bank of England base rate. The calculator returns statutory compensation, statutory interest, and representative recovery costs under the Late Payment Act.
8% above base rate (12.75% p.a., 60 days)
The Ledger
| Principal | £5,000.00 |
| Statutory compensation | £70.00 |
| Statutory interest | £104.79 |
| Recovery costs (15%, representative) | £750.00 |
| Total demanded from debtor | £5,924.79 |
| Remitted to you | £5,000.00 |
Statutory compensation: £40 up to £999.99, £70 to £9,999.99, £100 on £10,000 and above. Statutory interest: 8% above the Bank of England base rate in force on the last 31 December or 30 June before default, calculated daily. Recovery costs: assessed per case under Regulation 5A of the Late Payment Regulations 2002. 15% is representative practice.
How to use the figures
The total demanded from the debtor is the sum we would pursue under our demand sequence. The principal is what we remit to you. The difference is the debtor‑payable portion from which our recovery costs are drawn; we do not take anything out of your principal.
If the total looks right and you want us to pursue it, submit the case. If you would prefer to understand the underlying statute first, the pillar guide walks through each element in detail.
A note on accuracy
The calculator assumes simple interest calculated pro‑rata for the number of days you specify. Actual interest on a contested debt is calculated daily from the date of default to the date of payment, at the statutory rate in force on the last reference date before default. The result here is generally within pence of the correct figure for most matters. The itemisation on any actual demand we send would be exact, not representative.
Instruct us on this invoice.
Send us the invoice and the debtor's details. Letter I goes out the same day on acceptance.
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