Freelance Invoice Late Fee & Statutory Interest Calculator
Calculate statutory late payment interest, daily accumulation, and recovery compensation fees for overdue freelance and B2B invoices under UK/EU late payment legislation.
Overdue Invoice & Commercial Terms
How Statutory Late Payment Interest & Compensation Works
Freelancers, independent contractors, and business-to-business suppliers have statutory legal rights to claim interest and compensation when commercial clients pay invoices late. In the UK, this is governed by the Late Payment of Commercial Debts (Interest) Act 1998 and the 2013 Regulations. In the European Union, it is codified under Directive 2011/7/EU.
The Statutory Interest Formula
Unless a valid commercial contract explicitly agrees upon a higher interest rate, the statutory interest rate is:
Daily Interest = Principal × (Statutory Annual Rate / 100) / 365
Accrued Interest = Daily Interest × Overdue Days
Statutory Debt Recovery Compensation Tiers
In addition to daily interest, creditors are legally entitled to charge a fixed compensation sum to cover the administrative cost of debt recovery:
- Under £1,000 (€1,000): £40 (€40) flat compensation fee
- £1,000 to £9,999.99 (€1,000 to €9,999.99): £70 (€70) flat compensation fee
- £10,000 or more (€10,000 or more): £100 (€100) flat compensation fee
Frequently Asked Questions
When does an invoice legally become overdue?
Under standard commercial terms, an invoice is overdue 30 days after the client receives the invoice or goods/services, unless a shorter or longer payment term (up to 60 days standard) was agreed in contract.
Can a client refuse to pay statutory interest and compensation?
Statutory interest is an established legal right for commercial B2B transactions in the UK and EU. Clients cannot contract out of late payment terms if the contractual terms fail to provide a substantial remedy for late payment.
Does this apply to consumer (B2C) clients?
No. Late payment legislation applies strictly to commercial transactions (business-to-business, freelancers to businesses, and public authorities). B2C client contracts depend on consumer credit law and explicitly agreed contract clauses.