Band 01
Up to £999.99
£40
For smaller overdue commercial debts below £1,000, the fixed recovery cost is £40.
LATE PAYMENT TOOL • VISUAL GUIDE
Compensation Bands
A simple visual guide to the fixed recovery costs that may be added to overdue commercial debts.
WHAT THIS MEANS
A fixed amount based on the unpaid debt
The fixed compensation amount is based on the size of the overdue commercial debt. It is separate from late-payment interest.
The Late Payment Tool uses the invoice amount entered to select the appropriate compensation band.
Important:
This is general guidance only. Check the contract terms,
current GOV.UK guidance and the circumstances before
relying on a claim.
VISUAL BAND VIEW
The three fixed compensation bands
The bands step up as the size of the unpaid commercial debt increases.
Band 02
£1,000 to £9,999.99
£70
For overdue commercial debts from £1,000 up to £9,999.99, the fixed recovery cost is £70.
Band 03
£10,000 or more
£100
For overdue commercial debts of £10,000 or more, the fixed recovery cost is £100.
THRESHOLD CHART
Where the fixed compensation changes
Up to £999.99 £40
£1,000 to £9,999.99 £70
£10,000 or more £100
Lower debt Higher debt
QUICK EXAMPLES
Which band applies?
The unpaid debt is below £1,000.
The unpaid debt sits in the £1,000 to £9,999.99 band.
The unpaid debt is £10,000 or more.
HOW IT FITS WITH INTEREST
Compensation is not the same as interest
Late-payment interest is calculated over time, based on the debt, the annual interest rate and the number of days overdue.
Fixed compensation is different. It is a fixed recovery cost based on the size of the unpaid debt.
Interest Changes over time
Depends on rate, amount and days overdue.
Fixed compensation Based on debt size
Uses the £40, £70 or £100 band.
USE THE TOOL
Calculate the full estimate
Use the Late Payment Tool to estimate days overdue, interest, fixed compensation and a draft reminder letter.
Open Late Payment Tool