TOOL • WORKING PROTOTYPE

Late Payment Tool

Estimate late-payment interest, compensation and recovery wording.

Enter the invoice details below to estimate days overdue, interest, statutory compensation and a practical recovery letter draft.

Early public version note Please check the figures, contract terms and current guidance before relying on the output.

Read the guidance notes before using the tool →

CALCULATOR INPUTS

Invoice details

Add the invoice amount, due date and annual interest rate. The annual interest rate is entered manually so it can be checked before use.

RESULTS PREVIEW

Calculation summary

Results update automatically once the amount, due date, calculation date and rate have been entered.

Days overdue —

Estimated interest —

Statutory compensation —

Estimated total recoverable —

FORMULA USED

Interest is estimated using invoice amount, annual interest rate and days overdue.

amount × annual rate × days overdue ÷ 365

COMPENSATION BANDS

The fixed recovery cost is shown as £40, £70 or £100 depending on the invoice amount entered. Check that the debt and circumstances qualify before relying on the result.

Visual guide Compensation Bands

See how the £40, £70 and £100 fixed recovery cost bands work.

Visual guide Reminder Timing

See why the calculation date should be updated before follow-up letters.

LETTER OUTPUT

Recovery letter preview

Choose a tone and review the generated wording before copying it into an email or letter.

Draft recovery letter Waiting for details

Dear [Customer name],

We are writing regarding invoice [Invoice number], which remains unpaid after its due date.

Once invoice details are entered, the estimated late-payment interest, statutory compensation and total amount will appear here.

Please arrange payment of the outstanding balance as soon as possible.

Kind regards,
[Your business name]

GUIDANCE

Designed to stay practical and cautious

Business context matters

This tool is intended for commercial late-payment scenarios. Users should consider contract terms and whether statutory interest is appropriate.

Rate should be checked

GOV.UK describes statutory interest as 8% plus the Bank of England base rate for business-to-business transactions, unless a different contractual rate applies.

Not legal advice

This calculator provides general information and a practical document draft. It does not replace legal or professional advice.