Late Payment of Commercial Debts Interest Act 1998: How to Claim Statutory Interest

Two Interest Regimes — Don't Blend Them

When you're owed money and heading to county court in England and Wales, you can claim interest on the debt. But you need to pick the right statutory basis and state it explicitly in your Particulars of Claim. The court won't award interest you haven't pleaded for, and you cannot combine two different statutory regimes on the same debt.

The Late Payment Act (B2B Only)

The Late Payment of Commercial Debts (Interest) Act 1998 applies exclusively to business-to-business contracts — one business supplying goods or services to another. It does not cover consumer transactions, employment disputes, or debts owed by individuals acting in a personal capacity.

The rate is 8% above the Bank of England base rate in force on the 31 December or 30 June reference date relevant to each period. If the debt is overdue across more than one period, use the applicable rate for each period. Interest accrues as simple interest from the day after the contractual payment date.

On top of the interest, you're entitled to fixed statutory compensation:

This compensation is a fixed statutory entitlement for each qualifying debt, in addition to interest, and you do not need to prove a loss. The amount depends on the unpaid commercial principal sum for that debt. If each of three invoices represents a separate qualifying debt, you can claim the fixed compensation for each one.

Under Section 8 of the Act, a contract term that excludes statutory interest is void unless there is a substantial contractual remedy for late payment. Section 9 treats a remedy as substantial unless it is insufficient to compensate for or deter late payment and it would be unfair or unreasonable to rely on it; the assessment considers the relevant circumstances.

Section 69 (Everything Else)

For claims that don't qualify under the Late Payment Act — consumer disputes, personal debts, non-commercial arrangements — you claim interest under Section 69 of the County Courts Act 1984 at 8% per annum, simple interest. This is discretionary (the judge decides whether to award it), but in practice it's routinely granted on straightforward debt claims.

Calculate the daily rate:

Daily interest = principal × 0.08 ÷ 365

Multiply by the number of days from when the debt became due until the date you issue the claim. State this figure in your Particulars of Claim, then add: "and continuing at [daily rate] per day until judgment or sooner payment."

How This Looks in Your Claim

In the Particulars of Claim on Form N1 or OCMC, include a paragraph like:

"The claimant claims interest pursuant to the Late Payment of Commercial Debts (Interest) Act 1998 at the statutory rate of 8% above the Bank of England base rate for each relevant period. Interest accrued from [payment due date] to [issue date] totals £[amount], calculated using the relevant reference dates and rates. The claimant also claims fixed statutory compensation of £[40/70/100] pursuant to Section 5A of the Act."

For Section 69 claims, adjust the wording accordingly — reference Section 69 CCA 1984, state 8% per annum, and give the calculation.

The interest accrued to the date of issue gets added to the principal when calculating which fee band applies. A £2,900 debt with £150 of accrued interest pushes the claim value to £3,050 — which lifts the issue fee from £115 to £205. Run the numbers before filing.

The Making a County Court Money Claim guide includes an interest calculator that handles both regimes and shows exactly where to enter the figures on the claim form.

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