The rate is a formula, not a fixed number, and it isn't necessarily today's rate. Under Article 4 of the Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, the reference rate is fixed twice a year: the Bank of England rate in force on 30 June applies to any debt overdue between 1 July and 31 December, and the rate in force on 31 December applies to debts overdue between 1 January and 30 June. For a debt overdue in the second half of 2026, for instance, the applicable base rate is the one in force on 30 June 2026 — 3.75%, unchanged through the 17 June and 30 July 2026 decisions — making the statutory rate 11.75% for that period. A debt overdue in the first half of the year instead uses the rate in force on the previous 31 December — a different figure, not automatically 11.75%. Check [the Bank of England's own rate history](https://www.bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate) for the reference date that matches when your invoice became overdue, not today's rate.
On top of interest, fixed compensation is also due automatically, tiered by the size of the debt (Late Payment of Commercial Debts Regulations 2002, as amended 2013): £40 under £1,000, £70 between £1,000 and £9,999.99, £100 at £10,000 or more. Neither interest nor compensation needs a court order, or even a formal chase, to start applying — both are rights implied by law into every qualifying business-to-business invoice.
