3. Work out interest

You can claim interest on the money you’re owed.

If you’re owed money by another business, you can charge interest on a late commercial payment.

For other types of debt, the rate is usually 8%.

To calculate this, use the steps below.

  1. Work out the yearly interest: take the amount you’re claiming and multiply it by 0.08 (ie 8%).
  2. Work out the daily interest: divide your yearly interest from step 1 by 365 (the number of days in a year).
  3. Work out the total amount of interest: multiply the daily interest from step 2 by the number of days the debt has been overdue.

Example

If you were owed £1,000:

  • the annual interest would be £80 (1000 x 0.08 = 80)
  • you’d divide £80 by 365 to get the daily interest: about 22p a day (80 / 365 = 0.22)
  • after 50 days this would be £11 (50 x 0.22 = 11)

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