Be Small Claims Wise guides › Claiming interest on a debt

Claiming interest on a debt

A claimant can add interest to a debt from the date it fell due. This guide explains the usual 8% rate, how to work it out day by day, the higher business-to-business rate under the Late Payment Act, and what happens to interest after judgment.

Checked against official sources on 30 September 2026. Court fees from 13 July 2026; enforcement agent fees from 1 May 2026.

The legal basis: s.69 County Courts Act 1984

Section 69 provides that in county court proceedings for the recovery of a debt or damages, the judgment may include simple interest ‘at such rate as the court thinks fit or as may be prescribed’ on all or part of the sum, for all or part of the period between the date the cause of action arose and the date of judgment. Two things follow. The rate is not fixed by the section; 8% is the rate conventionally claimed, matching the Judgments Act rate, and gov.uk says that for ordinary debts ‘the rate is usually 8%’. And the interest is simple, not compound: it is calculated on the original sum only.

Section 69(4) adds that no interest is awarded under the section for any period during which interest on the debt already runs for some other reason. So if your contract set an interest rate, or the debt is a business-to-business debt carrying Late Payment Act interest, you claim that interest instead, not both.

The formula and a worked example

If you are claiming a fixed (specified) amount you must work the interest out yourself; if the claim is for an amount to be decided by the court, the court calculates it. The gov.uk method is:

1. Work out the yearly interest: multiply the amount you are claiming by 0.08.
2. Work out the daily interest: divide the yearly figure by 365.
3. Multiply the daily figure by the number of days the debt has been overdue.

Gov.uk’s example: on £1,000 the annual interest is £80; £80 divided by 365 is about 22p a day; after 50 days the interest is £11. The claim form asks for the amount of interest to the date of issue and the daily rate so that it can continue to run until judgment or payment.

The interest and fee calculator does the arithmetic and shows the daily rate to put on the claim form.

From what date, and the effect on the court fee

Section 69 allows interest for the period between the date when the cause of action arose and the date of judgment. For a debt, that is the date the money became due: the invoice due date or the repayment date agreed for a loan. Interest cannot be claimed under s.69 for any earlier period. Where a debt was payable in instalments falling due on different dates, the interest on each instalment runs from its own date, which is why such claims need more than one start date.

Interest is added to the claim when the court fee is worked out: Schedule 1 to the Civil Proceedings Fees Order says the fee on a specified claim is calculated on the total of the claim and the interest, and gov.uk confirms the fee ‘is based on the amount you’re claiming, plus any interest’. A £2,950 debt with £90 of interest is a £3,040 claim and attracts the £205 fee rather than £115. By contrast, when the court assesses the value of a claim for allocation to a track, it disregards interest (CPR 26.13(2)), so interest cannot push a claim off the small claims track. See court fees.

Business-to-business debts: the Late Payment Act

The Late Payment of Commercial Debts (Interest) Act 1998 applies to contracts for the supply of goods or services where both the purchaser and the supplier are acting in the course of a business. It does not apply to consumers, so a trader cannot use it against a private customer, and one individual cannot use it against another.

The statutory rate is 8% over the Bank of England Bank Rate in force on the 30 June or 31 December immediately before interest starts to run. Bank Rate has been 3.75% since 18 December 2025 and was held at that level on 17 September 2026, so the rate for interest starting to run at any time in 2026 is 11.75%. On a £1,000 debt that is £117.50 a year, or about 32p a day. If the contract itself specifies a different rate of interest for late payment, the statutory rate cannot be used.

The Act also gives the supplier a fixed sum as compensation for recovery costs, once for each late payment:

If reasonable recovery costs exceed the fixed sum, the supplier is also entitled to the difference (s.5A(2A)). See letter before claim for how a business claimant sets these figures out before issuing.

Contractual interest

If the written agreement set an interest rate for late payment, that rate applies from the date the agreement says, and because interest on the debt ‘already runs’ it displaces s.69 interest for the same period (s.69(4)). Claim it as a term of the contract, quoting the clause, and set out the calculation in the same way. The same applies to a business-to-business contract that fixes its own late-payment rate: the contractual rate is used, not the statutory one.

One caution from the Practice Direction on Pre-Action Conduct: where a claimant has failed to comply with the pre-action steps, the court may deprive them of interest for a period or award it at a lower rate; where the defendant is at fault, it may award interest at a higher rate, not exceeding 10% above base rate. Interest is therefore one of the levers the court uses to police conduct before issue.

Interest after judgment

Once judgment is entered, s.69 interest stops and a different regime applies. Under the County Courts (Interest on Judgment Debts) Order 1991, a county court judgment carries interest at the Judgments Act 1838 rate of 8% only where the judgment is for £5,000 or more. Most small claims judgments are for less than that and so carry no interest at all after judgment. A judgment on a Consumer Credit Act regulated agreement carries none whatever the amount.

Where a judgment is for £5,000 or more, interest runs from the date of judgment, but with limits. If payment is deferred or by instalments, interest does not accrue on an instalment until it falls due. If the creditor takes county court enforcement proceedings, the debt stops carrying interest from then on, unless those proceedings produce no payment at all, in which case interest accrues as if they had never been taken; applying for a charging order does not trigger this rule. No interest runs while an attachment of earnings order or administration order is in force. Payments received are applied first to the principal and then to interest. No arrears of judgment interest can be recovered more than six years after they fell due (Limitation Act 1980 s.24(2)).

Where a judgment is transferred to the High Court for enforcement by a High Court Enforcement Officer, the form N293A provides for the writ to include interest at a stated rate from the date of transfer, and the creditor certifies the interest accrued and the daily rate. See bailiffs and High Court enforcement and enforcing a judgment. For a question about your own figures, ask ClaimsBot.

Sources

• County Courts Act 1984 s.69 – legislation.gov.uk
• Make a court claim for money: claim the interest – gov.uk
• Civil Proceedings Fees Order 2008, Schedule 1 (fee calculated on claim plus interest)
• Late Payment of Commercial Debts (Interest) Act 1998 s.5A – legislation.gov.uk
• Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002
• Bank of England: Bank Rate
• County Courts (Interest on Judgment Debts) Order 1991
• Judgments Act 1838 s.17 – legislation.gov.uk