How to chase an unpaid invoice (UK)

An unpaid invoice is money you've already earned. Most late payers aren't refusing to pay: the invoice is sitting in someone's inbox, waiting for an approval, or forgotten. A clear, polite, steady chase fixes most of them. This guide covers the steps that work for tradespeople and small businesses in the UK, from the day the invoice is due to a claim in court.

In short: send a polite reminder the day after the invoice is due, a firmer one at 7 days, call at 14 days and send a final notice at 30 days. A business customer also owes statutory interest and fixed compensation. If they still don't pay, send a letter before action, then claim online.

Before you chase: make the invoice easy to pay

Many late payments start with the invoice itself. Check yours has:

• a unique invoice number and the date;
• the customer's name and what the work was;
• the amount, with VAT shown separately if you're VAT registered;
• a clear due date ("Payment due by 14 March"), not just "30 days";
• how to pay: bank details, and a payment link if you take cards.

If no payment date was agreed with a business customer, the law sets one: 30 days after the customer received the invoice or the work, whichever is later.

A chasing timeline that works

Send each reminder to the person who pays, not only the person who ordered the work. Keep every message short: the invoice number, the amount, the due date and how to pay.

Charging interest and compensation (business customers)

If your customer is a business, the Late Payment of Commercial Debts (Interest) Act 1998 lets you add, without it being in your terms:

• interest at 8% a year above the Bank of England reference rate, from the day after the due date. The reference rate is the Bank Rate on 30 June or 31 December before the invoice fell due, and it stays fixed for that invoice;
• fixed compensation per invoice: £40 for invoices under £1,000, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more;
• reasonable costs of recovering the debt above that.

Work it out with our late payment interest calculator. Say in your final notice that you're adding it: it often prompts payment on its own.

These rights don't apply to consumers. With a homeowner, you can only charge interest or late fees if your terms said so before the work started.

When a customer disputes the invoice

Ask what exactly they dispute and in writing. If it's part of the work, ask them to pay the undisputed part now while you sort out the rest. Keep notes of calls, photos of the finished work and any signed job sheets: they settle most disagreements quickly.

The letter before action

If the final notice doesn't work, send a letter before action. It tells the customer you'll start a court claim if they don't pay by a set date, usually 14 days for a business and 30 days for an individual. Courts expect you to have sent one, and for individuals there is a set format (the Pre-Action Protocol for Debt Claims). Include the amount, what it's for, interest and compensation, and the date you'll issue a claim.

Small claims and Money Claim Online

For debts up to £10,000 in England and Wales, you can claim online through Money Claim Online on GOV.UK. There is a court fee, which you add to the claim. If the customer doesn't respond, you can ask for judgment and then enforcement. Scotland and Northern Ireland have their own procedures.

Check the current fees and steps on GOV.UK before you start: Make a court claim for money.

Stop chasing by hand

Chasing is easy to forget when you're busy on jobs. Sam's Invoices tool sends these reminders automatically for every unpaid invoice, whether you made it in Sam or in Xero, QuickBooks, FreeAgent or Sage, and adds statutory interest to the final notice for business customers.

FAQs

How soon can I chase an invoice? The day after it's due. A reminder a few days before the due date is also fine and reduces late payment.

Can I charge a late fee? To a business, yes: the fixed compensation above, plus interest. To a consumer, only if your terms said so before the work started.

What if they still don't pay? Send a letter before action, then consider a small claim. For larger or complex debts, speak to a solicitor or a debt recovery agency.

This guide is general information for UK businesses, not legal advice. For a large or disputed debt, speak to a solicitor.