--- title: "How to Chase an Unpaid Invoice (UK): A Step-by-Step Guide" date: 2026-06-06T19:51:57.109+00:00 url: https://paymentcheck.co.uk/blog/debt-collection/how-to-chase-an-unpaid-invoice-uk description: "A practical UK guide to chasing unpaid invoices: reminders, warning letters, statutory interest, letter before action and small claims." category: "Debt Collection" --- # How to Chase an Unpaid Invoice (UK): A Step-by-Step Guide An overdue invoice ties up cash you have already earned. The good news is that UK law is firmly on the side of the supplier, and a calm, structured chasing process recovers most debts long before they ever reach a courtroom. This guide walks you through every stage, from a friendly nudge to a formal small claims action, so you know exactly what to do and when to escalate. ## When is an invoice officially overdue? An invoice is overdue the day after its agreed payment date. If you did not set explicit terms, the Late Payment of Commercial Debts (Interest) Act 1998 treats payment as due 30 days after the customer receives the invoice (or 30 days after the goods or services were supplied, whichever is later). Before you assume the worst, check the obvious: - Was the invoice actually delivered to the right person and address? - Does it contain a clear due date, your payment details and a PO number if one was required? - Has a partial payment or credit note been overlooked? Clearing up an admin error early avoids souring a customer relationship over a misunderstanding. Once you have confirmed the payment is genuinely late, work through the steps below. ## Step 1: Send a polite payment reminder Most late payments are caused by disorganisation, not malice. Your first contact should assume good faith. A short, friendly email a day or two after the due date is usually enough. Keep it brief: reference the invoice number, the amount, the original due date, and re-attach a copy. A simple line such as "This invoice may have slipped through, so I wanted to flag it" gives the customer an easy, face-saving route to pay. A quick phone call alongside the email often works even better. People respond faster to a human voice, and you can confirm the invoice was received and ask when payment will be made. ## Step 2: Send a firmer follow-up If the polite reminder goes unanswered for around a week, switch to a firmer tone while remaining professional. State clearly that the invoice is now overdue, repeat the amount and ask for a specific payment date in reply. This is the right moment to set expectations: mention that, under UK law, you are entitled to charge statutory interest and a fixed compensation fee on late commercial payments. You do not have to apply them yet, but flagging the possibility often prompts action. Always keep copies of every email and note every phone call, as this paper trail matters if the dispute escalates. ## Step 3: Issue a formal warning letter Still no payment after two reminders? Send a formal warning, sometimes called a final reminder, by email and ideally by post too. It should: - Clearly state the total amount outstanding. - Give a firm deadline, typically 7 days. - Confirm you will now add statutory interest and the fixed compensation fee. - Warn that you will take further action, including a formal claim, if the deadline passes. This letter signals that you are serious and moving towards legal recovery. Many customers who have been ignoring softer reminders pay at this stage to avoid extra costs and hassle. ## What interest and compensation can you legally charge? This is where UK suppliers have real leverage. Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge two things on a late business-to-business invoice without needing them written into your contract. ### How much statutory interest can you add? You can charge **statutory interest of 8% plus the Bank of England base rate**. With the base rate currently at 3.75%, that is a total of **11.75% per year** on the overdue amount. Interest accrues daily from the day after payment was due until the day you are paid. Working out the exact figure by hand is fiddly, so use our [free late invoice calculator](/free-late-invoice-calculator) to get the precise interest owed in seconds. If you want to understand the maths behind it, our guide on [how to calculate interest on overdue invoices](/blog/interest-and-fees/how-to-calculate-interest-on-overdue-invoices) breaks it down step by step. ### How much fixed compensation can you claim? On top of interest, you can claim a one-off fixed compensation sum to cover the cost of recovering the debt. The amount depends on the size of the invoice: - **£40** for debts under £1,000 - **£70** for debts of £1,000 up to £9,999.99 - **£100** for debts of £10,000 or more If your actual recovery costs (for example, a debt collection agency or solicitor's fee) exceed the fixed sum, you can claim the reasonable difference too. ### Should you actually charge it? That is a commercial judgement. With a long-standing client who has simply slipped up, you might waive the interest as a goodwill gesture once they pay. With a persistent late payer, applying the full statutory charge is entirely fair and reminds them that prompt payment is cheaper than delay. ## Step 4: Send a Letter Before Action If the warning deadline passes without payment, the next step is a **Letter Before Action** (also called a Letter Before Claim). This is a formal, legally significant document that tells the debtor you intend to start court proceedings unless they pay. A Letter Before Action should include: - The full amount owed, including statutory interest and compensation. - A clear breakdown of how that total is calculated. - A final deadline to pay, usually 14 days. - A statement that you will issue a county court claim if payment is not received. Send it by post and email, and keep proof of delivery. Courts expect you to have followed this pre-action step, so skipping it can count against you later. To save time, our [late payment notice tool](/#send-notice) helps you generate a professional notice with the correct interest and compensation already worked out. A properly worded Letter Before Action is often the single most effective step in the whole process. The threat of court, county court judgments and added costs persuades many reluctant payers to settle immediately. ## Step 5: Escalate to small claims or debt collection If the Letter Before Action deadline expires and you still have not been paid, you have two main routes. ### Should you use the small claims court? For most unpaid invoices, the **Money Claim Online** service (part of the small claims track for debts up to £10,000) is the practical option. You pay a court fee based on the claim size, submit the details online, and if the debtor does not respond or defend successfully, you can obtain a county court judgment (CCJ) against them. A CCJ damages the debtor's credit rating, which is a powerful incentive to pay. If they still refuse, you can take enforcement action such as instructing bailiffs or applying for an attachment of earnings. ### Should you use a debt collection agency? If you would rather not handle the process yourself, a reputable debt collection agency can chase the debt on your behalf, usually for a percentage of what they recover. This frees up your time and adds professional pressure, though it reduces your net recovery. For larger or more complex debts, a solicitor specialising in commercial debt recovery may be worthwhile. For a wider look at your options when a client digs in, read our companion guide on [what to do when a company won't pay your invoice](/blog/debt-collection/what-to-do-when-a-company-wont-pay-your-invoice). ## How can you avoid late payments in the first place? Chasing is far easier to prevent than to do. A few habits dramatically reduce the number of invoices that go overdue: - **Agree clear payment terms in writing** before you start work, including the due date and your right to charge interest. - **Invoice promptly and accurately**, with all the details the customer needs to pay without querying. - **Run credit checks on new customers.** Before extending credit, look up a prospective client on [company search](/company-search) to see how promptly they actually pay their suppliers. A poor payment record is an early warning to ask for a deposit or upfront payment. - **Set automated reminders** so nothing slips through the cracks. ## Frequently asked questions ### Can I charge interest on a late invoice if it isn't in my contract? Yes. For business-to-business transactions, the Late Payment of Commercial Debts (Interest) Act 1998 gives you a statutory right to interest and fixed compensation even if your contract is silent on the matter. ### How long do I have to chase an unpaid invoice in the UK? For most simple contract debts in England and Wales, you have six years from the date the debt became due to start court action. Even so, the sooner you chase, the more likely you are to recover the money, as the trail goes cold and the debtor's circumstances can change. ### Is the chasing process different for consumers (B2C)? The statutory interest and compensation under the 1998 Act apply to commercial (business-to-business) debts. When chasing a private consumer, you can still claim interest, but the rules differ, so the steps above are aimed primarily at B2B invoices. ## The bottom line Chasing an unpaid invoice works best as a steady escalation: a friendly reminder, a firmer follow-up, a formal warning, then statutory interest, a Letter Before Action and finally court or a collection agency. Most debts are settled long before the final stages once the customer realises you are organised and serious. Use the [late invoice calculator](/free-late-invoice-calculator) to know exactly what you are owed, and the [late payment notice tool](/#send-notice) to put it in writing.