TradeLinkers
Send a friendly reminder when the invoice falls due, firmer ones at set intervals, then a final letter before action. If the customer is a business, the Late Payment Act lets you add statutory interest at 8% above the Bank of England base rate, plus £40 to £100 compensation. If that fails, you can make a court claim.
When is an invoice actually late?
An invoice is late the day after its due date. If you never agreed one, gov.uk says the customer must pay within 30 days of getting your invoice or the work. That’s why every invoice should carry a real date: “Due by 14 November 2026”.
For business customers, gov.uk adds that agreed payment terms should usually be no more than 60 days, unless a longer period is fair to both sides. If nothing was agreed, payment is late 30 days after the customer gets the invoice, or 30 days after you finished the work if that’s later.
What’s a sensible chasing timeline?
Chase on fixed days, every time, so it never feels personal. Start with a polite reminder the day after the due date. Each step after that gets firmer, ending with a formal letter before action. Court comes last, if at all.
There’s no legal timetable for reminders. This is one practical rhythm:
| When | What to send |
|---|---|
| Day the work is done | The invoice, with a due date, bank details and the invoice number as the reference |
| 1 day after the due date | Friendly reminder: “Just a nudge, INV-0042 for £565 was due yesterday” with the invoice attached again |
| 7 days overdue | Second reminder by email, plus a call or message to check there’s no problem with the work |
| 14 days overdue | Firm reminder. For a business customer, say you’ll add statutory interest and compensation |
| 30 days overdue | Final letter before action, giving a deadline (see below) |
| After that deadline | Decide whether to make a court claim |
A few things make this work better:
- Check they got it. Invoice emails can land in spam or go to an old address.
- Ask if anything’s wrong. If they’re unhappy with the work, deal with that first. The court’s pre-action rules expect both sides to try to settle a dispute before anyone makes a claim.
- Make paying easy. Repeat the bank details and reference in every reminder.
- Keep it calm and keep copies. Your emails become evidence if it goes further.
- Don’t harass. Under section 40 of the Administration of Justice Act 1970 (England and Wales), harassing someone with demands for payment that are calculated to cause alarm, distress or humiliation is a criminal offence.
Can you charge interest on a late invoice?
Yes, if your customer is a business. The Late Payment of Commercial Debts (Interest) Act 1998 lets you claim statutory interest at 8% a year above the Bank of England base rate, plus a fixed sum of £40, £70 or £100. It doesn’t apply to homeowners.
The interest rate. The base rate that counts is the one in force on 30 June (for interest that starts running between 1 July and 31 December) or 31 December (for interest that starts between 1 January and 30 June). The Bank of England’s Bank Rate has been 3.75% since 18 December 2025. That makes statutory interest 11.75% a year for debts where interest started running at any point in 2026. Check the Bank of England’s site for later dates.
The fixed compensation, set by section 5A of the Act:
| Size of the debt | Fixed sum you can claim |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
Gov.uk says you can only charge the fixed sum once for each payment. If your reasonable costs of recovering the debt are higher, the Act lets you claim the difference as well.
Two catches. You can’t claim statutory interest if your contract sets a different interest rate. And gov.uk says to send a new invoice if you decide to add interest.
Worked example (made-up figures). A building firm owes you £2,400, due on 30 September 2026, and pays 45 days late.
- Yearly interest: £2,400 × 11.75% = £282.00
- Daily interest: £282.00 ÷ 365 = about £0.77
- Interest for 45 days: about £34.77
- Fixed compensation for a £1,000 to £9,999.99 debt: £70
- Total you can add: about £104.77
The late payment calculator works this out from the due date.
What about homeowners and other consumers?
The Late Payment Act only covers contracts where both sides are acting in the course of business, so there’s no statutory interest or fixed compensation to add for a homeowner. Keep chasing politely, offer a payment plan if they’re struggling, and sort out any complaint about the work first.
If it does reach court, gov.uk says interest on other types of debt is usually claimed at 8% a year, worked out from the date the debt became overdue.
What should a letter before action say?
Before you go to court, you’re expected to write one final, formal letter. For a debt owed by an individual or sole trader, the Pre-Action Protocol for Debt Claims sets out what that letter must contain and gives them 30 days to reply.
If the customer is an individual or a sole trader, the protocol says your Letter of Claim should:
- state the amount owed and whether interest or other charges are still being added
- say what was agreed, when and where (and if it was agreed verbally, who agreed it and what was said)
- explain how to pay and how to get in touch to discuss payment
- give the address for the reply
- enclose a statement of account, the protocol’s Information Sheet and Reply Form, and a Financial Statement form
Date it at the top, post it that day (you can email it as well) and wait 30 days from that date before starting a claim. If they reply that they’re getting debt advice, give them reasonable time.
If the customer is a limited company, the debt protocol doesn’t apply. The court’s Practice Direction on Pre-Action Conduct expects a letter with concise details of the claim and how the amount is worked out, and a reply within a reasonable time, which it says is 14 days in a straightforward case.
The court can penalise you on costs or interest if you skip these steps. And if the customer is disputing the work itself, not just failing to pay, a different protocol for construction disputes may apply, so get advice before you issue.
How do you make a small claim?
In England and Wales you start from the gov.uk page “Make a court claim for money”. If you know the exact amount, you can usually claim online, and you pay a court fee based on how much you’re claiming, including interest. Scotland and Northern Ireland have their own processes.
Gov.uk says you can claim online unless, for example, you don’t know the exact amount, you’re claiming against 3 or more people or organisations, or either side doesn’t have an address in England or Wales. Court fees as listed on gov.uk in October 2026:
| Amount claimed | Court fee |
|---|---|
| Up to £300 | £35 |
| £300.01 to £500 | £50 |
| £500.01 to £1,000 | £70 |
| £1,000.01 to £1,500 | £80 |
| £1,500.01 to £3,000 | £115 |
| £3,000.01 to £5,000 | £205 |
| £5,000.01 to £10,000 | £455 |
If the customer disputes a claim of £10,000 or less, you’ll be told to attend free mediation by phone, arranged by the court. If they don’t respond at all, you can ask the court for judgment, and then for enforcement, such as bailiffs or deductions from wages. Those steps carry further fees, which you may be able to recover if you win.
How does TradeLinkers help you chase?
TradeLinkers puts a due date on every invoice, and the Android dashboard shows what’s outstanding and overdue. You can see when a customer has opened the invoice email (“Viewed”). Pressing Send payment reminder emails the customer a reminder. It’s manual, so you decide when.
Part payments are recorded and the balance shows on the PDF. TradeLinkers doesn’t send reminders automatically or add interest for you, so use the late payment calculator for the figures. More on the invoice app.
Sources
- GOV.UK: Late commercial payments, charging interest and debt recovery
- Late Payment of Commercial Debts (Interest) Act 1998, section 5A
- Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, article 4
- Bank of England: Bank Rate history
- GOV.UK: Payment obligations
- GOV.UK: Make a court claim for money
- Pre-Action Protocol for Debt Claims
- Practice Direction: Pre-Action Conduct and Protocols
- Administration of Justice Act 1970, section 40
This guide is general information for UK sole traders and small firms, not tax or legal advice. Rules change; check the source or ask an accountant for your own situation.
