How to Chase Unpaid Invoices as a Tradesperson (Step by Step)

1. Prevention — getting your payment terms right upfront

The most effective way to deal with late payment is to prevent it before the job starts. Most payment disputes arise from ambiguity — the customer didn't realise payment was due immediately, or they expected a different amount.

·Quote in writing — always. Even for small jobs. A WhatsApp message with the price counts.
·State your payment terms in the quote: 'Payment due within 7 days of invoice' or 'Payment required on completion.'
·Take a deposit for any job over £500. 25–50% upfront is standard practice and filters out unreliable customers.
·For new customers, ask for 50% upfront. Legitimate customers won't object.
·Include your bank details in every quote so there are no excuses for not having them.
·Use invoicing software like TraderInvoice that sends invoices automatically as soon as you mark a job complete — faster invoicing means faster payment.

2. Step 1: Friendly reminder (day 1–3 overdue)

The vast majority of late payments are simple oversights — the customer got busy, forgot, or their accounts department has a backlog. A friendly, professional reminder resolves most of them.

Send this as soon as an invoice is 1–3 days overdue. Keep it short, polite, and assume good faith. Do not threaten or accuse at this stage.

Template: Friendly reminder email

Subject: Friendly reminder — Invoice [INV-XXXX] due [date]

Hi [Name],

I hope the [work completed] is all working well. Just a quick reminder that Invoice [INV-XXXX] for £[amount] was due on [date]. If you've already sent payment, please ignore this — if not, my bank details are below.

Thanks very much,
[Your name]
[Bank details]

The TraderInvoice automatic reminders feature can send this for you — set your reminder schedule once and it will chase invoices automatically so you can focus on the work.

3. Step 2: Formal notice (day 7–14 overdue)

If there is no response to your friendly reminder after 7 days, escalate. Your tone should now be firmer — this is a formal communication, not a chat.

At this stage, try to call the customer as well as sending an email. A direct conversation often resolves issues that email chains can drag out. If they raise a dispute about the work, take notes and follow up in writing.

Template: Formal notice email

Subject: Overdue payment — Invoice [INV-XXXX] — action required

Dear [Name],

Despite my previous reminder, Invoice [INV-XXXX] for £[amount], issued on [invoice date] and due on [due date], remains unpaid.

Please arrange payment within 7 days. If there is a query with the invoice, please contact me immediately so we can resolve it.

I have attached a copy of the invoice for your reference.

Regards,
[Your name]

4. Step 3: Letter Before Action — final demand (day 21–30 overdue)

If the formal notice does not produce payment, it is time to send a Letter Before Action (LBA). This is the final step before legal proceedings. Courts expect to see that you sent an LBA before filing a claim — skipping it can affect your costs recovery.

An LBA should:

·State the exact amount owed, including any interest accrued
·Reference the invoice number(s), dates, and original due dates
·Give a clear deadline — 7 or 14 days — for payment
·State that you will commence legal proceedings if payment is not received by the deadline
·Mention statutory interest under the Late Payment of Commercial Debts Act (for B2B debts)
·Be sent by email AND recorded post to create a clear evidence trail

Keep it professional

An LBA that contains threats, insults, or emotional language can actually weaken your legal position. Keep it factual, formal, and unemotional. It may be seen by a judge.

5. Late payment legislation and interest you can charge

UK law gives businesses strong rights when chasing commercial debts. The Late Payment of Commercial Debts (Interest) Act 1998 applies to business-to-business transactions and allows you to:

Statutory interest

8% above the Bank of England base rate, applied from the date payment became due. This runs daily until the debt is paid. You do not need to include this in your original contract — it applies automatically to B2B debts.

Fixed compensation fee

£40 for debts under £1,000 | £70 for debts between £1,000–£9,999 | £100 for debts over £10,000. This is in addition to the interest and covers your administration costs.

Reasonable debt recovery costs

If you hire a debt collector or solicitor, you can claim their reasonable costs from the debtor on top of the original debt.

Note: the Act applies to B2B debts only. For invoices to private individuals (domestic customers), you can only charge interest if it is explicitly written into your contract terms. This is a good reason to include a late payment interest clause in your standard terms.

6. Small claims court for tradespeople

For debts under £10,000 in England and Wales, the small claims court is a straightforward, cost-effective option. You do not need a solicitor.

File your claim online

Use Money Claim Online (MCOL) at gov.uk. You need the debtor's full name and address, the amount owed, and a brief description of why it is owed. Court fees range from £35 (debts up to £300) to £455 (debts up to £10,000) and are usually recoverable if you win.

The debtor is served

The court sends the claim to the defendant. They have 14 days to respond. If they do not, you can apply for a default judgment — the court rules in your favour without a hearing.

If they defend

A hearing is scheduled, usually within a few months. Bring your invoice, any written agreements, photos of completed work, and a record of all correspondence. Keep it factual and organised.

Enforcing the judgment

Winning the judgment is one thing — getting the money is another. If the debtor ignores the judgment, you can apply for a warrant of control (to seize assets), an attachment of earnings order, or a charging order on their property.

7. When to use a debt collector

A debt collection agency is worth considering when:

·You have sent an LBA and the debtor is still not responding
·The debt is large enough to warrant professional recovery but you don't have time for court proceedings
·The debtor is a business that you suspect has other outstanding debts — agencies can apply more pressure than an individual
·You want to preserve the relationship and prefer a third party to handle the chase

Most agencies charge 10–25% of the recovered amount. Only use FCA-registered agencies. For most tradesperson debts under £10,000, small claims court is cheaper and faster than an agency.

8. Invoice reminder email templates

Here are three ready-to-use templates for each stage of the chasing process:

Stage 1 — Friendly reminder (1–3 days overdue)

Subject: Quick reminder — Invoice [INV-XXXX]

Hi [Name],

Hope all is good. Just a quick note to say Invoice [INV-XXXX] for £[amount] was due on [date]. If payment is on its way, please ignore this! If not, my bank details are:

Sort code: [XX-XX-XX]
Account number: [XXXXXXXX]

Thanks for your business — really appreciate it.
[Your name]

Stage 2 — Formal notice (7–14 days overdue)

Subject: Overdue invoice — [INV-XXXX] — please respond

Dear [Name],

I'm writing to follow up on Invoice [INV-XXXX] for £[amount], issued on [invoice date] and due on [due date]. This remains unpaid.

Please arrange payment within 7 days, or contact me to discuss if there is an issue.

I have attached a copy of the invoice.

Regards,
[Your name]

Stage 3 — Letter Before Action (21–30 days overdue)

Subject: Letter Before Action — Invoice [INV-XXXX] — URGENT

Dear [Name],

LETTER BEFORE ACTION

Despite previous reminders, Invoice [INV-XXXX] for £[amount] (due [due date]) remains unpaid.

Unless payment in full is received by [date 7 days from now], I will commence proceedings in the County Court to recover the debt, plus statutory interest at 8% above base rate under the Late Payment of Commercial Debts (Interest) Act 1998, plus the fixed compensation fee of £[40/70/100], plus court costs.

This letter has been sent by email and by recorded post.

[Your name]
[Address]

Let TraderInvoice chase invoices for you

Set up automatic payment reminders and TraderInvoice will send them at the right time, every time — so you can focus on the work, not the admin.

Start Free — No Credit Card Needed

9. Frequently Asked Questions

How long do I have to chase an unpaid invoice in the UK?

In England and Wales, you have 6 years from the date the debt was due to bring a claim for an unpaid invoice (the Limitation Act 1980). In Scotland it is 5 years. However, waiting this long is almost always a mistake — the older a debt gets, the harder it is to collect. Chase invoices promptly: a friendly reminder the day they fall due, a formal notice within 14 days, and a Letter Before Action within 30 days if there is still no payment.

Can I charge interest on a late invoice?

Yes, for business-to-business debts you can charge statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998. The rate is 8% above the Bank of England base rate, applied from the date payment was due. You can also claim a fixed compensation fee: £40 for debts under £1,000, £70 for debts between £1,000 and £9,999, and £100 for debts of £10,000 or more. For consumer debts (invoices to private individuals), there is no automatic statutory interest right — you can only charge interest if it is written into your contract terms.

How do I take a customer to small claims court for an unpaid invoice?

For debts up to £10,000 in England and Wales, use Money Claim Online (MCOL) at gov.uk. You fill in the claim form, pay the court fee (which ranges from £35 to £455 depending on the amount), and the court serves the claim on the defendant. If they don't respond within 14 days, you can apply for a default judgment. If they defend, a hearing is arranged. You can usually recover court fees from the debtor if you win. In Scotland, use the Simple Procedure for debts up to £5,000. In Northern Ireland, use the Small Claims Court for debts up to £3,000.

When should I use a debt collection agency for an unpaid invoice?

Consider a debt collection agency when: you have exhausted your own chasing process, the customer is not responding to formal notices, or the debt is too large to write off but not worth the time of small claims court. Most agencies charge a percentage of the recovered amount (typically 10–25%) or a flat fee. Some work on a no-win-no-fee basis. The FCA regulates debt collection in the UK, so use a registered agency. For debts under £10,000, small claims court is usually cheaper and just as effective if you are prepared to do it yourself.

What is a Letter Before Action and how do I write one?

A Letter Before Action (LBA) is a formal notice that tells the debtor you intend to take legal action if they do not pay within a specified time (usually 7–14 days). It should include: the amount owed, the invoice number and date, the original due date, any interest that has accrued, a clear deadline for payment, and a statement that you will commence legal proceedings if payment is not received. Keep it professional and factual — this document may be seen by a judge. You can send an LBA by email, but also by recorded post to create a paper trail.