Can I charge interest on unpaid invoices?

On a commercial debt, yes, automatically. Statutory interest runs at the Bank of England base rate plus 8% — 11.75% a year at a 3.75% base rate — from the day after payment fell due, plus fixed compensation of £40, £70 or £100 by debt size. You do not need it in the contract. For a domestic customer you can only charge interest if your terms provide for it and the term is fair.

What is a letter before action?

It is the formal written demand you send before starting a court claim, and the pre-action protocol expects you to send one. It sets out what is owed, what it relates to, the interest and compensation claimed, and a deadline to pay — usually 14 days for a business debtor, 30 days for a consumer. Skipping it can cost you costs later even if you win.

How do I take a customer to court over an unpaid invoice?

For debts up to £100,000 against a single defendant you can use Money Claim Online. The fee scales with the claim and is recoverable from the debtor if you win. Claims under £10,000 are usually allocated to the small claims track, where you generally cannot recover solicitors' fees — so the maths only works if you are prepared to run it yourself.

How long do I have to chase an unpaid invoice?

Six years from the date the debt became due, under the Limitation Act 1980. That is a long stop, not a plan — the older a debt gets the less likely it is to be recovered, and evidence and memories degrade.

What evidence do I need to win a claim?

The chain that shows what was agreed and what was done: the quote or estimate and the customer's acceptance, the job sheet or worksheet, photographic proof of the completed work, the invoice, and a record of every chase you sent. Timestamped job photos are unusually persuasive in trade disputes because they answer the 'the work was not done properly' defence directly.

GUIDES

Customer Not Paying an Invoice? The UK Escalation Ladder

Q: How long does a customer have to pay an invoice?

If your contract sets a payment period, that applies — but between businesses it cannot exceed 60 days unless the longer term was expressly agreed and is not grossly unfair to you. Where nothing was agreed, the default is 30 days from the later of the customer receiving the invoice or you completing the work.

What to do when a customer will not pay, in the order that works: chase, statutory interest, letter before action, Money Claim Online. With the numbers you are legally entitled to add.

4 September 2026·7 min read read·By Love Invoicing Team

Most unpaid invoices are not disputes. They are an invoice sitting in someone’s inbox with nothing forcing a decision. The ladder below works because each rung raises the cost of ignoring you, and the early rungs cost you almost nothing.

1. Check your own position first

Before chasing, confirm the invoice is actually overdue and actually correct. What payment term was agreed? Was the invoice sent to the right person at the right address? Does it show what was agreed?

Where no term was agreed, the default between businesses is 30 days from the later of the customer receiving the invoice or you finishing the work. A term over 60 days is only enforceable if it was expressly agreed and is not grossly unfair to you.

2. Chase, in writing, with a deadline

A phone call is easy to forget and impossible to evidence. Send a short written chase that restates the invoice number, the amount, the date it fell due and a specific date you expect payment by. Keep it factual — you are building a record as much as asking for money.

3. Put the statutory interest in front of them

This is the rung most tradespeople skip, and it is the one that changes behaviour. On a commercial debt you have an automatic statutory right to interest at base rate plus 8% — 11.75% a year at the current 3.75% base rate as at 30 July 2026 — accruing daily from the day after payment was due, plus a fixed compensation sum:

£40 for a debt under £1,000
£70 for £1,000 to £9,999.99
£100 for £10,000 or more

None of this needs to be in your contract. It applies by default under the Late Payment of Commercial Debts (Interest) Act 1998 unless the contract provides its own substantial remedy.

Work out the number with the late payment interest calculatorand put the figure in the email. “The invoice is now £2,606.22 and rising by 80p a day” is a different message from “please pay when you can”. You are free to waive it later; naming it is what matters.

4. Letter before action

If the deadline passes, send a formal letter before action. The pre-action protocol expects it, and skipping it can cost you at the costs stage even where you win. It should set out:

The debt, the invoice number and what it was for
The interest and fixed compensation claimed, with the calculation
A deadline — 14 days is normal for a business, 30 for a consumer
That you will start court proceedings without further notice if it is not met

Send it by a method you can prove, and keep the proof.

5. Money Claim Online

For debts up to £100,000 against a single defendant, Money Claim Online is the route. The issue fee scales with the claim and is recoverable from the debtor if you succeed.

Be clear-eyed about the economics. Claims under £10,000 usually land on the small claims track, where you generally cannot recover solicitors’ fees — so this is worth it if you are prepared to run it yourself, and rarely worth it if you are paying someone else to.

You have six years from the date the debt fell due under the Limitation Act 1980. Do not treat that as breathing room; recovery rates fall steeply with age.

The evidence that decides it

Trade disputes are usually defended on quality, not on whether the invoice arrived: “the work was not done properly”. What answers that is the chain of records:

The quote and the customer’s acceptance of it
The job sheet showing what was done and when
Timestamped, GPS-stamped photographs of the completed work
A signature at handover
The invoice and every chase you sent

If those five live in five places, assembling them months later is its own job. If they attach to the job as it happens, the claim assembles itself.

The rung before all of these

The cheapest unpaid invoice is the one that never happens. Invoicing on the day rather than at the weekend, putting a card payment link on the invoice, and letting reminders go out on a schedule removes most of the ladder before you ever climb it — getting paid the same day covers that side.

Guidance, not legal advice. Interest rates, compensation bands and limitation periods verified against GOV.UK as at 30 July 2026. Take advice on anything contested or substantial.

Love Invoicing Team

Editorial · Love Invoicing