How to Chase an Unpaid Invoice in the UK in 2026: 5 Templates, 8% Plus Base Rate and Small Claims (Money Claim Online, Jobbit)

The kitchen is fitted, the customer posted photos of it, and the £3,400 invoice is 47 days overdue. You have sent two "just checking" emails and had one "will sort it this week". You do not want to be the tradesperson who sues a customer, and you cannot afford to be the one who writes off a month's work. To chase an unpaid invoice well is a sequence, not a confrontation, and most of it is paperwork that takes minutes once you know the order.

The scale is national. Research for the Department for Business and Trade and the Small Business Commissioner, published in July 2025, found UK businesses owed about £26 billion in late payments at any one time, an average of £17,000 per affected business, costing the economy about £11 billion a year and closing roughly 14,000 businesses annually, 38 a day, with the typical affected firm spending 86 hours a year chasing. The law is on your side more than most people realise: interest at 8% above the Bank of England base rate, a fixed compensation sum per invoice, and a court route that costs £35 to £455 for claims up to £10,000. This guide gives the ladder, the five templates, the maths, and the one chat that runs it for you.

Before you chase: four checks that take ten minutes

• Did the invoice arrive, and was it right? Confirm the email address, the legal name of the customer, any purchase order number they asked for, and that the VAT treatment matches what you agreed. A wrong name on an invoice is the most common honest reason for non-payment and the most common excuse.
• What are the payment terms? If the invoice says 14 days, the clock started then. If nothing was agreed, the law gives 30 days from the invoice or the delivery, whichever is later, for business customers.
• Who exactly owes you? A limited company, a sole trader or a private individual. The next sections show why this changes the letters, the timings and the thresholds. Public bodies are expected to pay within 30 days and statutory interest applies to them too.
• What does the contract say about interest? If your terms set an interest rate and it is a real remedy, that rate applies. If they say nothing, statutory interest applies to business debts automatically; you do not need to have mentioned it.

Write down the due date, the amount and the customer type. Everything below hangs off those three facts.

The chasing ladder: what to send and when

Most invoices are paid by day 14. The ladder exists so that the ones that are not do not drift into month three, and so that if you ever need a judge, every step is on the record.

The five templates (copy, personalise, send)

Template 1: friendly reminder, day 1

Subject: Invoice 1042, £3,400, due yesterday Hi Sarah, a quick note that invoice 1042 for the kitchen fitting fell due on 14 September and I have not seen the payment yet. It may well be in hand; if so, please ignore this. The invoice is attached again with the bank details. Thanks, Dan.

Template 2: second reminder, day 7

Subject: Invoice 1042 now a week overdue Hi Sarah, invoice 1042 for £3,400 was due on 14 September and is now a week overdue. If there is a problem with the work or the invoice, please tell me so I can put it right. Otherwise, could you arrange payment this week to the account on the invoice (sort code 00-00-00, account 12345678, reference 1042)? Kind regards, Dan.

Template 3: overdue notice, day 14

Subject: Invoice 1042: overdue, statutory interest now applies Dear Sarah, invoice 1042 for £3,400, due on 14 September, remains unpaid 14 days after the due date. Under the Late Payment of Commercial Debts (Interest) Act 1998, statutory interest at 8% above the Bank of England base rate (currently 11.75% a year) accrues from the due date, together with fixed compensation of £70 for a debt of this size. I would much rather not add either. Please pay the invoice total within seven days, or contact me today to agree a date. Regards, Dan.

Template 4: final notice, day 21

Subject: Final notice: invoice 1042, £3,400 plus interest Dear Sarah, despite my reminders of 15 and 21 September and our call on 24 September, invoice 1042 remains unpaid. The sum now due is £3,400 plus statutory interest of £24.48 to today's date (21 days at £1.09 a day) plus £70 fixed compensation, a total of £3,494.48, with interest continuing at £1.09 a day. If payment is not received within seven days I will send a formal letter before action, after which I will issue a claim in the County Court for the debt, interest, compensation and the court fee. Regards, Dan.

Template 5: letter before action, day 30

Subject: Letter before action: invoice 1042 Dear Sarah, I refer to invoice 1042 dated 31 August for £3,400 for the supply and fitting of a kitchen at 12 Elm Road, due on 14 September and unpaid. The sum now claimed is £3,400 plus statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 of £34.28 to today's date, continuing at £1.09 a day, plus £70 fixed compensation, a total of £3,504.28. A statement of account is enclosed. Unless payment in full is received within 14 days of the date of this letter, I intend to issue proceedings in the County Court without further notice, and I will seek the court fee and any further costs allowed. If you dispute any part of this, please say which part and why within the same period. Yours sincerely, Dan.

For a private individual or a sole trader, Template 5 becomes the Letter of Claim required by the Pre-Action Protocol for Debt Claims: sent by post, giving 30 days rather than 14, enclosing the protocol's Information Sheet and Reply Form, stating how the debt arose, the interest claimed and how to pay, and offering to discuss a payment plan. A judge will expect to see it before a claim is issued.

Interest and compensation: the maths for a £3,400 invoice

Statutory interest on a business-to-business debt is 8% a year above the Bank of England base rate, using the base rate on 30 June or 31 December that falls before the due date. The Bank held base rate at 3.75% on 17 September 2026, so the statutory rate for invoices due in the second half of 2026 is 11.75%. The sum is simple:

• Daily interest = £3,400 × 11.75% ÷ 365 = £1.09 a day.
• At 47 days overdue = £51.44.
• Fixed compensation = £70, because the debt is between £1,000 and £9,999.99. It is £40 for debts under £1,000 and £100 for £10,000 and above, once per invoice.
• Total now due = £3,521.44, plus any reasonable recovery costs above the fixed sum, such as a debt collector's fee, which the Act also allows you to claim.

The interest runs until the day of payment, you do not need to have threatened it in advance, and you can add it to an invoice that is already overdue. Two limits: it applies only when both parties are acting as businesses, so a private customer owes you only what your contract says, and if your own terms set a different rate that provides a real remedy, your terms apply instead. Parliament is currently taking the Small Business Protections (Late Payments) Bill through its stages, announced in the King's Speech of 13 May 2026; it would cap payment terms at 60 days, require customers to confirm or dispute an invoice within 30 days, make the 8% interest mandatory, and give the Small Business Commissioner the power to fine persistent late payers. Until it passes, the 1998 Act is the rulebook.

Who you are chasing changes the rules

A limited company

Check Companies House first: is it still active, who are the directors, are the accounts overdue? Address the letter before action to the registered office and copy a director by name. A company that owes you £750 or more can be served a statutory demand, which gives it 21 days to pay before a winding-up petition becomes possible; the threat is powerful and the form is free, but do not use it for a disputed debt, because the court will not allow insolvency as a debt-collection shortcut. There is no fixed pre-action protocol for company debtors, but the court expects a clear letter and a reasonable period, and 14 days is normal.

A sole trader

Legally an individual, so the Pre-Action Protocol for Debt Claims applies: a Letter of Claim by post, 30 days to respond, the Information Sheet and Reply Form enclosed, and time allowed if they ask for documents or advice. Statutory interest still applies because they are a business. The bankruptcy threshold is £5,000, so a statutory demand is only relevant above that.

A private customer

A household that owes you for a kitchen or a garden is a consumer. The 1998 Act does not apply, so you can charge only the interest your terms set out, and your terms must have been shown before the work started to count. The Pre-Action Protocol for Debt Claims applies in full, including the 30 days. Keep the tone human throughout; a judge reads the letters.

A much bigger business

If you are small and the debtor is large, the Small Business Commissioner takes complaints free of charge and will contact the debtor on your behalf; its research and its coming powers to fine are aimed precisely at this case. The Fair Payment Code names businesses that commit to pay small suppliers on time, and a signatory that breaks its promise can be reported.

Money Claim Online: fees, timeline and what happens after judgment

Money Claim Online is the court service's website for claims up to £100,000 in England and Wales. You enter who owes what, why, the interest and the compensation, pay the fee by card, and the claim is served on the debtor. The fee depends on the amount claimed:

• Up to £300: £35. Up to £500: £50. Up to £1,000: £70. Up to £1,500: £80. Up to £3,000: £115. Up to £5,000: £205. Up to £10,000: £455.
• Over £10,000: 5% of the claim.

The fee is added to the claim, so a debtor who pays after judgment pays it too. Claims under £10,000 are allocated to the small claims track, where you do not need a solicitor and the usual rule is that each side pays its own legal costs, and the court's free Small Claims Mediation Service, an hour on the phone, settles many of them before a hearing. If the debtor does not respond within the time allowed, you can ask for judgment in default online. Judgment is not money: enforcement is a separate step with its own fees, through court bailiffs, an attachment of earnings order, a third-party debt order against a bank account, or a charging order against property. A claim is worth issuing when the debtor has assets or income and the debt is clear, and worth thinking twice about when the company has stopped trading.

How an AI agent runs the whole sequence

ChatGPT, Claude, Gemini, Microsoft Copilot, Manus and Meta's Muse will all draft a polite reminder or a letter before action, and they draft them well. Paid invoicing apps such as Xero, QuickBooks and FreshBooks send automatic reminders on their monthly plans (FreshBooks Lite is £16 a month). Where Jobbit differs is that the invoice, the ladder, the letters, the maths and the reminders come out of one chat as real files and real scheduled jobs:

• The invoice that gets paid first. The free invoice tool writes a numbered PDF and an editable DOCX from one sentence, with VAT, due date and late-payment wording when you ask for them. How to Write an Invoice That Gets Paid covers the nine fields and the terms.
• The ladder with real dates. Give the agent the invoice and it returns the schedule above with the actual calendar dates, the customer type and the right template for each step.
• Letters in your voice, drafted from the five templates, with the amounts, the dates of every previous contact and the interest to the day already filled in.
• The interest, daily, and the compensation, worked out from the base rate that applies, and added to a reissued invoice.
• The letter of claim done properly for an individual or sole trader, with the protocol's documents, and the particulars of claim written for Money Claim Online if it comes to that.
• Reminders that send themselves. Ask for the sequence to be scheduled and the agent sends each step on the day, pausing when the money arrives.
• A record a judge can read. Every message, call note and letter in one log, exportable as a PDF bundle.
• A person when it needs one. For a disputed or large debt, Jobbit can bring in a UK bookkeeper or a debt recovery specialist from the same place, with payment held in escrow until the work is done.

Linda, 61, left a finance department to run a bookkeeping practice from home. Her first message to the agent was the overdue £3,400 invoice above. The second was the reminder sequence, scheduled. The third asked for the terms on every future invoice to be tightened: 14 days, interest clause, deposit on jobs over £1,000. The chasing was the smallest thing the agent did; the terms are what stopped it happening again. Whether a paid invoicing app is worth it at all is the question Do You Need Invoicing Software? answers with the ten-year maths.

Protect the next invoice: terms that get you paid

• A deposit on anything over a few hundred pounds, and staged payments on long jobs, so the final invoice is never the whole job.
• Seven or 14 days, not 30, unless the customer is a large business with a fixed payment run.
• An interest clause that quotes the Act, so nobody is surprised, and a line that compensation and recovery costs will be claimed.
• The customer's legal name and any PO number on the invoice, checked before you send it.
• Bank details and a pay-by-link option on the invoice itself, so paying takes one click.
• Invoice on the day you finish, with the photos of the finished job attached.
• A credit check for new business customers: Companies House filings and whether the accounts are late tell you a great deal for free.
• Retention of title on goods you supply, so unpaid materials stay yours until paid for.
• Stop-work rights in your terms for staged projects, so an unpaid stage pauses the next one.

Each of these is one sentence to the agent when it writes the invoice. The difference between a firm that is owed £17,000 and one that is owed nothing is usually the paperwork at the start, not the letters at the end. If you are also working out whether you count as a sole trader for all of this, Sole Trader vs Self-Employed in 2026 sets the terms straight.

A 30-day plan for the invoice that is overdue right now

• Today: run the four checks, write down the due date, the amount and the customer type, and send Template 1 or 2 depending on how late it already is.
• Day 3: phone. Ask one question: is there a problem with the work or the invoice? Note the answer and the date.
• Day 7: Template 3 with the interest line, and reissue the invoice with the interest and compensation shown.
• Day 14: Template 4, by email and by post, with the daily interest stated.
• Day 21: Template 5, or the protocol Letter of Claim for an individual, by post, with the statement of account.
• Day 30 onwards: the claim on Money Claim Online if the debt is clear and the debtor can pay, or a statutory demand for a company debt of £750 or more, or a complaint to the Small Business Commissioner for a large debtor.
• Every step: one message to the agent, which drafts, dates, calculates and files it.

Frequently asked questions

How long should I wait before chasing an unpaid invoice?

Send a friendly reminder the day after the due date, a second a week later, and make a phone call by day 10. Waiting a month "to be polite" costs you a month of cash and tells the customer that your due dates are optional. The ladder above is firm without being unfriendly.

How much interest can I charge on an unpaid invoice in the UK?

For a debt between two businesses, statutory interest of 8% above the Bank of England base rate, which is 11.75% a year with base rate at 3.75% in October 2026, from the day after the due date, plus fixed compensation of £40, £70 or £100 per invoice depending on the amount. For a private customer, only the interest your terms stated before the work began.

What is a letter before action and do I need a solicitor?

It is the formal letter that says you will issue a court claim unless the debt is paid within a stated period, with the full amount, the interest and how it arose. You do not need a solicitor to write or send it, and for a claim under £10,000 you will not normally need one in court either. For an individual or sole trader it must follow the Pre-Action Protocol for Debt Claims and give 30 days.

Can I take a client to small claims court for an unpaid invoice?

Yes, through Money Claim Online for claims up to £100,000, with claims under £10,000 on the small claims track. The fee is £35 to £455 up to £10,000 and is added to what the debtor owes. You will usually be offered free telephone mediation first, and if the debtor ignores the claim you can ask for judgment in default online.

What if the client says they never received the invoice?

Send it again immediately by email and post, ask them to confirm receipt the same day, and keep the terms as they were: the due date runs from the original invoice if it was sent correctly. Many "never received it" replies end with a payment that week; if yours does not, continue the ladder from the step you were on.

Can I charge a late payment fee to a private customer?

Only if your terms set out the fee or interest and the customer saw them before the work started, and only if the amount is reasonable. The statutory 8% plus base rate and the fixed compensation apply to business customers only. For households, firm reminders, a clear letter of claim with 30 days, and a small claim are the tools.

What is the fastest way to set up the whole chasing sequence?

One chat on Jobbit: ask the free invoice tool for the invoice, then in the same chat for the reminder ladder with real dates, the letters in your voice, the interest to the day and the scheduled reminders. The Free plan at jobbit.uk gives 100 credits a day with no card, which covers the whole sequence for an invoice like this one.