How to Chase Unpaid Invoices in the UK
Unpaid invoices cost UK freelancers thousands each year. Here is a step-by-step process to recover what you are owed — without damaging client relationships.
Why Unpaid Invoices Are a Freelancer Crisis
Late payments are one of the biggest threats to freelance businesses in the UK. According to the Federation of Small Businesses, late payments contribute to around 50,000 small business closures every year. For sole traders and freelancers, a single unpaid invoice can disrupt cash flow for months.
The good news: the law is on your side, and there is a clear process you can follow.
Step 1: Send a Polite Reminder on the Due Date
On the day an invoice becomes due, send a short, professional email. Do not wait a week "to give them space." Clients are busy and invoices get lost in inboxes. A brief, friendly nudge is entirely normal and expected.
Keep it simple:
- Reference the invoice number and amount
- Confirm the payment details (bank account, sort code)
- Ask if they need anything from you to process payment
Most late payments at this stage are genuine oversights. A single email resolves them.
Step 2: Follow Up at 7 Days Overdue
If you have heard nothing by day seven, follow up again. This time be slightly more direct. State that the invoice is now seven days overdue and you would appreciate prompt payment. Attach the invoice again — accounts departments often misplace them.
At this point you can also mention that you are entitled to charge statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998, which allows you to charge 8% above the Bank of England base rate on overdue business invoices. You do not need to threaten this — simply noting it signals that you know your rights.
Step 3: Formal Demand at 14 Days Overdue
A formal letter or email demanding payment within a specified deadline (typically seven days) is your next step. This creates a paper trail and signals seriousness. Keep the tone professional, not aggressive.
Include:
- The original invoice and a new statement of account
- The total now owed including any interest accrued
- A firm payment deadline
- A statement that you will pursue the debt via the courts if payment is not received
Step 4: Charge Late Payment Interest and Compensation
Under the 1998 Act, you are automatically entitled to:
- Statutory interest at 8% above the Bank of England base rate
- Fixed compensation for the cost of recovery: £40 for debts under £1,000, £70 for debts between £1,000 and £9,999, and £100 for debts of £10,000 or more
You do not need a contract clause to claim these — they apply by statute to business-to-business debts.
Step 5: Small Claims Court
If a client still refuses to pay, the UK small claims court (Money Claim Online) is a realistic option for debts up to £10,000. Filing costs between £35 and £455 depending on the claim value, and most claimants do not need a solicitor.
Many clients pay in full when they receive a letter before action — the formal warning that you intend to sue. This is because a county court judgment (CCJ) on their record can affect their business credit rating.
Preventing Late Payments in the First Place
The best approach is prevention:
- Require a deposit (25–50%) before starting work
- Set clear payment terms — 14 or 30 days is standard
- Use automated reminders rather than relying on memory. Tools like InvoicePulse send reminder emails automatically at 7, 14, and 30 days overdue, so you never have to chase manually
- Include late payment clauses in your contract referencing the 1998 Act
Chasing invoices is uncomfortable, but being professional and systematic means most disputes resolve quickly. Know your rights, follow the process, and do not let awkwardness cost you money you have earned.