Getting paid
How to chase an unpaid invoice as a builder
Most late payments are not a fight, they are a process. Escalate calmly, know when statutory interest applies, and understand the county court route for the times a nudge is not enough.
Short answer
Chase a late payment in stages: a friendly nudge a few days after the due date, a firm written email at a week, a calm phone call at two weeks, then a letter before action. A business client owes statutory interest and fixed compensation for late payment under the Late Payment of Commercial Debts (Interest) Act 1998. A homeowner client does not, so check your own payment terms and follow the separate Pre-Action Protocol for Debt Claims before any court action. Money claims worth up to £10,000 in England and Wales normally go through the small claims track.
Quick check
- Payment terms and a deposit are written into the quote before work starts
- A friendly nudge goes out a few days after the due date
- A firm written email follows at about a week overdue
- A calm phone call follows at about two weeks overdue
- A letter before action sets out the debt and a clear deadline
- Statutory interest and fixed compensation apply to business clients, not homeowners
- An individual client gets a Pre-Action Protocol letter of claim before any court claim
- Money claims up to £10,000 in England and Wales go through the small claims track
- A solicitor is a considered escalation, not the first move
1. Prevent the problem before you invoice
The cheapest way to chase a payment is to not need to. Put a deposit, stage payments tied to progress and a stated payment period into the quote itself, not into a side conversation. Our guides on what to include in a builder's quote and on the difference between a quote and an estimate cover the rest of the paperwork that makes payment terms stick.
- A deposit before work starts, sized to the job
- Stage payments tied to a recognisable point in the job, not a date on the calendar
- A stated payment period, for example 7 or 14 days from invoice
- Bank details and accepted payment methods shown on the quote and the invoice
- What happens if payment is late, stated in plain words
2. A ladder that escalates without burning the relationship
Each stage gives the client a fair chance to sort it out before the tone changes.
| Stage | When | Tone |
|---|---|---|
| Friendly nudge | 3 to 5 days after the due date | Casual, assumes an oversight |
| Formal email | About a week overdue | Firm, professional, on the record |
| Phone call | About two weeks overdue | Direct, calm, listens for a reason |
| Letter before action | Three to four weeks overdue | Formal, states a fixed deadline |
| Statutory interest and court claim | After the deadline in the letter passes | Administrative, no further negotiation |
3. The friendly nudge (day 3 to 5)
Keep this short and assume it is an oversight. Send it by the channel you normally use with that client.
Worked example
Friendly nudge template
Hi [client name], hope you're settling into the finished [job, for example “extension”]. Just flagging that invoice [number] for £[amount] was due on [date] and I can't see it's landed yet. Could you let me know if it's gone through, or if there's a hold-up your end? Thanks, [your name]
4. The formal email (about a week overdue)
This is the first written record that treats the payment as overdue rather than assumed forgotten. Keep it factual and give a new date.
Worked example
One-week formal email template
Subject: Invoice [number], now 7 days overdue. Hi [client name], I'm following up on invoice [number] for £[amount], issued on [date] with payment due on [due date]. This is now 7 days overdue. Please arrange payment by [new date], or let me know when I can expect it. If there's a problem with the invoice or the work, tell me and I'll sort it. Bank details are on the invoice. Thanks, [your name]
5. The phone call (about two weeks overdue)
A call gets more information than another message and shows the debt is now a priority. Confirm whatever you agree in writing straight afterwards.
Worked example
Two-week phone call notes
Open plainly: “I'm calling about invoice [number], due on [date], still showing as unpaid.” State the amount and the date. Ask directly: “Is there a reason it hasn't gone through?” Listen before you propose anything. If they agree a date, confirm it there and then. If they dispute the work or the price, note exactly what they say and deal with that separately from the payment date. Close with a clear next step: “I'll expect payment by [date], and I'll follow up in writing to confirm what we've agreed.” Then send a short email the same day repeating the agreed date.
6. The letter before action
A letter before action is your last written step before court. Its job is to set out the debt clearly and give a fair, final deadline.
State the invoice number, the amount, the work it covers and the date it fell due. Give a clear deadline, usually 14 days, and say plainly what happens if it passes: statutory interest and compensation where they apply, and a county court money claim.
If your client is an individual rather than a limited company, for example a homeowner rather than a business, the Ministry of Justice Pre-Action Protocol for Debt Claims applies and changes the timetable. Your letter of claim needs to set out the debt, how it arose, and any interest or charges, and it should come with a reply form and a financial statement for the debtor to complete. You cannot normally start court proceedings until at least 30 days after the date on the letter, and longer if the client asks for debt advice or copies of documents.
Worked example
Letter before action template
Dear [client name], RE: Unpaid invoice [number], £[amount]. Invoice [number] for [brief description of the work] was issued on [date] and became due on [due date]. Despite my messages on [dates], this remains unpaid. I am writing to give formal notice that unless payment of £[amount], plus interest, is received by [date, 14 days from this letter], I will pursue the debt through the county court, which may add interest, fixed compensation and further costs. Please contact me before that date if you dispute the invoice or need to discuss payment. Yours sincerely, [your name]
Individual clients get more time, not less
A homeowner client is entitled to the Pre-Action Protocol timetable. Skipping it will not stop a claim, but a court can take non-compliance into account when it decides case management and costs. Build the extra weeks into your plan rather than treating the protocol as optional paperwork.
7. Statutory interest and compensation, if your client is a business
Under the Late Payment of Commercial Debts (Interest) Act 1998, a business owed money by another business can charge statutory interest of 8% plus the Bank of England base rate, calculated daily on the outstanding amount from the day after payment was due. Check the current base rate at bankofengland.co.uk, since it changes.
You can also claim fixed compensation for the cost of recovering the debt, on top of the interest, without having to prove what chasing it actually cost you.
| Size of debt | Fixed compensation |
|---|---|
| Up to £999.99 | £40 |
| £1,000 to £9,999.99 | £70 |
| £10,000 or more | £100 |
This does not apply to homeowner clients
The 1998 Act covers business-to-business debts only. If your client is a private individual having work done on their home, statutory interest and fixed compensation do not apply. You can still charge interest if your quote or terms set out a rate in advance. If it ends up in court with no agreed rate, the usual rate the court applies is a flat 8% a year, not base rate plus 8%.
8. Making a money claim if it still is not paid
If the deadline in your letter before action passes, you can make a county court claim for the debt, interest and, for a business client, the fixed compensation above. Claims can be made online through the government money claims service or by post using form N1.
In England and Wales, claims worth up to £10,000 are normally allocated to the small claims track, the simplest and lowest-cost route, where you will not usually be ordered to pay the other side’s legal costs even if you lose. Larger claims move to the fast track or beyond, where the process and cost exposure are more involved.
Scotland and Northern Ireland run separate systems, the simple procedure in the Sheriff Court and the small claims process in Northern Ireland, each with their own limits and forms.
- 1
Work out the total
Add the unpaid invoice, any interest accrued to date and, for a business client, the fixed compensation.
- 2
Choose your route
Claim online through the government money claims service for the quickest route, or post form N1 if you cannot claim online.
- 3
Pay the court fee
Fees are banded by claim value and are normally added to your claim, so the fee is recoverable if you win.
- 4
Respond to what happens next
The debtor has a set period to respond. No response can lead to judgment by default; a dispute may go to mediation before a hearing.
9. When a solicitor is worth it, and keeping the door open
A solicitor's letter earns its cost when the amount is large enough to justify it, the client is disputing the work rather than just being slow to pay, or you expect the case to be defended in court. For a straightforward late payment on undisputed work, a solicitor rarely achieves more than a well-written letter before action from you, at a fraction of the cost.
Chasing payment does not have to end the relationship. Keep the tone factual rather than personal, put every agreement in writing so nobody has to remember a conversation differently, and once the debt is settled, close it out cleanly rather than letting it colour the next job.
Common questions
Can I charge interest on a late payment from a homeowner client?
Only if your quote or contract sets a rate in advance, or a court adds it. On claims that are not covered by an agreed rate or by the business-to-business Act, the usual court rate is a flat 8% a year, not base rate plus 8%. Put a payment terms clause in every quote so you are not relying on the court's discretion.
What is the statutory interest rate for late business-to-business payment?
8% plus the Bank of England base rate in force at the time, under the Late Payment of Commercial Debts (Interest) Act 1998. Check the current base rate at bankofengland.co.uk before you calculate it, since it changes.
Do I have to send a letter before action before going to court?
Not always, but it is good practice, and if your client is an individual rather than a company, the Ministry of Justice Pre-Action Protocol for Debt Claims requires a compliant letter of claim and a minimum waiting period before you can start proceedings.
How much can I claim through the small claims track?
In England and Wales, claims worth up to £10,000 are normally allocated to the small claims track. Scotland and Northern Ireland run separate systems with their own limits.
Does chasing payment firmly damage the relationship?
Not if it is handled professionally. Clear terms up front, a calm escalation ladder and everything confirmed in writing protect the relationship better than an awkward situation left to drag on for months.
What if the client disputes the invoice rather than just being late?
Treat it as a separate issue from payment timing. Get the objection in writing, check it against the agreed scope and any variations, and consider a solicitor if it looks like it will be defended.
Sources and further reading
Primary and authoritative sources used to check this guide.
- Interest on late commercial paymentsGOV.UK
- Claim debt recovery costs on late paymentsGOV.UK
- Late Payment of Commercial Debts (Interest) Act 1998legislation.gov.uk
- Make a court claim for moneyGOV.UK
- Work out how much interest you can claimGOV.UK
- Pre-Action Protocol for Debt ClaimsMinistry of Justice
- Civil Procedure Rules, Part 26: case and costs managementMinistry of Justice
General information for UK debt recovery on residential building work, not legal or debt-collection advice. Statutory interest, compensation and court procedure depend on the type of client, the wording of your contract and where the work took place. Requirements can differ across the UK. Take professional advice for a specific dispute or before starting court action.