Which rules this guide covers
This guide follows the procedure in England and Wales. GOV.UK points out that there is a different process to make a court claim in Scotland and in Northern Ireland, which have their own courts and forms. The six-year limitation rule below also applies to England and Wales.
Before chasing anyone, check three things: the payment date has really passed, the invoice is complete (amount, due date, purchase order number if your customer uses them), and it reached the right person. For the details a VAT invoice must show, see what a VAT invoice must include.
Steps 1 and 2: the reminder, then the phone call
The day after the due date, send a short, friendly reminder: invoice number, amount, due date, a copy of the invoice and your bank details. Assume it was an oversight.
A week later, pick up the phone. The aim is to find the person who actually releases payments and the real reason for the delay: "Is anything missing on your side before this can be paid?" Note the name and the promise, then confirm it by email. If the customer is struggling, offer a written instalment plan rather than letting the silence drag on. Our page on payer psychology explains how to adapt the tone to each kind of late payer.
Step 3: the firm reminder, with interest and compensation
Two or three weeks after the due date, become firm and put a figure on the cost of the delay. When both you and your customer act in the course of a business, the Late Payment of Commercial Debts (Interest) Act 1998 implies a right to simple interest at 8% over the Bank of England's Bank Rate, unless your contract provides a different, substantial remedy. Once interest starts to run, you are also entitled to a fixed sum: £40 for a debt under £1,000, £70 from £1,000 to under £10,000, and £100 for £10,000 or more.
Example: a £4,200 invoice paid 30 days late in October 2026. Bank Rate was 3.75% on 30 June 2026, so the rate is 11.75%: £4,200 × 11.75% ÷ 365 × 30 = £40.56 of interest, plus a £70 fixed sum. The full method is in our article on the Late Payment Act 1998.
If your customer is a consumer, the Act does not apply. GOV.UK states that for other types of debt the interest rate you can claim in a money claim is usually 8% a year: on the same invoice, about £27.62 for 30 days.
Step 4: the letter before claim
Courts expect you to try to settle before suing. Which rules apply depends on who owes you money.
Customer is an individual or a sole trader
The Pre-Action Protocol for Debt Claims applies to any business claiming a debt from an individual, including a sole trader. It does not apply to business-to-business debts unless the debtor is a sole trader. Your Letter of Claim should:
- state the amount of the debt and whether interest or other charges are continuing;
- describe the agreement (written or oral) the debt arises from;
- explain how to pay and how to discuss payment options;
- enclose an up-to-date statement of account, the Information Sheet and Reply Form from Annex 1, and a Financial Statement form;
- be clearly dated near the top and sent by post (you may also email it).
If there is no reply within 30 days of the date on the letter, you may start proceedings. If the debtor says they are seeking debt advice, you must allow a reasonable time, and should not issue less than 30 days after receiving the Reply Form. Documents they request must be provided, or their absence explained, within 30 days.
Customer is a company or partnership
The Practice Direction on Pre-Action Conduct applies. Send a letter with concise details of the claim and what you want, and give a reasonable time to respond: 14 days in a straightforward case. Litigation should be a last resort, so mention that you are open to negotiation or mediation. If a party ignores these steps, the court can take it into account when ordering costs or interest.
Step 5: make a money claim
You can claim online through GOV.UK's Make a money claim service, unless you do not know the exact amount, you claim on behalf of more than one person, the claim is against three or more people or organisations, a party has no address in England or Wales, or you are suing a government department. Otherwise, use paper form N1. You cannot claim against someone who has been granted a Breathing Space (temporary protection from creditors).
The issue fee depends on the amount claimed plus interest:
| Claim (including interest) | Issue fee |
|---|---|
| Up to £300 | £35 |
| £300.01 to £500 | £50 |
| £500.01 to £1,000 | £70 |
| £1,000.01 to £1,500 | £80 |
| £1,500.01 to £3,000 | £115 |
| £3,000.01 to £5,000 | £205 |
| £5,000.01 to £10,000 | £455 |
| £10,000.01 to £200,000 | 5% of the claim |
| More than £200,000 | £10,000 |
Claims worth up to £10,000 normally go to the small claims track (Civil Procedure Rules, rule 26.9). If the defendant disputes such a claim, you will be told you must attend mediation: a telephone appointment of up to one hour with an HMCTS mediator, which is free. If the case still goes to a hearing, a hearing fee is due, from £27 for claims up to £300 to £346 for small claims over £3,000. You may be able to recover your fees if you win.
Step 6: judgment and enforcement
If the defendant does not respond, or does not pay, you can ask the court for judgment (online, or with form N225 for a specified amount). If the judgment is ignored, you can ask the court to enforce it, for a further fee:
| Option | What it does | Fee |
|---|---|---|
| Order to obtain information | Debtor (or a company officer) attends court to explain income, spending or accounts | £69 |
| Warrant of control | Bailiffs ask for payment within 7 days, then may seize goods to sell | £96 |
| Attachment of earnings | Payments taken from the debtor's wages via their employer | £139 |
| Third-party debt order | Freezes money in the debtor's bank or building society account | £139 |
| Charging order | Secures the debt on the debtor's land or property | £139 |
The statutory demand: a stronger lever, used carefully
A statutory demand is a formal demand for payment that you can serve on an individual or a company, without a lawyer. The debtor then has 21 days to pay or reach an agreement. If they do not, you can petition to make an individual bankrupt if they owe £5,000 or more, or to wind up a company that owes £750 or more, within four months. The petition fee alone is £352.
A statutory demand is not a collection letter. An individual can apply to have it set aside within 18 days, and you usually cannot use one for a debt over six years old. Keep it for undisputed debts where insolvency is a credible outcome, and take advice first.
Time limits: the six-year rule
Under section 5 of the Limitation Act 1980, an action founded on simple contract cannot be brought after six years from the date on which the cause of action accrued. Old debts are also much harder to recover, so keep a steady routine: reminder, call, firm reminder, letter before claim.
Frequently asked questions
Do I need a solicitor to make a money claim?
No. GOV.UK's Make a money claim service is designed for businesses and individuals to use themselves. Take advice for complex or large claims, or before serving a statutory demand.
Is a letter before claim compulsory?
The court expects one. For a debt owed by an individual or sole trader, follow the Pre-Action Protocol for Debt Claims (30 days to reply). For a company, follow the Practice Direction on Pre-Action Conduct. Skipping them can cost you on costs and interest.
Can I add interest and the £70 fixed sum to my court claim?
Yes, if the Late Payment Act applies (both parties acting in the course of a business). Remember that the court fee is based on the amount claimed plus interest, which can move you into a higher fee band.
My customer disputes the invoice. What now?
Find out what is disputed and exchange documents. For defended small claims up to £10,000, court mediation is compulsory and free. Avoid a statutory demand on a genuinely disputed debt.
How long do I have to take action over an unpaid invoice?
In England and Wales, a claim founded on simple contract must be brought within six years from when the cause of action accrued (Limitation Act 1980, section 5). Scotland and Northern Ireland have their own rules.
Sources
- GOV.UK — Make a court claim for money (England and Wales) (gov.uk)
- GOV.UK — Make a court claim for money: court fees (gov.uk)
- GOV.UK — Civil court fees (EX50), updated 13 July 2026 (gov.uk)
- GOV.UK — Make a court claim for money: resolve your claim through mediation (gov.uk)
- GOV.UK — Make a court claim for money: enforce a judgment (gov.uk)
- Ministry of Justice — Pre-Action Protocol for Debt Claims (PDF) (justice.gov.uk)
- Ministry of Justice — Practice Direction: Pre-Action Conduct and Protocols (justice.gov.uk)
- Ministry of Justice — Civil Procedure Rules, Part 26 (rule 26.9, small claims track) (justice.gov.uk)
- GOV.UK — Make and serve a statutory demand, or challenge one (gov.uk)
- GOV.UK — Late commercial payments: charging interest and debt recovery (gov.uk)
- legislation.gov.uk — Late Payment of Commercial Debts (Interest) Act 1998, section 5A (legislation.gov.uk)
- legislation.gov.uk — Limitation Act 1980, section 5 (legislation.gov.uk)
- Bank of England — Bank Rate (bankofengland.co.uk)
This article summarises the official texts to help you get organised. It is not a substitute for personalised advice from your accountant.