Payment Chasing Templates for Tradespeople

Quick Answer: Start chasing overdue invoices on the first business day after the payment due date. Use a polite reminder first, escalating through formal notice and then a Letter Before Action before considering small claims. Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge 8% above the Bank of England base rate on overdue B2B invoices without the customer's agreement. For residential customers, the Consumer Contracts Regulations and your written contract terms apply.

Summary

Unpaid invoices are the single biggest cash flow problem facing sole traders and small contractors in the UK. Research from the Federation of Small Businesses consistently shows that UK SMEs are owed billions in late payments at any given time, and construction and trades are among the worst-affected sectors. A job well done that never gets paid for is not just a financial loss — it is the labour, materials, and opportunity cost that could have been used elsewhere.

The good news is that a systematic, professional approach to chasing payment resolves most overdue invoices without the need for solicitors or court action. The key is starting early, keeping all communication in writing, and escalating in predictable steps. Customers who sense that a tradesperson will not follow through — because previous chasers received no response — are far more likely to delay payment indefinitely.

This article provides ready-to-use templates for the full escalation sequence, from a first-day reminder to a Letter Before Action. The companion article late payment strategy and your legal rights covers the statutory framework in more detail.

Key Facts

• Late Payment of Commercial Debts Act 1998 — applies to B2B transactions; allows you to charge 8% + Bank of England base rate interest on overdue amounts without the customer's prior agreement
• Compensation under the Act — you can also claim a fixed compensation fee: £40 for debts under £1,000; £70 for £1,000–£9,999; £100 for £10,000+
• Residential customers — the Late Payment Act does not apply; interest terms must be in your contract or agreed in writing
• Payment due date — defaults to 30 days if no payment terms are stated in your contract or invoice; always state your terms explicitly
• Letter Before Action (LBA) — must be sent before initiating a small claims court claim; 14 days' notice is the standard period
• Small claims track — county court claims up to £10,000 can be filed online via Money Claim Online (MCOL); current filing fee is £35–£455 depending on claim value
• Keep all records — invoices, delivery notes, photos of completed work, WhatsApp messages, and email exchanges are all evidence
• Do not remove your work — repossessing installed materials without a court order is illegal in England and Wales (contrary to common belief among tradespeople)
• Part payments — accept part payments with a written acknowledgement, but note in writing that the balance remains due under the same terms
• Dispute vs delay — if the customer disputes the invoice, treat it differently from deliberate delay; disputes require a different approach (see complaint handling procedure)

Quick Reference Table

Detailed Guidance

Template 1 — Friendly Reminder (Day 1)

Subject: Invoice [INV-XXX] — Payment Reminder

Hi [Name],

Hope you're well. Just a quick note to flag that invoice [INV-XXX] for £[amount] was due on [date]. I may have missed a payment confirmation from your end, so please do let me know if you need a copy of the invoice or bank details.

Payment can be made to: Account name: [Your business name] Sort code: [XX-XX-XX] Account number: [XXXXXXXX] Reference: [INV-XXX]

Thanks very much, [Your name]

Notes: Keep this warm and assume error rather than intent. Attach the original invoice as a PDF. Send via WhatsApp or text if that is the main communication channel with this customer.

Template 2 — Second Reminder (Day 7)

Subject: Invoice [INV-XXX] — Second Payment Reminder

Dear [Name],

Further to my message on [date], I am writing again regarding invoice [INV-XXX] for £[amount], which remains unpaid.

Our payment terms require settlement within [30] days of the invoice date. As we are now [X] days overdue, I would ask you to arrange payment as a matter of priority.

If there is an issue with the invoice or the work completed, please contact me today so we can resolve it.

Bank details: [As above]

Yours sincerely, [Your name] [Business name]

Notes: Use email rather than WhatsApp for this message — you need a paper trail. Reference your payment terms explicitly. The invitation to raise a dispute is important; it distinguishes genuine dissatisfaction from deliberate delay.

Template 3 — Formal Notice with Statutory Interest (Day 14)

Subject: Overdue Invoice [INV-XXX] — Formal Notice

Dear [Name],

Invoice [INV-XXX] for £[amount] remains outstanding as of today, [date].

[For B2B customers:] Under the Late Payment of Commercial Debts (Interest) Act 1998, statutory interest is now accruing on this debt at a rate of 8% above the Bank of England base rate. I am also entitled to claim a fixed compensation fee of £[40/70/100] under the Act.

[For residential customers:] Under the payment terms agreed in our contract dated [date], this invoice is now [X] days overdue.

Please arrange payment of £[amount] by return. If payment is not received within 7 days of this notice, I will have no option but to issue a formal Letter Before Action, which may result in court proceedings.

Yours faithfully, [Your name] [Business name] [Your address] [Date]

Notes: Use "Yours faithfully" (not "Yours sincerely") when you do not know the customer by name; use "Yours sincerely" if you do. Print and retain a copy dated and signed. Sending by recorded delivery at this stage creates a delivery record.

Template 4 — Letter Before Action (Day 28)

Subject: Letter Before Action — Invoice [INV-XXX]

[Your name and address] [Date]

[Customer's full name and address]

Dear [Name],

Re: Outstanding Invoice [INV-XXX] — £[total amount including interest and compensation]

This letter constitutes a formal Letter Before Action.

Despite repeated requests, invoice [INV-XXX] for £[original amount] issued on [date] remains unpaid. The invoice relates to [brief description of work] carried out at [address].

The total amount now due is:

• Original invoice: £[X]
• Statutory interest ([days] days at [rate]%): £[X]
• Statutory compensation: £[40/70/100]
• Total: £[X]

If payment of the total amount is not received within 14 days of the date of this letter, I intend to commence county court proceedings without further notice. Court fees and any solicitor costs may be added to the claim.

Payment should be made to: [Bank details]

Yours faithfully, [Your name] [Business name]

Notes: Send by first class post and retain a copy. Email a scanned copy simultaneously. Keep the original and proof of postage. 14 days is the standard notice period before MCOL filing.

Filing a Small Claims Claim

If the Letter Before Action deadline passes without payment, file online at gov.uk/make-court-claim-for-money (Money Claim Online). You will need the customer's full name and address, the amount claimed, and a brief description of why the money is owed. Keep the description factual: "For labour and materials for [description] at [address], completed on [date], as per invoice [INV-XXX] dated [date]."

Filing fees range from £35 (claims under £300) to £455 (£5,000–£10,000). For claims above £10,000, you are in the fast track and should consider a solicitor.

Frequently Asked Questions

Should I stop communicating by WhatsApp and switch to email?

Once you pass the friendly reminder stage, yes. Email creates an automatically timestamped, searchable paper trail. WhatsApp screenshots are admissible evidence, but email is cleaner and harder to argue about. Keep WhatsApp for short acknowledgement messages if the customer responds there, then follow up with an email summarising what was agreed.

What if the customer says the work was defective?

A complaint raised after a payment chase is common — it may be genuine or it may be a tactical delay. Either way, treat it seriously and address it separately from the payment chase. If the defect is real, fix it. If it is exaggerated or fabricated, document your position in writing. See the complaint handling procedure for the correct response. Do not simply cancel the invoice because the customer claims something was wrong.

Can I charge for debt recovery costs?

For B2B debts: yes, under the Late Payment of Commercial Debts Act you can claim fixed compensation (£40–£100 depending on debt size) plus reasonable debt recovery costs beyond that. For residential customers: only if your contract includes a recovery costs clause.

What is the limitation period for unpaid invoices?

Six years from the date the debt became due (Limitation Act 1980). In practice, do not wait more than a few months before escalating — evidence gets lost, customers move, and courts are less sympathetic to claimants who delayed unnecessarily.

Regulations & Standards

• Late Payment of Commercial Debts (Interest) Act 1998 — statutory interest and compensation on overdue B2B invoices

• Limitation Act 1980 — 6-year limitation period for contract claims in England and Wales

• Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 — governs off-premises consumer contracts, including cooling-off rights that affect when a residential job can start

• County Court Rules / Civil Procedure Rules — govern the small claims track process; Practice Direction Pre-Action Conduct requires a Letter Before Action before filing

• Money Claim Online (MCOL) — UK government online portal for county court claims

• Late Payment of Commercial Debts Act 1998 — full Act text

• Federation of Small Businesses: Late Payment — FSB guidance and campaigns on small business late payment

• late payment rights and the escalation framework — detailed guide to statutory interest, compensation, and court processes

• payment terms and stage payment structures — setting up payment terms correctly to avoid disputes

• written contracts for tradespeople — how clear contracts prevent payment disputes

• handling customer complaints professionally — separating genuine defect claims from payment avoidance