Payment Chasing Templates for Tradespeople

Quick Answer: Use a four-stage escalation: friendly reminder at day 1 overdue, firm chase at day 7, final demand citing the Late Payment of Commercial Debts (Interest) Act 1998 at day 14, then Letter Before Action at day 21 before issuing County Court proceedings. Each stage has a specific tone and legal weight, and the templates below are ready to copy.

Summary

The single biggest cause of tradesperson cash flow failure is not insufficient work — it is unpaid invoices sitting at 30, 60, 90 days. Most tradespeople either chase too softly (and never get paid) or too aggressively (and damage the relationship before they need to). The solution is a consistent, escalating template system you apply every time, regardless of how much you like the customer.

This article provides the exact wording for each chase stage, by SMS, email and formal letter, with the legal language that adds weight without burning the relationship until the final escalation. It assumes you already have a written contract or accepted quote with clear payment terms — see written contract guide and written quote template if not.

The discipline is in sending the chase on the exact day, every time. Customers who pay late do so because they know they can. A consistent system trains them — and the next customer — to pay on the due date.

Key Facts

Quick Reference Table

Spending too long on quotes? squote turns a 2-minute voice recording into a professional quote.

Try squote free →
Day Overdue Stage Channel Tone Statutory Wording
1 Friendly reminder SMS or email Light, assumes oversight None
7 Firm chase Email Direct, references invoice None
14 Final demand Email + letter Formal Introduces statutory interest and compensation
21 Letter Before Action Recorded delivery letter Legal 14-day notice of County Court proceedings
35 Court proceedings Money Claim Online N/A Claim filed
90 Statutory Demand (if £750+) Personal service Insolvency threat 21 days to pay or face winding-up/bankruptcy petition

Detailed Guidance

Stage 1: Day 1 overdue — friendly reminder

SMS template:

Hi [First name], hope you're well. Just a quick reminder that invoice [INV-XXX] for £[amount] was due yesterday. If you've already paid, ignore this — if not, please let me know if you need the bank details again. Thanks, [Your name]

Email template:

Subject: Invoice [INV-XXX] — quick reminder

Hi [First name],

Hope you're well. Just a quick note that invoice [INV-XXX] for £[amount] was due on [due date] and I haven't seen it through yet.

If you've already sent payment, please ignore — sometimes bank transfers take a day or two. Otherwise, the details are:

Bank: [Bank name]
Account name: [Trading name]
Sort code: [XX-XX-XX]
Account number: [XXXXXXXX]
Reference: [INV-XXX]

Let me know if there's any problem and I'll sort it.

Thanks,
[Your first name]

This stage assumes good faith. Roughly 60% of overdue invoices are paid within 48 hours of a friendly reminder. Do not threaten or escalate at this stage — most overdues are pure administrative oversight.

Stage 2: Day 7 overdue — firm chase

Email template:

Subject: Invoice [INV-XXX] — now 7 days overdue

Hi [First name],

I haven't yet received payment for invoice [INV-XXX] (£[amount]), which was due on [due date] — now 7 days overdue.

Per the terms of our agreement, payment is due within [X] days of invoice date. Please could you let me know when I can expect payment?

If there's an issue with the work or the invoice itself, please reply and tell me — I'd much rather discuss it than chase silence.

Bank details for transfer:
[Bank name] / [Sort code] / [Account number] / Ref: [INV-XXX]

Thanks,
[Your first name]
[Trading name]
[Phone number]

Notes:

If you've had no response by day 10, follow up with a single SMS:

Hi [First name], emailed Tuesday about invoice [INV-XXX] — could you let me know payment timing? Thanks, [Your name]

Stage 3: Day 14 overdue — final demand

This is the stage where statutory rights are introduced. Send by email AND post a printed copy.

Email and letter template:

Subject: FINAL DEMAND — Invoice [INV-XXX]

Dear [Customer name / Company name],

This is a final demand for payment of invoice [INV-XXX] dated [invoice date], totalling £[original amount], which was due on [due date] and is now [14] days overdue.

To date I have received no payment and no substantive response to my reminders of [date 1] and [date 2].

Statutory interest and compensation [commercial debts only]

Under the Late Payment of Commercial Debts (Interest) Act 1998 (as amended), I am entitled to:

- Statutory interest at the Bank of England base rate plus 8% per annum, accruing from the due date until payment in full
- Fixed compensation of £[40 / 70 / 100 depending on band] for the cost of recovering this debt
- Reasonable additional debt recovery costs

The amount currently outstanding is:

Original invoice: £[amount]
Statutory interest (calculated to today): £[amount]
Fixed compensation: £[40/70/100]
TOTAL DUE: £[total]

I require payment in full within 7 days of the date of this letter. If payment is not received by [deadline date], I will issue a Letter Before Action and, if necessary, commence County Court proceedings to recover the debt, statutory interest, compensation, court fees and any reasonable recovery costs.

I would much prefer to resolve this without legal action. Please contact me by [deadline date] to arrange payment or discuss any genuine dispute over the invoice.

Yours sincerely,

[Your name]
[Trading name]
[Address]
[Phone]
[Email]

For domestic consumer debts, replace the "Statutory interest and compensation" section with:

Interest under contract

Under clause [X] of my standard terms and conditions (or our written contract dated [date]), interest accrues on overdue invoices at [8% above Bank of England base rate / [your contractual rate]] per annum from the due date.

The amount currently outstanding is:

Original invoice: £[amount]
Interest to date: £[amount]
TOTAL DUE: £[total]

Calculating statutory interest

The calculation is simple daily interest, not compound. Use the formula:

Daily interest = (Amount × (Base rate + 8%) / 365)
Interest owed = Daily interest × Days overdue

Example: £2,400 invoice, 14 days overdue, base rate 5.25% (so total rate 13.25%):

The current Bank of England base rate is published at bankofengland.co.uk/monetary-policy/the-interest-rate-bank-rate.

Stage 4: Day 21 overdue — Letter Before Action

This is the formal pre-court step required by the Pre-Action Protocol for Debt Claims (for individual debtors) or Practice Direction Pre-Action Conduct (for company debtors). Sending this letter is required — courts can penalise claimants who skip it.

Letter Before Action template (send by recorded delivery):

[Your name and address]
[Date]

[Customer name and address]

LETTER BEFORE ACTION

Dear [Customer name],

Re: Invoice [INV-XXX] dated [invoice date] — £[total now owed including interest and compensation]

Despite my previous correspondence dated [date], [date], and [date], the sum of £[total] remains unpaid in respect of [brief description of work, e.g. "bathroom installation completed at [address] on [date]"].

The amount claimed comprises:

- Original invoice: £[amount]
- Statutory interest to [today's date]: £[amount]
- Fixed compensation (Late Payment Act): £[40/70/100]
- TOTAL: £[total]

Statutory interest continues to accrue at £[daily rate] per day until payment in full.

If full payment is not received within 14 days of the date of this letter (i.e. by [deadline date]), I will issue County Court proceedings against you to recover the debt, interest, compensation, court fees and reasonable legal costs, without further notice.

I attach a copy of the original invoice, the signed quotation/contract dated [date], and a statement of account.

If you wish to dispute any part of this claim or propose a payment plan, please reply within 14 days. I am willing to consider reasonable payment proposals to avoid court action.

Information you should consider:

- You should seek independent legal advice if you are unsure of your position.
- Free debt advice is available from Citizens Advice (citizensadvice.org.uk) or StepChange (stepchange.org).
- If you do not respond within 30 days, I am entitled to begin court proceedings without further warning.

Yours sincerely,

[Signature]
[Printed name]

Enclosures:
1. Copy of invoice [INV-XXX]
2. Copy of signed quote/contract dated [date]
3. Statement of account
4. Information sheet and reply form (where required for individual debtors under the Pre-Action Protocol for Debt Claims)

For individual (non-business) debtors, you must include an Information Sheet and Reply Form as required by the Pre-Action Protocol for Debt Claims. Templates are at justice.gov.uk.

Stage 5: Day 35 — County Court claim

If no payment or genuine dispute by the LBA deadline, issue proceedings via Money Claim Online (MCOL) at moneyclaim.gov.uk.

Issue fees (as of 2026):

Court fees and reasonable legal costs are recoverable as part of the claim.

Most defended cases in this bracket are allocated to the Small Claims Track (claims up to £10,000), which has limited cost recovery — you cannot generally claim solicitor fees, only fixed costs and disbursements.

Statutory Demand (commercial debts only, £750+)

For limited company debtors owing £750+, an alternative route is a Statutory Demand under the Insolvency Act 1986. If unpaid within 21 days, you can present a winding-up petition. This is aggressive and best used when you suspect insolvency rather than mere reluctance — and never if the debt is genuinely disputed (the company can apply to have the demand set aside and you'll pay costs).

Construction contracts — the pay less notice

Under the Housing Grants, Construction and Regeneration Act 1996 (HGCRA), as amended by the Local Democracy, Economic Development and Construction Act 2009, for "construction operations" the payer must serve a pay less notice within the prescribed period (typically 5-7 days before the final date for payment) to dispute an invoice. Without a valid pay less notice, the full notified sum becomes due.

This is a powerful tool for tradespeople doing building work — if the customer hasn't served a pay less notice on time, statutory adjudication can force payment within 28 days.

Frequently Asked Questions

Can I add interest to a domestic customer's overdue invoice?

Only if your written contract or accepted T&Cs explicitly provide for it. The Late Payment of Commercial Debts (Interest) Act 1998 applies to commercial debts only. For domestic customers, your T&Cs should include a clause like: "Overdue invoices will accrue interest at 8% above the Bank of England base rate per annum, accruing daily from the due date until payment in full." Without such a clause, you cannot charge interest unilaterally on consumer debts.

What if the customer disputes the work?

Stop the standard chase sequence and treat as a complaint — see complaint handling procedure. A genuine dispute means you may not currently be entitled to payment, and chasing aggressively could damage any later court claim. Investigate, offer to inspect or remedy, and document everything. If the dispute is unresolved, your case proceeds to court on its merits with the work history evidenced.

Can I lien their property (refuse to release work until paid)?

There is no general "tradesman's lien" in English law for installed work — once goods are fixed to the property they belong to the property owner. A possessory lien only exists for unfixed items in your possession (e.g. a boiler not yet installed). Threatening to remove installed work is unlawful and can constitute criminal damage.

What if the customer goes into liquidation?

Register as an unsecured creditor with the appointed liquidator. Unsecured creditors typically recover pennies in the pound, if anything. The lesson is preventative: take deposits (see deposit requests), stage payments, retention of title clauses for materials, and never extend large credit limits to limited companies without director's personal guarantees.

How long do I have to chase a debt?

Six years from the due date for simple contract debts (Limitation Act 1980 s.5). After six years the debt becomes statute-barred and unenforceable in court. The clock can be reset by a written acknowledgment of the debt or a part-payment.

Regulations & Standards