Client not paying an invoice? A step-by-step UK guide
A business client has missed the due date and you have heard nothing. Before you worry, work through a few steps in order: check the invoice, send a polite reminder and then a firmer one, keep a record of every exchange and, if the debt is business-to-business, consider statutory interest and fixed compensation under the Late Payment of Commercial Debts (Interest) Act 1998.
This guide covers debts between businesses in the UK. It does not apply to invoices sent to consumers.
First, check the basics
Many late payments come down to something simple. Before you chase, check:
- The invoice details. Is the amount right, and does the invoice show your bank details, the invoice number and any purchase order number the client asked for?
- The due date. What payment terms did you agree? If you did not agree a payment date, the Act generally treats statutory interest as starting after a 30-day period that begins once you have delivered and the client has notice of the amount (section 4).
- Your contract. Do your terms say anything about late payment, interest or charges?
- The right person. Did the invoice reach the person or accounts team who approves payments? A quick message to confirm it arrived can save weeks.
Send a polite reminder, then a firmer one
Send your first reminder soon after the due date. Keep it short and friendly: the invoice number, the amount, the original due date and how to pay. Our overdue invoice email template gives you wording for that first message.
If there is no reply, follow up with a firmer reminder. Stay professional, restate what is owed and since when, and ask for a payment date. If you intend to add statutory interest or compensation, say so clearly.
Statutory interest and fixed compensation (B2B)
Under the Late Payment of Commercial Debts (Interest) Act 1998, when both you and your client are acting in the course of a business (section 2), a late debt can carry statutory interest and a fixed sum for compensation.
Statutory interest
- Statutory interest is simple interest (section 1).
- The rate is 8% a year over the Bank of England base rate (the "official dealing rate") in force on 30 June or 31 December immediately before the interest starts to run (Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002, article 4). The base rate changes, so check the current Bank of England base rate for the right date.
- If your contract sets its own substantial remedy for late payment, statutory interest may not apply (section 8).
Fixed compensation (section 5A)
Once statutory interest starts to run, you are entitled to a fixed sum on top of the interest:
| Amount of the debt | Fixed sum |
|---|---|
| Less than £1,000 | £40 |
| £1,000 or more, but less than £10,000 | £70 |
| £10,000 or more | £100 |
If your reasonable costs of recovering the debt are higher than the fixed sum, the Act also allows you to claim the difference (section 5A(2A)).
Example data (fictional client): Northgate Joinery Ltd (fictional) owes you £2,400 on a late invoice. The fixed sum for a debt of that size is £70, plus statutory interest, which generally runs from the day after the agreed payment date.
To work out the interest for your own invoice, use our late payment interest calculator. GOV.UK also has a plain-English guide to charging interest and debt recovery costs.
Keep a record of every reminder and reply
Write down what you sent and when, every reply, and any promise to pay by a certain date. Keep copies of the invoice, your contract or quote, and proof of delivery. If the matter goes further, a clear timeline of what was agreed and what happened makes it much easier for you, or an adviser, to set out your position.
If they still don't pay
If reminders have not worked, you have several options, and the right one depends on your situation:
- Mediation, where an independent person helps you and your client reach an agreement.
- A solicitor or other professional adviser, who can look at your contract and the evidence.
- The official court claims process. GOV.UK explains how to make a court claim for money.
FetchDue does not take legal action or offer legal advice. Get professional advice before taking any of these steps.
Stop chasing by hand
FetchDue handles the follow-up for invoices you have already issued to business clients:
- polite reminders on a schedule, within your sending hours
- a tone that moves from polite to firmer if the invoice stays unpaid
- every proposed reply waits for your review before it goes out
- payment promises, pauses and notes logged against each invoice
- part payments update the balance owed
- Add invoices manually. Connect Xero (early access).
FetchDue does not issue invoices or take legal action. Read more about credit control software for small businesses.
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Frequently asked questions
What should I do if a client doesn't pay an invoice?
Check the invoice and your terms, send a polite reminder, then a firmer one, and keep a record of every exchange. For business-to-business debts in the UK, statutory interest and a fixed compensation sum may also apply.
How much interest can I charge on a late invoice in the UK?
For business-to-business debts, statutory interest is 8% a year over the Bank of England base rate in force on 30 June or 31 December before the interest starts to run. It may not apply if your contract sets its own substantial remedy for late payment.
What fixed compensation can I claim?
£40 for a debt under £1,000, £70 for £1,000 or more but under £10,000, and £100 for £10,000 or more. This is set by section 5A of the Late Payment of Commercial Debts (Interest) Act 1998.
Does this apply to consumers?
No. The Act applies only where both the supplier and the purchaser are acting in the course of a business.
How long should I wait before chasing?
Send a reminder soon after the due date; many businesses follow up within a few days.
Does this apply in Ireland?
No. This guide covers UK law. Ireland has its own late payment rules, so check those before adding interest or charges.
This is general information, not legal advice. Statutory interest and compensation apply to business-to-business debts only. Check your contract and get professional advice for your situation.