How to send a letter before action for an unpaid invoice

You have done the work, sent the invoice, and chased it more than once. The money still has not arrived. A letter before action is the step that comes next, and for most tradespeople it is where an unpaid invoice finally gets taken seriously.

It is a formal written notice telling the person or business that owes you money that you will take them to court if they do not pay. It is the last step before you actually start a claim, and done properly it often works on its own, because it signals that you have stopped chasing and started preparing to act.

This guide covers when to send one, what it has to contain, and the detail that changes everything: whether the customer is a person or a limited company. Get that wrong and the letter can do more harm than good.

If you have not worked through the earlier steps yet, start with what to do when an invoice goes unpaid. The letter before action sits at the end of that sequence, not the start.

When to send a letter before action

A letter before action is appropriate once the friendly chasing has run its course: the invoice is clearly overdue, you have made one or two reasonable attempts to get paid, and the customer is either ignoring you or refusing to pay without good reason.

It works when the debt is genuine and undisputed, where someone owes a clear sum for completed work and has simply not paid. It is the wrong tool when there is a real dispute about the work itself. If the customer is withholding payment because they say the job was unfinished or done badly, a letter threatening court can inflame things and will not reflect well on you if it ever reaches a judge. Deal with the dispute first.

It is worth sending even if you are not certain you will follow through, both because it often prompts payment on its own and because the law expects you to try to resolve matters before issuing a claim.

The detail that changes everything: who owes you

Before you write a line, you need to know what kind of customer owes you, because the rules differ.

If it is an individual or a sole trader, your letter is governed by the Pre-Action Protocol for Debt Claims, the rules that apply when a business claims a debt from a person. It asks more of your letter and gives the debtor longer to respond. If it is a limited company, that protocol does not apply, and your letter falls under the more general Practice Direction on Pre-Action Conduct, which is lighter and allows a shorter response window.

To check, search the free Companies House register. A name ending in "Ltd" or "Limited" that appears on the register is a company. A person trading under their own name, or a sole trader, counts as an individual.

The consequence of getting this wrong is real. Send a company-style letter with a short deadline to an individual and you have not followed the protocol that applies to them, which a court can hold against you later. Identify the customer type first, then write the right letter.

What a letter before action must contain

Whichever protocol applies, the letter needs to set out the facts clearly enough that the other side knows exactly what is being claimed and why. At a minimum, include:

• Your name and address, and the customer's name and address
• The invoice number or numbers the claim relates to, and the date each was due
• A short, factual description of the work you did and the amount outstanding
• The basis of the claim, which for most tradespeople is simply that you provided services under an agreement and have not been paid
• Any interest and compensation you are claiming, and how it is calculated
• A clear deadline for payment or a response
• A statement that you may begin court proceedings if the deadline passes without payment

Keep the tone firm and factual. The letter is more persuasive when it reads as a calm statement of fact than when it reads as a threat. You are setting out a position, not picking a fight.

If the customer is an individual or sole trader, the Pre-Action Protocol for Debt Claims means the letter has to do more. Allow at least 30 days to respond, enclose or clearly offer an up-to-date statement of account, and include a reply form and information sheet pointing the debtor towards free debt advice, for example from Citizens Advice or MoneyHelper. That signposting is a genuine requirement, not a courtesy. Leave it out and the letter does not comply. If the customer is a limited company none of this applies, so you can drop the reply form, information sheet and debt advice, and a shorter deadline is fine, with 14 days commonly treated as reasonable for a clear commercial debt.

Charging interest and compensation

If the customer is another business, you can usually add statutory interest and a fixed compensation sum under the Late Payment of Commercial Debts (Interest) Act 1998, unless your contract sets out a different arrangement. The interest runs at 8 per cent above the Bank of England base rate, and the fixed compensation depends on the size of the debt: £40 for debts under £1,000, £70 for £1,000 to £10,000, and £100 for £10,000 or more. State the figures in the letter and show how you worked them out. This does not apply to debts owed by consumers, where interest is only chargeable in narrower circumstances, so do not assume it.

It is worth getting these numbers right. They can add a meaningful amount to what you are owed, and stating them makes clear you know your rights. Calculating the interest in full is enough for its own guide, but for the letter the key thing is to state the figures and the basis.

Sending the letter and what comes next

Send the letter by post and keep a copy, ideally by a recorded or signed-for service so you can prove it went. For an individual or sole trader, post is the expected method, and you can also email it if you have an address on file. The one exception is where the customer has explicitly asked you not to write by post and given other details, in which case use those. A line buried in your own terms does not count, the request has to come from them. For a limited company you have more freedom over the method, but a provable one is still sensible.

Then wait out the deadline. Often this is where it ends, because a formal letter that clearly anticipates court prompts payment where reminders did not. If the deadline passes with no payment and no genuine dispute, your next step is usually a money claim through the courts, which for most invoice-sized debts means the online Money Claim service. That is a separate process with its own fees and steps.

If the debt is large, genuinely disputed, or met with a complicated defence, speak to a solicitor before going further. A letter before action is well within reach for a clear, undisputed invoice, but there is no shame in getting advice when things are messier than that.

A note on using this guide

This guide explains the general approach and the main requirements to help you understand the process, not as legal advice for your situation. The rules can turn on the particular facts, so if you are unsure, or the amount at stake is significant, a solicitor or a free service like Citizens Advice can tell you where you stand.

When you are ready to write yours, our free letter before action generator builds the right letter for you, whether the customer is an individual or a limited company, and works out the statutory interest. Nothing you enter leaves your browser.

Prevention is always cheaper than escalation, and most invoices that reach this stage could have been protected earlier with clear terms agreed up front. If you find yourself sending these letters often, it is worth revisiting how to write payment terms that actually get you paid and the wider picture in why UK tradespeople get paid late.

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Frequently asked questions

Getting paid: full guide series

• Why UK tradespeople get paid late, and how to stop it
• How to write payment terms that actually get you paid
• What to do when an invoice goes unpaid
• How to chase a friend or referral for payment
• How to send a letter before action for an unpaid invoice (you are here)