- A plain reminder.Assume it was an oversight. Most of the time it was.
- A firm follow-up with a deadline.A specific date, and what happens after it. If the customer is a business, say that statutory interest and compensation now apply.
- A letter before action.Formal written notice with a deadline. For a business, 14 days is usual under the Practice Direction on Pre-Action Conduct. If the debtor is an individual or a sole trader, the Pre-Action Protocol for Debt Claims gives them 30 days to reply. Going to court without one can cost you.
- A money claim.In England and Wales, Money Claim Online. Claims up to £10,000 go to the small claims track, where you do not need a solicitor and costs are mostly not recoverable either way (As of Oct 2026). A signed quote plus evidence of the work usually wins it.
1. Letter before action. Formal written notice, 14 days to pay, stating you will issue proceedings. The Practice Direction expects this before court and going without one can cost you. It resolves a large share of cases on its own because it is the first thing that looks like consequences.
2. Money Claim Online. Under £10,000 goes to the small claims track. Fee scales with the amount and is recoverable. You do not need a solicitor. With a signed quote and evidence of the work, this is a strong case.
3. What most people miss: if they are a business, the Late Payment of Commercial Debts Act entitles you to statutory interest plus a fixed compensation sum. On £4,800 over six weeks that is real money, and claiming it is often what makes them settle.
Want me to draft the letter before action now?
Three routes, in cost order, plus the entitlement almost nobody claims.
Statutory interest on business debts
Unless the contract gives a substantial remedy of its own, every business-to-business contract for goods or services carries a right to simple interest. It never applies to a consumer. The rate is 8% a year above the Bank of England reference rate, fixed for that debt: 11.75% a year for debts falling due from July to December 2026. It runs from the day after the agreed payment date or, with no agreed date, from 30 days after the later of doing the work and the customer receiving notice of the debt. As of Oct 2026.
Late Payment of Commercial Debts (Interest) Act 1998 ss.1, 2 and 4; Late Payment of Commercial Debts (Rate of Interest) (No. 3) Order 2002
Fixed compensation on each late invoice
On top of interest you add a fixed sum per invoice: £40 for a debt under £1,000, £70 for £1,000 to £9,999.99, and £100 for £10,000 or more, plus reasonable recovery costs above that. A contract term that removes these rights without giving a substantial remedy of its own is void. As of Oct 2026.
Late Payment of Commercial Debts (Interest) Act 1998 ss.5A, 8 and 9
| Statutory interest: £4,800 x 11.75% x 60 / 365 | £92.71 |
| Fixed compensation for a debt of £1,000 to £9,999.99 | £70 |
| Added to what they owe you | £162.71 |
| Interest for each further day | £1.55 |
£4,800 x 11.75% / 365. Simple interest, not compound. Most owners never claim any of it, and claiming it is often what makes a business settle.
Homeowners are different. The Act does not cover consumers, so claim interest at your contract rate if your terms give one. Otherwise ask the court for simple interest on the money claim, which is at its discretion and commonly claimed at 8% a year in England and Wales under the County Courts Act 1984 s.69 (As of Oct 2026).
Scotland and Northern Ireland use different courts. Scotland's simple procedure and Northern Ireland's small claims court both take claims up to £5,000 (As of Oct 2026), so say where you are.
Ask LEO for the letter before action and LUKE for the friendly chase. Different jobs, different specialists.
A customer owes me [amount], due on [date], for [what the work was]. They are a [business or homeowner] and I am in [England, Wales, Scotland or Northern Ireland]. I have chased [how many times]. Walk me through my options in order of cost and likely outcome, and work out any statutory interest and compensation I can add.
Every lesson ends with a question to hand to a Greymill specialist, who answers with what it knows about your business.
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