Which letter to use #
| Who owes you | What applies | Time to reply |
|---|---|---|
| A limited company, LLP or other business that is not a sole trader | Practice Direction: Pre-Action Conduct and Protocols | A reasonable time: 14 days in a straightforward case |
| An individual, including a sole trader | Pre-Action Protocol for Debt Claims | 30 days from the date at the top of the letter |
| Anyone, where the dispute is about construction or engineering work | Pre-Action Protocol for Construction and Engineering Disputes | Acknowledgement within 14 days, response within 28 |
If you are not sure which your customer is, the second letter is the safer choice: it gives more information and more time than the first one asks for. Both are a starting point, and for a large or contested debt a solicitor’s letter may be worth the fee.
Letter to a business #
Click anything in brackets to type over it, then copy, print or download the result. Nothing you type leaves this page.
[Your business name]
[Your address]
[Phone number and email address]
[If you are a limited company: registered in England and Wales, company number 00000000. Registered office: address.]
[Date]
[Customer company name]
[Their address]
Our reference: [INV-0001]
Letter before action: unpaid invoice [INV-0001]
Dear [name],
We are writing about [£0.00] that you owe us for [the goods or work], supplied under [our quotation of date, your purchase order number, or our terms of business].
The claim
- On [date] you agreed to [buy, or have us carry out,] [a short description] for [£0.00]. [A copy of the quotation, order or terms is enclosed.]
- We [delivered the goods, or completed the work,] on [date] and sent invoice [INV-0001] on [date], payable by [due date].
- [No payment has been received, or: you paid £0.00 on date and the balance is unpaid.] We reminded you on [dates] and have received [no reply, or: no reason for the non-payment].
What we are claiming
| Invoice [INV-0001] | [£0.00] |
| Less payments received | [£0.00] |
| Statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 at [11.75] per cent a year from [the day after the due date] to [today], [number] days | [£0.00] |
| Fixed compensation under the same Act | [£40, £70 or £100] |
| Total now due | [£0.00] |
Interest continues at [£0.00] a day until payment. [If your contract sets its own late payment rate, use that rate instead and name the clause.]
What we are asking you to do
Please pay [£0.00] by [a date 14 days from the date of this letter] to account [account name, sort code 00-00-00, account number 00000000], quoting [INV-0001].
If you dispute any part of this claim, please reply in writing by the same date, saying whether you accept it, which facts and which parts of it you dispute and why, and whether you have a counterclaim. Please send copies of any documents you rely on. We enclose copies of [the invoice, the quotation or order, the signed job sheet, and our reminders].
We are willing to discuss settling this without going to court, including through mediation or another form of alternative dispute resolution, and ask you to tell us whether you would be willing to do the same.
If we receive neither payment nor a full reply by [date], we intend to start court proceedings to recover the amount above without further notice. The court will expect both of us to have followed the Practice Direction on Pre-Action Conduct and Protocols, and can take a failure to reply into account when it makes orders for costs.
Yours sincerely,
[Name]
[Position]
For and on behalf of [Your business name]
Enclosures: [list them]
Letter to an individual or sole trader #
The debt protocol calls this a Letter of Claim. It must go out with three things this page cannot print for you: the Information Sheet and Reply Form in Annex 1 of the Pre-Action Protocol for Debt Claims, and a Financial Statement, for which Annex 2 of the same document gives an example.
A sole trader who bought from you for their business is still a business customer for the Late Payment Act, so statutory interest and the fixed sum can apply to them. The letter follows the debt protocol anyway, because they are an individual.
Click anything in brackets to type over it, then copy, print or download the result. Nothing you type leaves this page.
[Date: put it at the top, and post the letter on this date or the next day]
[Your business name]
[Your address]
[Phone number and email address]
[If you are a limited company: registered in England and Wales, company number 00000000. Registered office: address.]
[Customer name]
[Their address]
Our reference: [0001]
Letter of claim: [£0.00] owed to [your business name]
Dear [name],
We are writing because you owe us [£0.00] and we are considering taking court action to recover it. Please read this letter and the documents with it carefully. You have 30 days from the date at the top of this letter to reply.
The debt
The amount you owe is [£0.00], for [what you supplied and when].
[Choose one: Interest and other charges are not being added to this debt. Or: Interest is being added at 0.00 per cent a year under clause 0 of our terms, or under the Late Payment of Commercial Debts (Interest) Act 1998 if you bought for your business, which is £0.00 a day. Other charges being added: none, or list them.]
[Choose one: This debt arises from a written agreement between you and us dated date. You can ask us for a copy of it. Or: This debt arises from an agreement made in person, or by phone, on date at place, between you and name. We agreed that what was agreed, in the words used as far as you can recall them.]
[Only if instalments are being offered or paid: We have received your offer to pay £0.00 a month. We cannot accept it because reason, and we are still considering a court claim because reason.]
Statement of account
[Choose one: We enclose an up to date statement of account, showing any interest and charges added. Or: We enclose our most recent statement, dated date; since then, interest of £0.00 and charges of £0.00 have been added. Or: We have not sent a statement for this debt; since it was incurred, interest of £0.00 and charges of £0.00 have been added.]
How to pay, or to talk to us about paying
You can pay by [bank transfer to account name, sort code 00-00-00, account number 00000000, or another method], quoting reference [0001]. If you would like to discuss paying in instalments, or anything else about this debt, contact [name] on [phone number] or at [email address] as soon as you can.
What to do now
Please read the enclosed Information Sheet. Then fill in the enclosed Reply Form and send it to [address for the Reply Form] within 30 days of the date at the top of this letter. A Financial Statement form is enclosed too, to help you set out your income and spending if you need time to pay.
If you need debt advice, the Information Sheet lists free organisations that can help. Tell us on the Reply Form if you are getting advice, and we will allow you a reasonable time to get it.
If we do not receive your Reply Form within 30 days of the date of this letter, we may start court proceedings against you.
Yours sincerely,
[Name]
[Position]
[Your business name]
Enclosures: Information Sheet and Reply Form (Annex 1 to the Pre-Action Protocol for Debt Claims); Financial Statement; [statement of account]; [copy of the agreement, if there is one].
Before you post it, check each of these against paragraph 3 of the protocol.
- The letter is dated towards the top of the first page, and goes in the post that day or the next
- It is sent by post; an email copy as well is allowed, and if the debtor has explicitly asked not to be written to by post, use the details they gave instead
- It states the amount, and whether interest or other charges are still being added
- It says where the debt comes from: the written agreement and its date, or who made the spoken agreement, when, where and what was said
- It encloses a statement of account, or states the interest and charges added
- It encloses the Information Sheet and Reply Form from Annex 1, and a Financial Statement
- It says how to pay, how to discuss payment, and where to send the Reply Form
What the court expects before a claim #
The Practice Direction on Pre-Action Conduct sets the standard for everything outside a specific protocol, and one line of it sums up the rest:
Litigation should be a last resort.
For a debt owed by a business, the steps it describes are these.
-
You write with concise details of the claim Para 6(a)
The basis of the claim, a summary of the facts, what you want, and how the amount is calculated.
-
They reply within a reasonable time Para 6(b)
14 days in a straightforward case. The reply should say whether the claim is accepted and, if not, why, and whether there is a counterclaim.
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Both sides share the key documents Para 6(c)
The invoice, the order or quotation, and anything that shows what was agreed and delivered.
-
Both sides consider settling Paras 8 to 11
Negotiation, mediation or another form of alternative dispute resolution. Ignoring an invitation to it can count against a party on costs.
If a party does not follow it, the court can order that party to pay costs, including on the higher indemnity basis, and can adjust the interest awarded: a claimant at fault can lose interest, and a defendant at fault can be ordered to pay interest at up to 10 per cent above base rate.
Under the debt protocol, the clock is longer. If an individual replies, you should not start a claim until at least 30 days after you receive their Reply Form, or 30 days after you send any documents they ask for, whichever is later. Documents they request must be provided, or their absence explained, within 30 days. If you agree a repayment plan and they keep to it, you should not start a claim; and where they have replied but you have not agreed, give them at least 14 days’ notice before you issue.
How to use them well #
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Get the numbers exactly right
The Practice Direction warns that a person who knowingly makes a false statement in a pre-action letter may face proceedings for contempt of court. Interest worked out to the wrong day is not that, but it is the first thing a defendant will point to.
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Enclose what proves the debt
The invoice, the order or quotation, a signed job sheet and your reminders. The job sheet template is built to be that evidence.
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Check for Breathing Space
GOV.UK says you cannot make a claim if you are told someone is protected from creditors under the Breathing Space scheme.
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Keep a dated copy of everything
The date the letter went, how it went and what was enclosed. The 30 days and the 14 days both run from dates you may later need to prove.
What getting to this point by hand costs #
A letter before action is usually the end of a long run of reminders that somebody had to remember to send, and each one needed the same facts copied into it: the invoice number, the amount, the dates, the interest to the day. The facts and the arithmetic run on rules. The judgement is deciding whether this customer is worth a claim at all, and that is where the time should go.
The late invoice calculator shows what the chasing costs in hours and what the law lets you claim, and the payment reminder templates cover the stage before this one.