To recover an overdue invoice in the UK, check the invoice reached the right person, send reminders with a way to pay, call, then send a statement and offer a payment plan if the customer can't pay in one go. If that fails, claim statutory interest on business debts, send a letter before claim and, as a last step, make a court claim or hand the debt to a solicitor or agency. You have six years to bring a claim, and if you write the debt off, you can usually reclaim any VAT you've paid on it after six months.
In this article
The short version
- Check the invoice and who it went to before you chase.
- Send reminders with a link to pay, call at around two weeks, then send a statement or offer a payment plan.
- On business debts you can claim statutory interest at 8% above base rate plus £40, £70 or £100.
- Send a letter before claim: 14 days for a business, 30 days for an individual or sole trader.
- You have six years to claim, and a written-off debt usually qualifies for VAT bad debt relief after six months.
Before an invoice goes overdue
First check the invoice is correct and complete: the right customer name, a purchase order number if they use them, the agreed amount and a clear due date. Then check who it went to, because plenty of late invoices are sitting with someone who's left.
Agree payment terms in writing before you start. If you and a business customer never agreed a date, the law treats a payment as late 30 days after they received the invoice or the work was delivered, whichever is later. Make paying easy as well: a link to pay by card or bank on every invoice removes the step where a customer has to copy your bank details into their banking app.
The first weeks after the due date
Reminders come first. Send a short note the day after the due date and another about a week later, each with the invoice, a link to pay and an invitation to reply if something's wrong. SMS or WhatsApp can reach people who leave emails unread.
If you've had no response by around two weeks, call. A phone call to whoever approves payments usually tells you more than another email: whether the invoice is stuck in approval, disputed, or simply not affordable this month.
If a customer has several invoices open, send a statement listing everything owed, with a way to pay them all at once.
If the customer can't pay in one go, offer a payment plan. Agree the instalments and dates in writing, and keep chasing switched off while the plan is being kept.
In Adfin, reminders go by email, SMS and WhatsApp for free on the Essential plan, statements can let a customer pay several invoices in one payment, and you can set up an instalment plan from the aged debtors view.
Interest, escalation and the letter before claim
On an invoice to another business, you can claim statutory interest at 8% above the Bank of England base rate. The rate is set from the base rate on 30 June or 31 December, so it's 11.75% for invoices falling overdue between July and December 2026. You can also claim fixed compensation of £40, £70 or £100 for each invoice, the amount rising with the size of the debt. Neither applies to private individuals who aren't in business, and you can't claim statutory interest if your contract sets a different rate.
Once your usual reminders have gone unanswered, escalate in planned steps: a notice from someone more senior, a payment plan offer, a call, then a final notice. With escalations switched on, part of the Enhanced plan, Adfin's collection agents run these stages for you on the days you choose, starting at least 14 days after the due date, and end with a handover either back to you or to Garfield.Law, an SRA-regulated law firm, with your business staying the claimant.
The letter before claim is the last step before court. For a limited company or another business, give a reasonable time to reply, normally 14 days in a straightforward case. If you're claiming from an individual, sole traders included, you follow the Pre-Action Protocol for Debt Claims: your letter has to enclose an information sheet, a reply form and a financial statement form, and give them 30 days to reply. Skipping this step can count against you on costs if the claim goes to court.
Court, agencies, solicitors and writing it off
In England and Wales, you can make a money claim online if you know the amount you're claiming. The court fee starts at £35 for claims up to £300 and is £455 for claims between £5,000.01 and £10,000. Where a customer defends a claim worth £10,000 or less, the court refers you both to a free mediation appointment, which lasts up to an hour. Check the customer can pay before you issue. Scotland and Northern Ireland have their own processes.
Debt collection agencies usually work on commission, keeping a percentage of whatever they collect for you. A solicitor can send the letter before claim and take the case to court, which tends to suit larger or disputed debts.
There's a time limit. Under the Limitation Act 1980, a claim for a debt under an ordinary contract can't be brought more than six years after the right to claim arose, which for an unpaid invoice is usually the due date.
If chasing further would cost more than the debt is worth, you can write it off. If you're VAT registered and have already paid the VAT on the invoice to HMRC, you can usually get it back through bad debt relief. The debt has to be at least six months overdue, counted from the due date or the date of supply if that's later, and written off in your VAT records, and you have four years and six months to claim.
Common questions
What's the first thing to do when an invoice is overdue? Check the invoice is correct and went to the right person, then send a short reminder with a link to pay. Many late invoices are stuck in approval or with someone who's left.
How much interest can I charge on an overdue business invoice? Statutory interest is 8% above the Bank of England base rate in force on the previous 30 June or 31 December, plus a fixed sum of £40, £70 or £100 depending on the size of the debt.
How long does a customer have to reply to a letter before claim? A business is normally given 14 days in a straightforward case. If the customer is an individual, sole traders included, the Pre-Action Protocol for Debt Claims sets 30 days.
How long do I have to recover an unpaid invoice? Usually six years from when the right to claim arose, which is normally the invoice's due date, under the Limitation Act 1980.
Should I use a solicitor or a debt collection agency? An agency chases for a share of what it recovers and suits debts you'd rather hand over. A solicitor can send a formal letter and take the case to court, which suits larger or disputed debts.
Can I reclaim VAT on an invoice that's never paid? Usually, yes. Once it's six months overdue and written off in your VAT records, you can claim bad debt relief within four years and six months.
Sources
- GOV.UK - Late commercial payments: charging interest and debt recovery (accurate as of November 2026) https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt
- Ministry of Justice - Pre-Action Protocol for Debt Claims (accurate as of November 2026) https://www.justice.gov.uk/courts/procedure-rules/civil/pdf/protocols/debt-pap.pdf
- GOV.UK - Make a court claim for money: court fees (accurate as of November 2026) https://www.gov.uk/make-court-claim-for-money/fees
- legislation.gov.uk - Limitation Act 1980, section 5 (accurate as of November 2026) https://www.legislation.gov.uk/ukpga/1980/58/section/5
- HMRC - Relief from VAT on bad debts (VAT Notice 700/18) (accurate as of November 2026) https://www.gov.uk/guidance/relief-from-vat-on-bad-debts-notice-70018
