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Late payment letter pack UK
Four letters that form the chasing ladder. One per step. Ready to copy. From a polite reminder to a letter before action. With the small claims note at the end.
All names below are invented examples. Amounts are worked with maths that adds up.
Letter 1: reminder on the due date
Use on the due date. No legal warning yet.
8 Elmwood Road, Clifton, Bristol BS8 1AP
J. Lee (example, sole trader). Northfield Electrical
Check: £1,134.00 minus £200.00 equals £934.00.
Letter 2: firm reminder, 7 days overdue
8 Elmwood Road, Clifton, Bristol BS8 1AP
J. Lee. Northfield Electrical
Letter 3: notice with interest and costs
Use after 14 days. Show the legal claim and the maths.
8 Elmwood Road, Clifton, Bristol BS8 1AP
J. Lee. Northfield Electrical
Check: £934.00 plus £6.58 plus £40.00 equals £980.58. £934.00 x 12.25% = £114.42 a year. /365 = £0.31 a day. x21 = £6.58.
Letter 4: letter before action
Give 30 days. Required by the Pre-action Protocol where the debtor is an individual. Include enclosures.
8 Elmwood Road, Clifton, Bristol BS8 1AP
J. Lee (example, sole trader). Northfield Electrical
Signed: __________________ Date: 18 Dec 2026
Small claims note
If payment still does not come start a claim for money to the County Court. Read make a court claim for money on gov.uk.
- Track: claims to £10,000 in England and Wales go to the small claims track. Interest is 8% under County Courts Act 1984 section 69 where the 1998 Act does not apply.
- Fee: the fee depends on the sum claimed. Check the fee on gov.uk at the date you claim.
- Before you claim: keep copies of all letters and proof of postage. You must have sent a letter before action and given time to respond.
Get advice where the customer is a consumer or where the facts are disputed.
What the law says
This section names the actual requirement with source and date read.
- Statutory interest and fixed sum. Gov.uk late payments and the Late Payment of Commercial Debts (Interest) Act 1998 say a business can claim 8% above base rate plus £40 to £999.99, £70 to £9,999.99, £100 at £10,000+, plus reasonable costs where fixed sum is not enough. Simple daily interest from the day after due date. Read on 24 Oct 2026. Base 4.25% at that date gives 12.25%.
- Business debts. The 1998 Act covers business to business supply. Consumer debts use the contract or County Courts Act 1984. Do not add the fixed sums to consumer debts in the same way.
- Letter before action. The Practice Direction on Pre-Action Conduct and the Pre-action Protocol for Debt Claims require a letter that sets out the claim and gives time to respond. The Protocol needs amount, interest, agreement, documents, payment details, information sheet, reply form and 30 days. Read on 24 Oct 2026.
This is general information, not legal advice.
How to use the ladder
Send letter 1 on the due date. Send letter 2 at 7 days. Send letter 3 with the maths at 14 days. Send letter 4 as the formal action letter with 30 days. Keep copies and proof of postage. The app fills the invoice number and balance at each step.
Questions
Can I charge interest to any customer?
Only where the law allows. For business, the 1998 Act allows 8% above base plus fixed sums. For consumers the contract must provide for it. Or claim 8% under County Courts Act 1984 when you file.
What is daily interest here?
£0.31 a day. £934.00 x 12.25% = £114.42 a year. /365 = £0.31. x21 days = £6.58.
Must I give 30 days?
Yes where the Debt Protocol applies. That is business claiming from an individual. The Protocol needs 30 days. Where the debtor is a business the Practice Direction needs reasonable time. In practice give 30 days.
What is enclosed with letter 4?
The invoice plus terms plus the Protocol information sheet plus the reply form. List what is enclosed in the letter.
Sources
Law and court rules read on gov.uk and legislation.gov.uk on 24 October 2026.
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