How to deal with a customer who won't pay

‍‌​‌​​​​​‌​‌​‌‌​​​‌​‌‌‌​​​​‌‌​​‌‍You finished the job and the customer still hasn't paid. Annoying, but you have clear options, and most debts get settled long before anyone goes near a court. Here is the order to work through if you are self-employed in the UK.

Check your paperwork first

Before you chase, make sure you are on solid ground:

• You have a written quote or contract the customer agreed to.
• You have sent a proper invoice showing the amount, what it was for, and a due date.
• Your payment terms were clear (for example, "payment due within 7 days").

You cannot easily chase a debt that was never properly invoiced, so get this straight first.

Step 1: Chase it in writing

• Start with a polite reminder by text or email. People genuinely forget.
• If nothing comes back, send a written reminder with the invoice number, the amount, the date it was due, and a new deadline (say 7 days).
• Keep copies of everything. A clear paper trail matters if this goes further.

Step 2: Add late payment interest and compensation

If your customer is another business, the Late Payment of Commercial Debts (Interest) Act 1998 lets you charge statutory interest of 8% plus the Bank of England base rate, along with a fixed compensation sum that increases with the size of the debt.

Telling the customer you are now adding this often gets the invoice paid. For a private domestic customer this Act does not apply, so your contract terms decide any interest.

Step 3: Send a letter before action

This is your formal final warning that you will start a court claim if you are not paid:

• State the amount owed, what it was for, and a firm deadline (usually 14 days).
• Say clearly that you will begin a county court claim if it is not paid in time.
• Send it so you can prove it arrived (email plus post is sensible). Courts expect you to have given this chance.

Step 4: Make a small claim

• For most trade debts you can use the government's Money Claim Online service.
• There is a court fee that depends on how much you are claiming, and you can usually add it to the claim.
• It is built to be used without a solicitor. If the customer ignores it or loses, you get a County Court Judgment (CCJ) against them, which harms their credit and can be enforced.

Stop it happening again

• Take a deposit before you start the work.
• On bigger jobs, invoice in stages as you go rather than everything at the end.
• Put clear payment terms on every quote and every invoice.

Common questions

Can I take back the work I have fitted? Usually not. You cannot just rip out fitted materials or "repossess" your work without a specific legal right, and doing so can land you in trouble. Chase the money instead.

How long do I have to chase the debt? In England and Wales you generally have six years from the date the payment was due (Limitation Act 1980). Do not sit on it, though.

Do I need a solicitor? For most trade debts, no. The letter before action and Money Claim Online route is designed for you to do yourself. For a large sum, a solicitor's letter can add weight.

Sources

• Late commercial payments: charging interest and debt recovery, gov.uk/late-commercial-payments-interest-debt-recovery
• Make a court claim for money, gov.uk/make-court-claim-for-money
• Limitation Act 1980, section 5, legislation.gov.uk

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