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Late payment letter templates, from first nudge to letter before action

A late payment letter escalates in four stages: a polite reminder just after the due date, a firm chaser at around two weeks, a final notice that states statutory interest and compensation, and a letter before action giving a deadline before court proceedings. Under the Late Payment of Commercial Debts (Interest) Act 1998, UK businesses can add statutory interest of 8% plus the Bank of England base rate to overdue B2B invoices, plus fixed compensation per invoice.

Template 1: the polite reminder (a few days overdue)

Subject: Invoice [number], now due. Dear [name], a quick reminder that invoice [number] for [amount], due on [date], appears to be outstanding. If payment is already on its way, please ignore this note. If not, you can settle it by card or bank transfer here: [payment link]. Kind regards, [your name].

Keep it friendly and make paying effortless. Most late invoices are cock-up, not conspiracy; a one-tap payment link converts good intentions into cleared funds the same day.

Template 2: the firm chaser (about two weeks overdue)

Subject: Invoice [number], 14 days overdue. Dear [name], invoice [number] for [amount] is now 14 days past its due date of [date]. Please arrange payment within 7 days, or reply with a date we can rely on. You can pay instantly here: [payment link]. If there is a problem with the invoice, tell us now so we can resolve it. Regards, [your name].

The shift is from reminding to requiring: a specific deadline, a request for a committed date, and an invitation to surface disputes now rather than at the court stage.

Template 3: the final notice (30 days or more)

Subject: Final notice, invoice [number]. Dear [name], despite previous reminders, invoice [number] for [amount] remains unpaid [X] days after its due date. Under the Late Payment of Commercial Debts (Interest) Act 1998 we are entitled to add statutory interest at 8% above the Bank of England base rate, plus fixed compensation, and we will apply both from [date] if the balance is not cleared within 7 days. Pay now: [payment link]. Regards, [your name].

This is where the statutory regime earns its keep: naming the Act, the rate and a date changes the economics of ignoring you. Use our late payment interest calculator to put an exact figure in the letter; an exact figure is harder to ignore than a threat.

Template 4: the letter before action

Subject: Letter before action, invoice [number]. Dear [name], this is formal notice that unless invoice [number] for [amount], plus statutory interest of [amount] and compensation of [amount], is paid within 14 days of the date of this letter, we intend to issue court proceedings against you for recovery of the debt without further notice. Payment can be made by bank transfer to [details] or instantly here: [payment link]. A full statement is enclosed. Yours faithfully, [your name].

Send it on letterhead, by post and email, and mean it: an LBA you do not follow through on trains debtors to ignore the next one. Where the debtor is an individual or sole trader, the Pre-Action Protocol for Debt Claims sets out extra requirements, including an information sheet and a 30-day window, so take advice before issuing. This article is general information, not legal advice.

What you can add on top: interest and compensation

For B2B invoices, the 1998 Act gives you statutory interest at 8% plus the Bank of England base rate, running from the day after the due date (or 30 days after invoice or delivery, whichever is later, if no terms were agreed). On top, you can claim fixed compensation per invoice: £40 for debts under £1,000, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more.

The strongest late-payment system, though, is making payment trivially easy at every step: every template above carries a payment link because a debtor who can settle by card in one tap has one less reason to wait for a bank transfer they keep postponing.

Put it to work

Frequently asked questions

On B2B invoices in the UK, yes: the Late Payment of Commercial Debts (Interest) Act 1998 gives it to you as a statutory right, without needing a clause in your contract. Consumer debts are a different regime with different rules.

The day after your agreed due date. If no terms were agreed, it starts 30 days after the invoice or the delivery of the goods or services, whichever is later.

The courts expect a genuine attempt to resolve the debt first, and where the debtor is an individual or sole trader the Pre-Action Protocol for Debt Claims applies formally. Skipping it can cost you on costs even if you win. This is general information, not legal advice.

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