How to Chase Late Payments Politely (and Still Keep the Client)

Late payments can strangle cash flow and sour client relationships. This comprehensive guide explains when and how to chase outstanding invoices, calculates late payment fees, outlines your rights under UK law and shows how to remain professional throughout. With up‑to‑date figures for 2025–26, email templates and a soft pathway to CaseCraft.AI, you’ll see how to chase what you’re owed without burning bridges.

How to Chase Late Payments Politely: Step by Step

Effective chasing balances professionalism with firmness. The step‑by‑step method below follows the polite-to-firm escalation ladder and includes email templates you can copy.

The Friendly Reminder

Send when: 5–7 days before due date.

• Start with a warm greeting and thank the client for their business.
• Politely note the upcoming due date and attach the invoice. Avoid implying they might forget: instead, say you’re “checking everything’s in order.”
• Keep it short: one paragraph plus the invoice link.

Template:

Subject: Invoice 1234 due on 15 July: gentle reminder

Hi [Client Name],

I hope you’re well. Just a quick note that invoice 1234 for £[amount] is due on 15 July. Please let me know if you have any questions about the bill or payment details. Many thanks for your business.

Kind regards,

[Your Name]

The Firm Follow‑up

Send when: 1–7 days after the due date.

• Use a clear subject line such as “Overdue invoice, immediate action required.”
• State the amount overdue and the number of days past due. Remind them of the original payment terms.
• Mention that interest on late payments may accrue at 8% plus the Bank of England base rate and that you may add a late payment fee.
• Invite them to get in touch if there are any issues.

Template:

Subject: Overdue invoice 1234: please pay promptly

Dear [Client Name],

Our records show that invoice 1234 for £[amount] became due on 15 July and is now [X] days overdue. Under the Late Payment of Commercial Debts Act 1998, I may charge statutory late payment interest (currently 8% plus the Bank of England base rate) and a fixed late payment compensation fee. To avoid any additional late payment charges, please settle the outstanding balance by [new date] or let me know if you foresee any delay.

Best regards,

[Your Name]

The Final Notice

Send when: 21–30 days after the due date.

• Clearly state that this is the final reminder and that you will initiate formal recovery if payment is not received within seven days.
• Include the total debt, the calculated late payment fee and any interest on overdue invoices accrued so far.
• Attach a letter before action and refer to your right to issue a claim in the small‑claims court.

Template:

Subject: Final demand: unpaid invoice 1234

Dear [Client Name],

Despite previous reminders, invoice 1234 for £[amount] remains unpaid [X] days after the due date. I must now insist on payment within seven days. I have calculated statutory late payment interest of £[interest amount] and a fixed compensation fee of £40/£70/£100 (depending on the invoice value). If I do not receive payment by [final date], I will file a claim through the small‑claims court (limit £10 000). Please refer to the attached letter before action.

Yours sincerely,

[Your Name]

Can You Charge a Late Payment Fee or Interest?

Yes, and you should, because it compensates you for lost time and cash flow. UK law lets you add interest on late payments and a fixed late payment fee. Here’s how it works:

Statutory Interest and the 8% + Base Rate Rule

Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge statutory interest at 8% above the Bank of England base rate. The base rate changed several times in 2025: it was 4.5% in February, fell to 4.25% in May, 4% in August and 3.75% in December. That means the statutory rate ranged from 12.5% down to 11.75%. You cannot claim statutory interest if your contract already specifies a different rate or if the debtor is a public authority.

Example calculation (commercial invoice): An invoice for £1 000 issued on 1 July 2025 and unpaid for 50 days (beyond a 30‑day grace period) accrues interest at 12.25% (8% + base rate 4.25%). Daily interest = (£1 000 × 12.25%) ÷ 365 ≈ £0.34 per day. After 50 days, the interest is £0.34 × 50 = £17.00.

How to Calculate Late Payment Interest

Example (B2B invoice, no contractual rate specified): You invoiced a client £500 on 1 January 2025, due within 30 days. They still haven’t paid by 1 June 2025, 122 days overdue. Using the statutory rate of 12.5% (8% + 4.5% base rate applicable at the time the debt fell due), daily interest = (£500 × 12.5%) ÷ 365 ≈ £0.171. Over 122 days, that’s approximately £20.89 in statutory interest, plus a £40 fixed compensation fee, a total of £60.89 on top of the original invoice.

Late Payment Compensation

In addition to interest, you can claim a fixed late payment fee to cover debt‑recovery costs. The sums are set by law: £40 for debts under £999.99, £70 for debts from £1 000 to £9 999.99, and £100 for debts of £10 000 or more. You can add one fee per invoice. This compensation is separate from any court filing fees or enforcement costs.

Tip: Use a late payment of commercial debts calculator (like the one in the CaseCraft.AI portal) to automate these calculations and produce court‑ready figures.

What to Do If They Still Won’t Pay

Sometimes even the toughest reminders don’t work. After 30 days of non‑payment, consider the following steps.

Letter Before Action

A letter before action formally warns the debtor that you will start court proceedings if they fail to pay. The government’s March 2026 response to its late‑payments consultation indicates that all commercial contracts will soon be required to include statutory interest and that disputes must be raised within 30 days. Your letter should:

• Summarise the debt amount, due date, number of days overdue and interest accrued.
• Reference the Late Payment Act and note your right to statutory interest and late payment compensation.
• Set a final deadline (usually seven days). Explain that you will file a small claim if there’s no response.
• Attach a copy of the invoice and any previous reminder emails.

Small Claims/Formal Recovery

If the debtor ignores your letter, you can issue a claim in the County Court. The small‑claims limit is £10 000. The procedure is designed for non‑lawyers: you do not need a solicitor. Court fees vary with claim size (e.g., about £35 for a £300 claim and approximately £530 for a £10,000 claim when filed online). Always check the current fee schedule on the HMCTS website before filing, as fees are reviewed periodically. You can also recover the interest on overdue invoices and fixed late payment charges.

The court will issue a judgment instructing the debtor to pay. However, the court does not enforce payment for you. If the debtor still doesn’t pay, you can apply for enforcement. Options include instructing bailiffs, obtaining an attachment of earnings order (deducting money from their wages) or securing a charging order against property. 

CaseCraft.AI’s Enforcement Guide provides a step‑by‑step process for assessing whether you’re ready to enforce and explains each method.

How to Prevent Late Payments in the First Place

Prevention is better than cure. These practical measures reduce the likelihood of delayed payment, late payment fees and strained client relationships:

• Clear contracts. Put payment terms, due dates, and interest clauses in writing. State that you’ll charge statutory late payment interest if invoices aren’t paid on time.
• Upfront deposits. For large projects, request 25–50% upfront. It signals commitment and protects your cash flow.
• Prompt invoicing. Send invoices immediately after delivering goods or services. Include a link for online payment and your bank details.
• Use an automated invoicing system. Software can send chasing invoices automatically and produce a record of communications. CaseCraft.AI integrates with accounting tools to pull invoice data and generate legal documents.
• Offer early‑payment discounts. A small discount for payment within 7 days can be cheaper than financing the work yourself.
• Run client credit checks. For new business clients, consult credit reports or request trade references to assess payment reliability.