What to Do When a Client Won't Pay: UK Contractor's Step-by-Step Guide (2026)
You finished the job. The client's happy — or at least they were when you were standing in their kitchen. Now it's been 30 days, 45 days, 60 days. The invoice is sitting there. Emails go unanswered. Calls go to voicemail. You're starting to wonder if you'll ever see that money.
If this sounds familiar, you're not alone. Over half of UK small businesses report being paid late regularly. In construction and the trades, the problem is even worse. The government estimates that UK small businesses are owed over £20 billion in unpaid invoices at any given time.
But here's what most contractors don't realise: the law is heavily on your side. You have specific, powerful rights — and if you follow the right process, you'll recover your money in the vast majority of cases.
This guide walks you through exactly what to do, step by step.
Step 1: Check your position first
Before you pick up the phone, make sure your house is in order. Ask yourself these questions honestly.
Did you have a written contract or agreed terms before work started? Did the client sign off on the quote or scope of work? Did you complete the work to the agreed specification? Is the invoice correctly formatted with the right details, amounts, and payment terms? Has the payment deadline actually passed?
If you're working without a written contract, you can still recover payment — but it's harder. A verbal agreement is still legally binding in most cases, though proving the exact terms becomes your word against theirs. This is precisely why digital contracts with e-signatures matter, but we'll come to prevention later.
If you have a signed quote, a written scope, timestamped evidence of completed work, and a correctly addressed invoice — you're in a strong position. Move to step 2.
Step 2: Send a polite reminder (Day 1 after due date)
Don't wait. The day after your payment deadline passes, send a short, professional reminder. Keep it friendly — there might be a genuine reason. Maybe their accounts person is on holiday. Maybe your email went to spam.
Something like: "Hi [name], just a quick note that invoice [number] for [amount] was due on [date]. Could you let me know when I can expect payment? Happy to resend the invoice if needed."
Send it by email so you have a written record. If you've been communicating by WhatsApp, send it there too — but always follow up with an email as well. WhatsApp messages can be deleted by the other party, but your sent emails can't.
Step 3: Follow up more firmly (Day 7-14)
If the polite reminder gets no response, send a firmer follow-up. This time, reference the payment terms and mention that you'll be applying statutory interest if the invoice remains unpaid.
You don't need to be aggressive. You do need to be clear that you're taking this seriously and that you know your rights. A phone call at this stage is also worthwhile — sometimes people avoid emails but will engage on a call. Make a note of the date, time, and what was said. If they give you a new payment date, confirm it in writing by email immediately after the call.
Step 4: Know your legal rights — the Late Payment Act
This is where most contractors leave money on the table. The Late Payment of Commercial Debts (Interest) Act 1998 gives you the legal right to charge interest on any overdue invoice — automatically. You don't need to have mentioned it in your contract. It applies to all UK business-to-business transactions by default.
Here's what you're entitled to as of February 2026.
Statutory interest: 8% per year above the Bank of England base rate. The base rate is currently 3.75%, so you can charge 11.75% annual interest on the overdue amount. That's calculated daily from the date the payment was due.
Fixed compensation for debt recovery costs:
For debts up to £999.99: £40 flat fee. For debts between £1,000 and £9,999.99: £70 flat fee. For debts of £10,000 or more: £100 flat fee.
Reasonable recovery costs: On top of the fixed compensation, you can also claim any reasonable costs you've incurred chasing the debt — things like solicitor's letters, debt collection fees, or the cost of your own time spent on recovery.
Here's a worked example. Say a client owes you £5,000 and the invoice is 60 days overdue. You can charge: £5,000 × 11.75% × (60/365) = £96.58 in interest, plus £70 fixed compensation. That's £166.58 on top of the original invoice — and it keeps growing every day they don't pay.
Most clients pay quickly once they realise you know the law and intend to apply it.
Step 5: Send a formal "Letter Before Action" (Day 21-30)
If polite reminders and firm follow-ups haven't worked, it's time for a Letter Before Action (LBA). This is the last step before legal proceedings, and it's taken seriously because courts expect you to have sent one.
Your LBA should include: the original invoice amount, the date it was due, the statutory interest accrued to date, the fixed compensation amount, a clear deadline for payment (typically 14 days), and a statement that you will commence legal proceedings through the County Court if payment is not received by that deadline.
Keep the tone professional and factual. Don't threaten. Don't use aggressive language. A judge will read this letter if it goes to court, and they'll look favourably on a contractor who was reasonable throughout.
Send it by email and by recorded delivery post. The postal copy matters — it proves delivery.
Step 6: Issue a claim through Money Claim Online (Day 35+)
If the LBA deadline passes without payment, you can file a claim through the County Court using Money Claim Online at moneyclaim.gov.uk. The process is straightforward.
The court fee depends on the amount you're claiming. For claims up to £300, the fee is £35. For claims between £300 and £500, it's £50. For claims between £500 and £1,000, it's £70. Up to £1,500 is £80. Up to £3,000 is £115. Up to £5,000 is £205. Up to £10,000 is £455.
You can add the court fee to your claim. If the client doesn't respond within 14 days, you can request a default judgment — meaning you win automatically because they didn't show up.
In practice, many clients pay the moment they receive the court papers. Nobody wants a County Court Judgment (CCJ) against their name — it stays on their credit file for six years and makes it extremely difficult to get finance, mortgages, or business credit.
Step 7: Consider alternative routes
If court proceedings feel like too much, there are other options.
Small Business Commissioner: A free government service that helps small businesses resolve payment disputes with larger companies. They'll contact the company on your behalf and try to mediate. It's free and worth trying before court.
Mediation or adjudication: For construction disputes specifically, you may have access to adjudication under the Housing Grants, Construction and Regeneration Act 1996 (the "Construction Act"). This allows disputes to be resolved within 28 days by an independent adjudicator. The decision is binding on an interim basis — meaning they have to pay even if they want to challenge it further later.
Debt collection agencies: If you'd rather hand it off, a specialist debt collection agency can chase the payment for you. Look for one regulated by the FCA. Many work on a no-win, no-fee basis, typically taking 10-15% of the recovered amount. Make sure they don't charge upfront fees.
How to stop this happening in the first place
Chasing unpaid invoices is stressful, time-consuming, and takes you away from actual work. The best strategy is prevention. Here's what the contractors who rarely have payment problems do differently.
Get a signed contract before any work starts. Not a handshake. Not a WhatsApp "yeah go ahead mate." A proper digital contract that both parties sign, with the scope of work, price, payment terms, and what happens if they don't pay. E-signatures are legally binding in the UK under the Electronic Communications Act 2000.
Take a deposit upfront. For larger jobs, requesting 25-50% upfront is standard practice and immediately filters out clients who were never going to pay. If someone refuses to pay a deposit, that tells you everything you need to know.
Invoice immediately. Don't wait until Friday to invoice for work done on Monday. Send it the day the job is completed — or better, use stage payments for larger projects so money flows throughout the job, not just at the end.
Document everything. Timestamped photos before, during, and after the job. Signed completion forms. Written communication confirming the client is happy with the work. If a dispute ever arises, this evidence is worth its weight in gold.
Use automated payment reminders. Don't rely on yourself to remember to chase invoices. Automated systems that send reminders at 7, 14, and 30 days take the personal awkwardness out of it entirely and show clients that your business takes payment seriously.
Include late payment terms in every contract. While the Late Payment Act applies automatically, explicitly stating your right to charge statutory interest makes clients take payment deadlines more seriously from the start.
The 2026 late payment crackdown
It's worth knowing that the UK government is actively tightening rules around late payment. From 2026, large companies that fail to pay suppliers on time can be removed from the Prompt Payment Code and lose access to public sector contracts. Finance directors will be personally accountable for payment reporting. The Small Business Commissioner is getting new powers to investigate and fine systematic late payers.
This is good news for contractors. The culture is shifting. But you still need to protect yourself at the individual job level — no government policy will chase your specific invoice for you.
The bottom line
Getting stiffed on a job isn't just a financial problem — it's demoralising. You put in the hours, did the work, and someone decided they'd rather keep your money than honour their commitment.
But the law is on your side. The process works. And the contractors who get paid consistently aren't the ones who shout the loudest — they're the ones with signed contracts, documented evidence, professional invoicing, and the knowledge of what to do when someone tries to take the piss.
Protect yourself before the job starts, and you'll rarely need to chase anyone after it ends.
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