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How to Write a Letter Before Action for Unpaid Invoices (UK Guide)

By NotPaidYet Team·

You've sent polite reminders. You've sent firmer emails. Your client still hasn't paid. What now?

The next step in UK debt recovery is sending a Letter Before Action (LBA). This is a formal legal notice that you're prepared to start court proceedings if payment isn't received within a specified timeframe.

For many businesses, an LBA is the final push needed to get payment. Clients who've ignored polite emails suddenly take you seriously when they realise court action is imminent. Nobody wants a County Court Judgment (CCJ) on their credit record.

This guide explains what a Letter Before Action is, when to send one, what to include, and what happens next.

What is a Letter Before Action?

A Letter Before Action (also called a "Letter of Claim" or "Final Demand") is a formal written notice sent to a debtor before starting court proceedings. It states:

  • The amount owed (invoice amount + interest + compensation)
  • The legal basis for the debt
  • A deadline for payment (usually 14 days)
  • A clear warning that you will start court proceedings if payment isn't received

The LBA serves two purposes:

  1. Final opportunity for settlement - It gives your client one last chance to pay before you incur court costs
  2. Legal requirement - Under the Pre-Action Protocol for Debt Claims, you must send an LBA before starting Small Claims Court proceedings

Key point: An LBA is not optional. If you go straight to court without sending one, the court may strike out your claim or order you to pay costs.

When Should You Send a Letter Before Action?

Send an LBA when:

  1. You've already sent reminders - At minimum, send 2-3 payment reminders before escalating to an LBA
  2. The debt is undisputed - Your client hasn't raised a legitimate dispute about the work or invoice amount
  3. Reasonable time has passed - Usually 14-28 days overdue, though this depends on your payment terms and industry
  4. Communication has broken down - Your client is ignoring emails or making empty promises

Don't send an LBA if:

  • This is your first chase attempt (start with a polite reminder)
  • There's a genuine dispute about the work quality or invoice amount (resolve the dispute first)
  • Your client has requested a short payment extension and you've agreed
  • The relationship is salvageable and informal negotiation is still working

Pre-Action Protocol for Debt Claims

In 2017, the UK introduced the Pre-Action Protocol for Debt Claims, which sets out the steps creditors must follow before starting court action for debts under £100,000.

Key requirements:

  1. Letter Before Claim must be sent at least 30 days before starting court proceedings
  2. Information sheet explaining the debt recovery process must be included
  3. Response Form allowing the debtor to admit/dispute the claim must be provided
  4. Breathing space - You must give the debtor at least 30 days to respond

Failure to follow the Protocol can result in:

  • Your claim being struck out
  • Court ordering you to pay the debtor's costs
  • Delay and additional expense

Good news: Using a template that complies with the Protocol (like our free LBA generator) ensures you're following the rules correctly.

What to Include in Your Letter Before Action

A compliant LBA must include:

1. Your Details and Date

[Your Business Name]
[Your Address]
[Your Email]
[Your Phone]

[Date]

2. Recipient Details

[Client's Name]
[Client's Business Name]
[Client's Address]

3. Clear Subject Line

Letter Before Action: Overdue Invoice #[Invoice Number]

4. Debt Details

State clearly:

  • Invoice number and date
  • Description of goods/services provided
  • Original invoice amount
  • Payment due date
  • Number of days overdue
  • Previous reminders sent (dates)

5. Amount Claimed

Break down exactly what you're claiming:

Invoice amount: £5,000.00
Statutory interest (30 days @ 11.75%): £48.29
Fixed compensation: £70.00
Total amount due: £5,118.29

See our guide on UK late payment rights for how to calculate interest and compensation.

6. Legal Basis

Reference the legislation you're claiming under:

"Under the Late Payment of Commercial Debts (Interest) Act 1998, we are entitled to claim statutory interest at 8% + Bank of England base rate (currently 11.75% per annum) and fixed compensation of £70 for debt recovery costs."

7. Deadline for Payment

Give a clear deadline—usually 14 days from the date of the letter:

"Please arrange payment of £5,118.29 within 14 days of the date of this letter (by [specific date])."

8. Warning of Court Action

State clearly what will happen if payment isn't received:

"If we do not receive payment by [date], we will commence proceedings in the County Court without further notice. You will then be liable for court fees in addition to the debt."

9. Payment Instructions

Make it easy to pay:

Payment can be made by:
- Bank transfer to: [Account details]
- Cheque payable to: [Name]
- Payment reference: [Invoice number]

10. Your Signature

Sign the letter (digital signature is fine for email).

Sample Letter Before Action

Here's a simplified example:

NotPaidYet Ltd
123 Business Street
London, SW1A 1AA
hello@notpaidyet.com
020 1234 5678

15 February 2026

Mr John Smith
ABC Limited
456 High Street
Manchester, M1 1AA

Letter Before Action: Overdue Invoice #2026-001

Dear Mr Smith,

We are writing regarding our invoice #2026-001 dated 15 January 2026 for website design services provided to ABC Limited.

The invoice for £5,000.00 was due for payment on 29 January 2026. Despite sending reminders on 5 February and 12 February 2026, the invoice remains unpaid.

Under the Late Payment of Commercial Debts (Interest) Act 1998, we are entitled to claim:

- Invoice amount: £5,000.00
- Statutory interest (30 days @ 11.75%): £48.29
- Fixed compensation: £70.00
- Total amount due: £5,118.29

Please arrange payment of £5,118.29 within 14 days of the date of this letter (by 1 March 2026).

If we do not receive payment by this date, we will commence proceedings in the County Court without further notice. You will then be liable for additional court fees and costs.

Payment can be made by bank transfer to:
Sort Code: 12-34-56
Account Number: 12345678
Reference: INV2026-001

If you have any queries regarding this matter, please contact us immediately.

Yours sincerely,

Sarah Jones
Director, NotPaidYet Ltd

Note: A full Pre-Action Protocol compliant letter should also include the Information Sheet and Response Form. Use our free LBA generator to create a complete package.

How to Send Your Letter Before Action

1. Email vs Post?

Both. Send the LBA by:

  1. Email (for speed and delivery confirmation)
  2. Recorded delivery post (for proof of receipt)

This provides evidence that the letter was received, which may be needed in court.

2. Keep Evidence

Save:

  • Copy of the LBA
  • Email delivery receipt
  • Postal tracking number
  • Response from debtor (if any)

3. Professional Tone

Keep the tone formal but not aggressive. Avoid:

  • Threats ("I'll ruin your credit rating!")
  • Personal attacks ("You're dishonest!")
  • Harassment ("I'll call you every hour!")

State the facts, reference the law, and give a clear deadline. Let the legal process speak for itself.

What Happens After You Send an LBA?

Scenario 1: They Pay (Most Common)

Many debtors pay immediately upon receiving an LBA. Nobody wants court proceedings, and the formal legal warning often prompts action where polite reminders failed.

What to do: Once payment is received, send a confirmation email and consider the matter closed.

Scenario 2: They Dispute the Debt

If your client disputes the debt (e.g., claiming the work was faulty or incomplete), stop. Debt recovery procedures only apply to undisputed debts.

What to do:

  • Review their complaint
  • Provide evidence of work completed
  • Attempt to negotiate a settlement
  • If you can't agree, seek legal advice (this may be a breach of contract claim, not a debt claim)

Scenario 3: They Request More Time

If your client asks for more time to pay:

What to do:

  • Get it in writing
  • Agree a realistic payment plan
  • Continue charging interest until paid
  • Be clear that court proceedings will start if they miss the agreed date

Scenario 4: They Ignore It

If 14 days pass with no payment or response:

What to do: Start Small Claims Court proceedings.

Starting Small Claims Court Proceedings

If the LBA doesn't result in payment, your next step is the Small Claims Court (for debts under £10,000).

The Process:

  1. File your claim online at moneyclaim.gov.uk
  2. Pay the court fee (£35 to £455 depending on claim value—you can add this to your claim)
  3. Court serves the claim on your client
  4. Defendant has 14 days to admit, dispute, or ignore the claim
  5. If no response: You can request a default judgment (automatic win)
  6. If disputed: Case goes to a hearing (usually by telephone)

Court Fees:

Claim AmountCourt Fee
Up to £300£35
£300.01 - £500£50
£500.01 - £1,000£70
£1,000.01 - £1,500£80
£1,500.01 - £3,000£115
£3,000.01 - £5,000£205
£5,000.01 - £10,000£455

Important: You can add the court fee to your claim, so if your debt is £5,000, you can claim £5,000 + £205 court fee = £5,205.

Enforcing a Judgment

Winning your case is one thing—getting paid is another. If your client still doesn't pay after judgment, you can enforce using:

  1. Warrant of control - Bailiffs seize goods to sell
  2. Attachment of earnings - Money deducted from their wages
  3. Third-party debt order - Freeze their bank account
  4. Charging order - Secure the debt against their property

Common Mistakes to Avoid

1. Sending an LBA Too Early

Don't go straight to legal threats after one polite email. You'll damage the relationship unnecessarily. Send 2-3 reminders first.

2. Sending an LBA Too Late

Don't wait 6 months to send an LBA. The longer a debt is outstanding, the harder it is to recover. Act within 4-8 weeks of the due date.

3. Empty Threats

Never threaten court action if you're not prepared to follow through. If you send an LBA and then don't start proceedings, you lose all credibility.

4. Incorrect Amount

Double-check your calculations. Claiming the wrong amount of interest or compensation undermines your position.

5. Poor Record-Keeping

Keep copies of all invoices, contracts, delivery notes, emails, and reminders. You may need this evidence in court.

Preventing Late Payment

While an LBA is an effective debt recovery tool, prevention is better than cure:

  1. Credit check new clients - Use Companies House, credit reference agencies, or ask for references
  2. Set clear payment terms - "Payment due within 14 days" on every invoice
  3. Chase promptly - Send reminders within 7 days of the due date
  4. Build relationships - Get to know the accounts team, not just your project contact
  5. Consider upfront payment - Request 50% upfront for large projects or new clients

Automate Your Debt Recovery

Manually tracking due dates, calculating interest, writing LBAs, and sending reminders is time-consuming. NotPaidYet automates the entire process:

  • Escalating reminder sequence - From polite to formal over 28 days
  • Automatic interest calculation - Using the latest Bank of England base rate
  • Letter Before Action generation - Compliant with Pre-Action Protocol
  • Email delivery tracking - See when reminders are opened

Try NotPaidYet free for 7 days—no credit card required.

Summary: Letter Before Action Essentials

To recap, a Letter Before Action:

  1. Is legally required under the Pre-Action Protocol before starting court action
  2. Must give 30 days for the debtor to respond
  3. Should include debt details, amount claimed (with interest/compensation breakdown), deadline, and warning of court proceedings
  4. Often prompts payment without needing to go to court
  5. Must be sent by email and recorded delivery for proof

Next steps:

Don't let unpaid invoices drain your cashflow. A well-written Letter Before Action gets results.

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