Letter before action template for unpaid invoices

Based on the Pre-Action Protocol for Debt Claims, paragraphs 1 and 3 · Reviewed November 2026

A letter before action tells a customer that you will start a court claim if an invoice stays unpaid. It sets out the debt and gives a last date to pay or reply.

What it includes

Your business name and address
Customer name and address
Invoices with dates and amounts
Interest and fixed compensation
Total owed
Date to pay or reply
Payment details
Signature

Letter before action: full text

[Your business name]
[Address]

[Date]

[Customer business name]
[Address]

LETTER BEFORE ACTION

Dear [name],

Unpaid invoice [number] for [amount]

I write about the invoice below, which remains unpaid despite earlier reminders:

Invoice [number]   dated [date]   due [date]   [amount]
Statutory interest from [date] at [rate]%       [amount]
Fixed compensation                               [amount]
Total now owed                                   [total]

Please pay [total] by [date] to [bank name], sort code [00-00-00],
account [number], reference [invoice number].

If you dispute any part of this amount, please tell me in writing by the same date
and explain why. Copies of the invoice and the reminders are attached.

If I receive neither payment nor a reply by [date], I intend to start a court claim
for the amount above without further notice.

Yours sincerely,

[Your name]
[Position]

When it is the right step

It comes after reminders and a final demand went unanswered.

This template is for invoices between businesses or for services already delivered.

Consumer credit agreements follow their own rules and are out of scope here.

An invoice is well past due and the customer stopped replying.
A payment plan was agreed and then broken.
The customer accepted the work and gave no reason not to pay.

What the letter must make clear

Point	Where it goes in the letter
Who is owed and who owes	Header and first paragraph
The invoices and the total	A short table of invoices
How the total is made up	Principal, interest and costs on separate lines
A date to pay or reply	Its own paragraph, with the exact date
What happens next	The court claim if there is no answer
How to pay	Bank details and a payment reference

Courts expect both sides to try to settle before a claim. A clear letter with documents attached shows that effort.

When the customer is a sole trader

The Pre-Action Protocol for Debt Claims covers a business claiming from an individual, and that includes a sole trader. A debt owed by a limited company is outside it.

Send the letter by post, dated near the top of the first page, and by email too if you have the address.
State the amount, whether interest or charges keep running and how the customer can pay.
Enclose an up-to-date statement of account, the protocol's Information Sheet and Reply Form, and a Financial Statement form.
Wait 30 days from the date on the letter before starting a claim.

The template works for both cases. For a sole trader, add the enclosures and the 30 days.

Interest and compensation

Between businesses the Late Payment of Commercial Debts (Interest) Act 1998 adds statutory interest.

The Act also adds a fixed sum of £40, £70 or £100 depending on the debt.

The late payment interest calculator works out both figures for the letter.

A letter worked out

Harper Joinery Ltd invoiced Northgate Builders £2,400.00 on 1 August. Payment was due on 31 August.

Two reminders and a final demand got no answer. On 3 November Harper sends a letter before action.

Line	Amount
Invoice INV-0117	£2,400.00
Statutory interest at 11.75% from 1 September	£49.44
Fixed compensation	£70.00
Total	£2,519.44

The letter gives a date to pay or to explain any dispute.

Common mistakes

Sending it before any reminder.
No copies of the invoices attached.
A total that mixes interest into the principal.
Threats that go beyond the court claim.
Sending it to a consumer under business rules.

Field by field

Customer: the exact registered name, such as Northgate Builders Ltd. Check it on Companies House before sending.
Address: the registered office or the address on the contract. A letter to a closed site may never arrive.
Invoices: one line per invoice with its number, date, due date and amount. Attach a copy of each one.
Interest: the rate, the start date and the amount on its own line. Never fold it into the principal.
Compensation: the fixed sum for each invoice on a separate line. Keep it apart from interest and costs.
Date to pay or reply: an exact day such as 24 November 2026. Phrases like «shortly» weaken the letter.
Next step: one sentence saying a court claim follows. Avoid any threat beyond that step.

Variants for other situations

These versions change one paragraph of the same letter.

Broken payment plan: «You agreed on [date] to pay [amount] each month. The payments due on [dates] did not arrive.»
Several invoices: «The invoices listed below total [amount] and all are past their due dates.»
Disputed work: «You raised no complaint about the work when it was delivered on [date].»
Part payment received: «I received [amount] on [date]. The balance of [amount] remains unpaid.»

What to do with the reply

Reply	Next step
Full payment	Send a payment acknowledgement and close the file
An offer to pay in parts	Agree the dates in writing and record each payment
A dispute about the work	Ask for details and documents before any claim
No reply by the date	Decide whether to start the court claim

Keep a note of every call and message after the letter goes out.

Sending it with proof

Send the letter by email and by post to the registered address.

Keep a copy of the email and the proof of postage.

A court may later ask when the customer received the letter.

Write the sending date and the method on your own copy of the letter.

File it with the invoices, the reminders and any reply from the customer.

Let the reminders go out on their own

Most invoices never reach this letter when the reminders start early. Makatea sends them on WhatsApp and email from the due date. Try it free for 14 days, no card needed.

Free on Makatea: promissory note template · rent receipt template · free invoice generator

Frequently asked questions

What is a letter before action?

It is the last letter before a court claim. It sets out the debt and gives a date to pay or reply.

Do I need a solicitor to send one?

No. A business can send its own letter. Larger claims benefit from legal advice.

Can I add interest to the letter?

Yes, between businesses. The 1998 Act allows statutory interest and a fixed sum per invoice.

Does this template work for consumer debts?

No. It is written for business invoices and services already delivered.

Is a letter before claim the same as a letter before action?

Yes. Both names describe the last letter sent before a court claim.

What should I attach to a letter before action?

Attach copies of the invoices, the earlier reminders and any order or contract behind the work.

How long should I give the customer to reply?

For a sole trader the protocol gives 30 days from the date on the letter. Between companies, many businesses allow two to four weeks.

Is this template legal advice?

No. It is a starting point for your own letter.

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