Letter Before Action for Unpaid Invoice (UK Template 2026)

Market Invoice is an independent UK invoice finance comparison site that ranks 89 UK invoice finance providers.

A letter before action is the formal final notice you send a UK customer 14 to 30 days before issuing court proceedings for an unpaid invoice. It must state the amount owed, the invoice reference, the contractual or statutory interest claimed (Late Payment of Commercial Debts Act 1998, currently 11.75% APR plus £40 to £100 fixed compensation), and a clear deadline for payment. UK courts expect this letter under the Pre-Action Conduct Practice Direction, and most B2B unpaid invoice disputes settle at this stage without going to court.

Last updated: 8 May 2026.

The 11.75% statutory rate reflects the Bank of England base rate of 3.75% (effective 18 December 2025) plus 8 percentage points. Check the current base rate before sending: the rate at the date the debt fell due is the one that applies.

A letter before action is the formal final notice you send a UK customer 14 to 30 days before issuing court proceedings for an unpaid invoice, stating the amount owed, the statutory interest claimed (currently 11.75% APR) and a clear payment deadline. More detail + scope

Summary

A letter before action is the formal final notice you send a UK customer 14 to 30 days before issuing court proceedings for an unpaid invoice. It must state the amount owed, the invoice reference, the contractual or statutory interest claimed (Late Payment of Commercial Debts Act 1998, currently 11.75% APR plus £40 to £100 fixed compensation), and a clear deadline for payment. UK courts expect this letter under the Pre-Action Conduct Practice Direction, and most B2B unpaid invoice disputes settle at this stage without going to court.

This page covers

letter before action for unpaid invoices in the UK: template, timing, statutory interest claim, and what to do if it's ignored

Not covered here

General invoice finance education (see /guides/), individual provider reviews (see /providers/), full pricing breakdown (see /guides/costs/)

AP

Adam Parker

Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd

Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.

Last reviewed: 30 July 2026

Get 3 Quotes Matched to Your Business

Free, no obligation, 60 seconds.

Step 1 of 3 · Your business

Start typing and we'll search Companies House.

Your details are secure. See our privacy policy.

Free · No obligation · 24-hour indicative quotes

How we make money: Market Invoice is an independent comparison service, not a lender. If you take a facility after we introduce you, the provider pays us a commission; you never pay us and it is never added to your costs. How we are funded.

Letter Before Action UK FAQ

What is a letter before action for an unpaid invoice?

A formal letter giving a UK debtor a final 14 to 30 day deadline to pay before you file court proceedings. Required by the Pre-Action Conduct Practice Direction. Must state the amount owed, invoice reference, statutory or contractual interest claimed, and a clear deadline. Failure to send one before issuing court proceedings can result in cost penalties even if you win.

What should a letter before action include?

Date, your business name and address, the debtor's name and registered address, full amount owed, invoice numbers and dates, statutory late payment interest claimed (11.75% APR), fixed compensation under Late Payment of Commercial Debts Act 1998 (£40, £70 or £100 by debt size), the deadline for payment (14 days standard, 30 days for larger commercial disputes), a clear statement that you will issue court proceedings if no payment is received, and your contact details for settlement.

How long should I give in a letter before action?

Standard B2B commercial: 14 days. Larger or more complex disputes: 30 days. Disputes involving unrepresented individuals: 30 days minimum (Pre-Action Conduct Practice Direction).

Can I send a letter before action by email?

Yes, email is sufficient if you can prove receipt (read receipt, reply, or evidence the email address is monitored). Best practice: send by both email and signed-for post. Keep proof of delivery for any future court bundle.

What if the customer ignores the letter before action?

You have three options: (1) issue a money claim online at moneyclaim.gov.uk for under £100,000 (court fee £35 to £455 depending on debt size); (2) file a statutory demand if the debt is over £750 (£90 fee, can lead to winding-up petition); (3) sell the invoice to a spot factoring provider with debt recovery built in (Hydr, Kriya). Most letter-before-action recipients pay within the deadline once they realise court action is genuinely imminent.

Do I need a solicitor to send a letter before action?

No. You can write and send it yourself. Many businesses do. A solicitor letter on legal headed paper sometimes prompts faster payment but costs £100 to £400. For invoices under £5,000, DIY is usually proportionate. For invoices over £25,000 or complex disputes, instructing a debt recovery solicitor pays for itself in faster recovery and stronger evidence trail.