Statutory Demand for Unpaid Invoice (UK 2026)

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A statutory demand is a formal pre-insolvency notice you can serve on a UK company (Form 4.1) or sole trader (Form 6.1) when an undisputed debt is unpaid: £750 or more for companies, £5,000 or more for sole traders and other individuals. The recipient has 21 days to pay, settle, or challenge the demand. If they ignore it, you can present a winding-up petition (companies) or a bankruptcy petition (sole traders); court fees and a petition deposit apply on top of any solicitor costs, so check the current amounts on gov.uk before proceeding. Statutory demands are powerful but high-risk: they can be set aside if there's any genuine dispute about the debt, and the court can order costs against you if used inappropriately. Use only when the debt is undisputed and the debtor has the means to pay.

Last updated: 8 May 2026.

A statutory demand is a formal pre-insolvency notice you can serve on a UK company (Form 4.1) or sole trader (Form 6.1) when an undisputed debt is unpaid: £750 or more for companies, £5,000 or more for individuals. The recipient has 21 days to pay, settle, or challenge the demand. More detail + scope

Summary

A statutory demand is a formal pre-insolvency notice you can serve on a UK company (Form 4.1) or sole trader (Form 6.1) when an undisputed debt of £750 or more is unpaid. The recipient has 21 days to pay, settle, or apply to set the demand aside. If they ignore it, you can present a winding-up petition (companies, £2,008 court fee plus £750 to £1,500 solicitor cost) or bankruptcy petition (sole traders, £302 fee).

Statutory demands are powerful but high-risk: they can be set aside if there's any genuine dispute about the debt, and the court can order costs against you if used inappropriately. Use only when the debt is undisputed and the debtor has the means to pay.

This page covers

statutory demand for unpaid invoice UK: when to use, costs, risks, timeline and the alternative of selling the invoice

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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

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Statutory Demand UK FAQ

What is a statutory demand?

A formal notice under the Insolvency Act 1986 that warns a UK debtor you intend to start insolvency proceedings if they don't pay an undisputed debt of £750 or more (companies) or £5,000 or more (individuals). The debtor has 21 days to pay, agree settlement terms, or apply to court to set the demand aside.

Can I use a statutory demand for any unpaid invoice?

Only if the debt is undisputed. If the debtor disputes the work, the price, or any element of the invoice, the demand can be set aside by the court and you may have to pay their legal costs. Use a letter before action and small claims court instead for any genuinely disputed amounts. Statutory demands are designed for clear-cut, admitted, unpaid commercial debts.

How much does a statutory demand cost?

Drafting: free if DIY, £150 to £500 if a solicitor drafts it. Service: £80 to £200 if a process server is used. Total typical cost £200 to £700 to serve. If the debtor doesn't pay within 21 days, the next step is a winding-up petition (£2,008 court fee plus £750 to £1,500 solicitor cost for a company) or bankruptcy petition (£302 fee plus £750 deposit for an individual).

What happens after the 21 days expire?

If the debt remains unpaid and unchallenged, you can present a winding-up petition (for a company) or bankruptcy petition (for a sole trader). The petition is advertised in the London Gazette, which usually triggers immediate payment because it freezes the debtor's bank accounts and warns other creditors. About 70% of statutory demands are paid before petition stage.

Can a statutory demand be set aside?

Yes. An individual debtor can apply to court within 18 days to set the demand aside (a company instead applies to restrain presentation of a winding-up petition) on three main grounds: (1) the debt is genuinely disputed on substantial grounds, (2) the debt is for less than £750, or (3) the debtor has a counterclaim or set-off equal to or greater than the debt.

If set aside, the court usually orders the creditor to pay the debtor's legal costs (£1,000 to £5,000). High-risk for any disputed debt.

Statutory demand vs spot factoring for unpaid invoice?

Statutory demand: high pressure, high risk, no money for 21 to 90 days, and only works if debt is undisputed and debtor solvent. Spot factoring (Hydr, Kriya, Triver): 70 to 90 percent of invoice value within 24 hours, the factor takes over chasing, and on non-recourse facilities the factor absorbs the bad debt risk. If you need cash now and the debtor relationship is preserved, factor first. If you need to make a point and the debtor has stalled despite multiple notices, statutory demand.