Letter before action for an unpaid invoice: what to include, deadlines and a free template

What a letter before action is

A letter before action, also called a letter before claim, is the last written demand you send before starting court proceedings. It states what is owed, why, and what you will do if it is not paid by a set date.

It is not a formality. The Practice Direction on Pre-Action Conduct expects the parties to exchange enough information to understand the claim and to try to settle it before going to court ^[2]. Very often, the letter alone gets the invoice paid.

Which rules apply: company or sole trader?

• Your customer is a limited company or LLP: follow the Practice Direction on Pre-Action Conduct. Give a reasonable deadline, normally 14 days for a simple unpaid invoice ^[2].
• Your customer is a sole trader, partnership or private individual: the Pre-Action Protocol for Debt Claims applies. You must give 30 days to reply and include the protocol's information sheet and reply form ^[1].
• In both cases, keep the tone factual. The letter may be shown to a judge later.

What to include

• Your business name, the customer's legal name and address.
• Each invoice: number, date, amount, due date and what was supplied.
• The total due, plus statutory interest and fixed compensation if the customer is a business and you choose to claim them ^[3].
• How to pay, and the exact date by which payment must arrive.
• That you will issue a court claim without further notice if it is not paid or disputed by that date.
• For sole traders and individuals: the information sheet, reply form and a statement that they can ask for time to pay ^[1].

Template (business customer)

Subject: Letter before action – invoice INV-1042 – £4,800.00

Dear [name], We supplied [goods/services] to [customer company] under invoice INV-1042 dated [date], payable by [due date]. Despite our reminders of [dates], £4,800.00 remains unpaid. Under the Late Payment of Commercial Debts (Interest) Act 1998, we are also entitled to statutory interest of 8% above the Bank of England base rate and fixed compensation of £70 ^[3].

Please pay £[total] to the account shown on the invoice by [date, 14 days from today]. If you dispute any part of this sum, tell us in writing by the same date with your reasons. If we receive neither payment nor a reasoned reply, we will issue a claim in the County Court without further notice, and will ask the court to order you to pay our costs and interest. Yours sincerely, [name, role]

How to send it and what happens next

Send it by email and by first-class or recorded post to the registered office (for a company) or the trading address. Keep proof of the date sent.

If the deadline passes with no payment, you can start a claim online through Money Claim Online for claims up to £100,000 ^[4]. If the customer replies with a genuine dispute, deal with it first: a court will look at whether you tried to resolve it.

Avoid reaching this stage

Most invoices that end in a letter before action had no clear reminders in the first weeks. Regular, polite reminders from the due date, with a simple way to pay, keep the majority of invoices from ever needing one.

Frequently asked questions