Customer not paying your invoice? What tradespeople can do

Your legal position depends entirely on who you are chasing. The rules below only apply automatically to a business debt. A homeowner and a public body are both different, and mixing them up will cost you time.

Check your paperwork now and confirm who actually signed it: a private individual, a limited company, a sole trader, a partnership, or a public body such as a council or an NHS trust.

Do these before you chase anyone further. They cost nothing and they strengthen every option below.

• ▸Check the invoice itself: correct customer name and address, correct amount, a clear due date.
• ▸Check your payment terms. What did you actually agree, and where is that written down?
• ▸Gather your evidence: signed quote or contract, messages agreeing the price or the work, photos, sign-off from the customer.
• ▸Send a short, polite, dated written chase as soon as payment is late. Email is fine. State the invoice number, the amount and the due date.
• ▸If that gets nothing, send a formal written reminder. State the amount owed, the original due date, and what you will do next if it is not paid.

If you and the customer were both acting as a business, the Late Payment of Commercial Debts (Interest) Act 1998 gives you the right to charge statutory interest and claim a fixed compensation fee. This applies automatically. You do not need it written into your contract.

Statutory interest is the Bank of England base rate plus 8%. The calculation uses the base rate confirmed on 31 December for debts due between January and June, or the rate confirmed on 30 June for debts due between July and December. It is simple interest, not compounded.

On top of interest, you can claim a fixed sum once the debt is late: £40 for a debt under £1,000, £70 for a debt from £1,000 up to £9,999.99, and £100 for a debt of £10,000 or more. If your actual recovery costs are higher than that, you can claim the difference too.

A worked example: a £2,400 invoice, 45 days overdue, with the base rate at 3.75% (checked 12 August 2026), gives a statutory rate of 11.75%. That works out at roughly 77 pence a day, or about £34.77 over 45 days. Add the £70 fixed sum for a debt in that band, and you are owed about £104.77 on top of the original invoice.

Your contract can offer different terms instead of the statutory default, but only if what it offers is genuinely fair and adequate. A token clause that leaves you worse off does not remove your statutory right.

The 1998 Act only covers contracts where both sides are acting as a business. A homeowner paying you to fit a kitchen or reroof a house is not acting as a business, so the automatic interest and fixed fee described in "If a business owes you" above do not apply to that debt.

You can still charge interest if your contract or terms and conditions say so. If it ends up in court in England or Wales, a judge has discretion to add interest under the County Courts Act 1984. GOV.UK's own guide for working out interest on this kind of claim usually uses 8% a year and calculates it based on the number of days the debt has been overdue, but this is not automatic. It is awarded at the court's discretion, and exactly what you get depends on your specific claim.

Everything else is the same. Chase in writing, keep your evidence, and use the small claims track if it comes to that. See "If they still will not pay" below.

Councils, NHS bodies and central government count as a business for the purposes of the 1998 Act, so the statutory interest and fixed fee described in "If a business owes you" apply if a public body pays you late.

Public contracts also carry their own 30 day payment rule. Under the Procurement Act 2023, in force since 24 February 2025, a public contract must include a maximum 30 day payment term for undisputed invoices, and that term has to be passed down the supply chain, including to subcontractors. This core regime covers contracting authorities in England, Wales and Northern Ireland.

Scotland is different. The Procurement Act 2023 does not cover general devolved Scottish public procurement. It only applies to Scottish contracting authorities that are cross-border bodies or exercise reserved functions. If the public body you work for is a devolved Scottish authority, check the applicable Scottish procurement rules separately rather than assuming the 30 day rule above applies.

If you are a subcontractor on a public project, check whether that 30 day term has actually been written into your own contract with the main contractor. The rule works through the contract chain. It does not pay you directly.

Where you go next depends on who owes you, how much, and which UK nation you are claiming in. Court claims work differently in England and Wales, Scotland, and Northern Ireland. Do not assume the England and Wales route applies everywhere.

• ▸For a qualifying business debt, the Small Business Commissioner reviews complaints free of charge if you have fewer than 50 employees and the business that owes you has 50 or more. This is a UK-wide service. It can currently make recommendations, but it cannot force payment.
• ▸Mediation is worth considering for any debt. It is usually faster and cheaper than court, and you do not need a solicitor.
• ▸In England and Wales, you can usually make a money claim online through GOV.UK. If a claim of £10,000 or less is defended, it will generally follow the small claims process, which may include mediation, rather than a full trial, though this depends on the court and the circumstances. See the fee table below.
• ▸In Scotland, use Simple Procedure for a claim of £5,000 or less. Above £5,000, the Ordinary Cause procedure applies instead. Start at mygov.scot or the Scottish Courts and Tribunals Service.
• ▸In Northern Ireland, small claims cover up to £5,000. Above that, you may need to issue a civil bill in the County Court, up to £30,000. Start at nidirect.
• ▸In England and Wales, if the customer who owes you is an individual or a sole trader rather than a limited company, the Pre-Action Protocol for Debt Claims applies before you can issue a claim. Send a Letter of Claim and give them 30 days to respond. This specific protocol does not apply to an ordinary debt between two companies, but a clear written warning before court action is still good practice everywhere, and a court will generally expect to see that you tried first.
• ▸What happens next under the protocol depends on how they respond. If they ask for copies of documents or say they are getting debt advice, you generally need to allow a further period, often another 30 days, before proceeding. If they do respond but you cannot reach an agreement, give them at least 14 days' written notice before issuing a claim. If they do not respond at all within the 30 days, you can generally move towards issuing a claim, provided you have met the protocol's other requirements and allowed time for a reply that may still be in the post.

The Commercial Payments Bill was introduced in the House of Lords in May 2026 and had its second reading on 9 June 2026. Committee stage in the House of Lords completed on 21 July 2026. As checked on 12 August 2026, Report stage is next and had not yet been scheduled, followed by third reading in the Lords, then all stages in the House of Commons, then Royal Assent. The government has said it will allow a lead in time before any changes take effect, but has not published an exact date for that.

• ▸A maximum 60 day payment term for most business to business contracts.
• ▸Making the base rate plus 8% statutory interest compulsory, removing the ability for a contract to offer a lower rate instead.
• ▸A new fixed sum owed to a supplier if a customer disputes an invoice late, or without giving enough detail.
• ▸A ban on withholding retention payments under construction contracts. Implementation timing is still subject to consultation.
• ▸Wider powers for the Small Business Commissioner, including investigating persistent late payers, financial penalties, and a formal adjudication process, instead of today's recommendations only.

Retention is money a main contractor holds back from a subcontractor, typically 3% to 5% of the contract value, to cover any defects. The government's own consultation describes the usual pattern as half released at project completion, and the other half released after a defects liability period that typically runs 12 to 24 months. Under current contracts, this is normal practice and lawful.

The Commercial Payments Bill proposes to prohibit withholding retention payments under construction contracts. As checked on 12 August 2026, this is still a proposal. It has not been implemented, and the timing has not been fixed.

This page explains general rules as checked against the sources below on 12 August 2026. It is not legal advice, and it cannot tell you what a court will decide in your specific case. That depends on your contract, your evidence and the circumstances, none of which are known here.

The Bank of England base rate reference figures used in the calculator above were correct as checked on 12 August 2026, and cover debts due from 1 January 2024 to 31 December 2026. Rates from 1 January 2027 onwards were not yet set when this was checked. Use the official Small Business Commissioner calculator to check the current rate or to calculate a debt outside that range.

If your situation involves insolvency, a dispute already in progress, or a contract that says something different from the general rules here, get advice from a solicitor or a free service such as Citizens Advice before you act.