Late Payment Letters and Statutory Interest Claim (Business Clients)

A sequence of late payment letters to business clients – reminder, statutory interest and compensation claim under the Late Payment of Commercial Debts (Interest) Act 1998, final demand, and a letter before action – with an interest calculation sheet.

Editable Word document
7
10pages
Guidance notes included
aml consultancy solutions

Freelancers & contractors

Late Payment Letters and Statutory Interest Claim (Business Clients)

About this document

What it’s for

Late payment is one of the biggest problems facing freelancers. When you invoice a business, the law gives you the right to claim statutory interest and fixed compensation on late payments, even if your contract does not mention it. These letters help you chase firmly but professionally and escalate if needed.

When to use it

  • When a business client has not paid by the due date
  • To claim statutory interest and compensation
  • Before starting a small claim or using a debt collector

What’s inside

The document is laid out in the sections below. Each one comes with a plain-English guidance note explaining what it does and what to change.

  • Letter 1 – Overdue reminder
  • Letter 2 – Statutory interest and compensation
  • Letter 3 – Final demand
  • Letter 4 – Letter before action
  • Part 5 – Interest calculation sheet

How to complete it

  • Calculate the interest and compensation using the sheet in Part 5
  • Send the letters in order, keeping copies and proof of sending
  • Before issuing a claim, follow the Practice Direction on Pre-Action Conduct and allow a reasonable time to respond (usually 14 days for a business)

Key points to check

  • For individual (consumer or sole trader) debtors, use the Pre-Action Protocol for Debt Claims, which has stricter requirements
  • The government has announced reforms to late payment law – check for changes to maximum payment terms and interest

Our templates are professionally structured starting points for UK businesses, not legal advice. For anything complex, unusual or high-value, have your final version checked by a solicitor.

Included in the pack

Freelancers & contractors

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Editable Microsoft Word files

Guidance notes in every document

Written for UK businesses

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