You've sent reminders. You've chased politely. Your client still hasn't paid. Now it's time for the nuclear option: a Letter Before Action.

A Letter Before Action (LBA) is the last formal step before you file a county court claim. It's required under the Pre-Action Protocol for Debt Claims, and it's devastatingly effective. Most debts are paid within days of the debtor receiving one.

Here's exactly how to write one, what to include, and what happens after you send it.

What Is a Letter Before Action?

A Letter Before Action is a formal legal notice that tells your debtor:

It's not a threat. It's a legally required step. And it works because a County Court Judgment (CCJ) stays on the debtor's credit file for 6 years — which can destroy their ability to get mortgages, loans, business credit, and contracts.

What Your Letter Before Action Must Include

To comply with the Pre-Action Protocol, your LBA must contain:

  1. Your full name and address
  2. The debtor's full name and address
  3. The amount owed — original invoice amount
  4. How the debt arose — brief description of the work/services
  5. Statutory interest calculation — under the Late Payment of Commercial Debts (Interest) Act 1998
  6. Fixed compensation — £40, £70, or £100 depending on debt size
  7. Total amount now owed — original + interest + compensation
  8. A deadline of 30 days to respond
  9. Statement that court proceedings will follow if no response
  10. Information about free debt advice — you must mention organisations like StepChange or Citizens Advice

How to Calculate What You're Owed

Before writing your LBA, you need the exact figures. Under UK law:

Statutory Interest (2026)

The rate is 8% + Bank of England base rate. As of March 2026, the base rate is 3.75%, making the statutory rate 11.75% per annum.

Daily interest = Invoice amount × 11.75% ÷ 365

Example: A £5,000 invoice that's 60 days overdue:

Fixed Compensation

For the £5,000 example: £5,000 + £96.58 + £70 = £5,166.58 total owed.

Don't want to calculate this manually? Our free Late Payment Calculator does it instantly — enter your invoice details and get the exact figures in seconds.

Sample Letter Before Action Structure

Your LBA should follow this structure:

[Your Name/Business Name]
[Your Address]
[Date]

LETTER BEFORE ACTION — PRE-ACTION PROTOCOL FOR DEBT CLAIMS

Dear [Debtor Name],

I am writing to formally notify you that the sum of £[total] is now due and payable, and that if this matter is not resolved within 30 days, I intend to issue court proceedings without further notice.

[Details of the debt — invoice number, date, description of work]

[Breakdown: original amount + statutory interest + compensation = total]

Under the Late Payment of Commercial Debts (Interest) Act 1998, I am entitled to charge statutory interest at 11.75% per annum and fixed compensation of £[amount].

You have 30 days from the date of this letter to: (1) pay the full amount, (2) propose a payment plan, or (3) dispute the debt in writing with reasons.

If I do not receive a satisfactory response within 30 days, I will issue a claim through the County Court. A County Court Judgment may affect your credit rating for 6 years.

If you are experiencing financial difficulty, free debt advice is available from StepChange (0800 138 1111) or Citizens Advice (citizensadvice.org.uk).

Why Most People Don't Write Their Own LBA

Here's the problem: getting the legal language wrong, miscalculating the interest, or missing a required element can weaken your position if the case goes to court. The Pre-Action Protocol has specific requirements, and judges do check compliance.

That's why many freelancers and small business owners use a professionally drafted template — it ensures every legal requirement is met and the tone is exactly right.

After You Send the LBA: What Happens Next

Most likely outcome: They pay. The LBA works because the threat of a CCJ is real and serious. Most businesses — especially those who've been deliberately slow-paying — will settle once they see formal legal correspondence.

If they propose a payment plan: Consider it carefully. Getting paid in instalments is usually better than court proceedings. Make sure any agreement is in writing.

If they dispute the debt: They must explain why in writing. If their dispute has no merit, you can still proceed with court action.

If they ignore it: After 30 days, you can file a claim at Money Claim Online (moneyclaim.gov.uk) for debts under £100,000. Court fees start from £35 for claims up to £300, and you can add these to the amount you're claiming.

Don't Wait — Late Payments Get Harder to Recover Over Time

Every day you wait, the chance of recovery drops. The debtor may have cash now but not next month. Other creditors may be chasing them too. The limitation period for debt recovery in England and Wales is 6 years, but the sooner you act, the better your chances.

Start by calculating exactly what you're owed — interest and compensation included. Then follow the escalation process: friendly reminder → firm follow-up → final warning → Letter Before Action.