How to Deal with Late Paying Clients in the Trades

Late payment is the single biggest cash flow problem for tradespeople in the UK. You do the work, you send the invoice, and then you wait. And wait. Meanwhile, you have already paid for materials, your van payment is due, and HMRC wants their tax. It is stressful, it is unfair, and it happens far too often.

This guide covers how to prevent late payment in the first place, what to do when a customer does not pay on time, and your legal options when all else fails.

Prevention: Stop Late Payment Before It Starts

Set clear payment terms upfront

Your quote should clearly state your payment terms before the customer agrees to the work. This includes deposit requirements, stage payment milestones (for larger jobs), final payment timing, and accepted payment methods. When the customer signs your quote, they are agreeing to these terms. Read our professional quote template guide for what to include.

Take deposits

For any job over 500 pounds, take a deposit. Typically 10 to 25 percent of the total price, payable on acceptance of the quote. This secures your diary slot, covers initial material purchases, and demonstrates the customer's commitment. Customers who refuse to pay a deposit are a red flag.

Use stage payments on larger jobs

For jobs over 2,000 to 3,000 pounds, use stage payments. For example: 20 percent deposit, 30 percent at end of first fix, 30 percent at end of second fix, 20 percent on completion. This limits your financial exposure at any point during the project.

Invoice on the day

Send your final invoice on the day you complete the work, not a week later. The customer is most satisfied with your work on the day you finish, and they have the visual reminder of what they are paying for. Every day you delay invoicing is a day added to your payment timeline. Use our invoice generator to create invoices on site from your phone.

Chasing Late Payments

Week 1: Friendly reminder

After your payment terms expire (typically 7 to 14 days after invoice), send a friendly reminder. Keep it polite and assume the best. "Hi, just a quick reminder that invoice INV-047 for 1,250 was due on 1st March. Could you let me know when payment will be made? Happy to resend the invoice if needed."

Week 2: Firmer follow-up

If no response after the first reminder, follow up by phone. A phone call is harder to ignore than an email. Be firm but professional. "I have not received payment for the plastering work completed on 15th February. The invoice was due on 1st March and is now two weeks overdue. Can we arrange payment today?"

Week 3-4: Formal letter

If phone calls and emails are being ignored, send a formal letter (ideally by recorded delivery) stating the amount owed, the original due date, that you have attempted to contact them, and that you will consider further action if payment is not received within 7 days.

After 30 days: Statutory interest

Under the Late Payment of Commercial Debts (Interest) Act 1998, you can charge statutory interest of 8 percent above the Bank of England base rate on late commercial payments. You can also charge a fixed sum of 40 to 100 pounds (depending on the debt size) as compensation. This applies mainly to business-to-business payments rather than domestic customers, but it is worth knowing.

Legal Options for Recovering Debts

Letter before action

A formal legal letter (sometimes called a letter before claim) sent by you or a solicitor, stating that you intend to commence legal proceedings if the debt is not paid within 14 days. Many debtors pay at this stage because they do not want the hassle and cost of court proceedings.

Small claims court

For debts up to 10,000 pounds, you can make a claim through the small claims court (Money Claims Online at gov.uk). The filing fee depends on the claim amount: 35 to 455 pounds. You do not need a solicitor. The process is straightforward and most cases are resolved without a hearing. If you win, the court orders the debtor to pay and you can enforce the judgment.

Mediation

The court may suggest mediation before a hearing. This is a free service where an independent mediator tries to help you and the debtor reach an agreement. Many disputes are resolved through mediation.

Debt recovery agencies

Debt recovery agencies will chase the debt on your behalf for a percentage (typically 10 to 15 percent of the recovered amount). They know the legal procedures and can be effective, but they cost money and may not be worthwhile for small debts.

Red Flags: Customers Who Might Not Pay

• Reluctant to pay a deposit
• Vague about their budget or repeatedly try to negotiate the price down
• Want work to start immediately without a written quote or agreement
• Have a history of disputes with previous tradespeople (check online reviews of the property address)
• Keep changing the scope of work without discussing costs
• Are difficult to contact or slow to respond to messages

Trust your instincts. If something feels off during the quoting process, it is usually better to walk away than to risk doing work you will not get paid for.

Protecting Yourself with Proper Documentation

Good paperwork is your best protection against payment disputes:

• Written quote: With clear scope, price, and payment terms, signed by the customer
• Variation records: Any changes to the scope agreed in writing (even a text message or email is better than nothing)
• Progress photos: Photographic evidence of the work at each stage
• Completion sign-off: Customer confirmation that the work is complete and satisfactory
• Invoices: Properly formatted with correct details (see our invoice template guide)

Frequently Asked Questions

Can I charge interest on late payments?

For commercial (business-to-business) debts, yes. The Late Payment of Commercial Debts Act allows 8 percent above base rate plus a fixed compensation amount. For domestic customers, you can only charge interest if it was included in your terms and conditions that the customer agreed to.

How long should I wait before taking legal action?

Give the customer at least 30 days after the invoice due date, including multiple attempts to contact them. Send a formal letter before action giving 14 days notice. If there is still no payment, file a claim through the small claims court.

Can I remove work I have done if the customer does not pay?

Generally, no. Once work is installed in a customer's property, it becomes their property. Removing it could be considered criminal damage. The legal route for recovering money owed is through the courts, not by undoing your work.

Should I stop work on a job if stage payments are not being made?

Yes. If your contract includes stage payments and the customer misses a payment, you are entitled to stop work until payment is received. Continuing to work while owed money increases your financial exposure.