Free Letter Before Action Template
A letter before action (LBA) is the formal final demand you send before starting court proceedings to recover an unpaid invoice. It should set out your details and the debtor's, the invoice number, date and amount, what it was for, the sum now due including any statutory interest and compensation, how to pay, a firm deadline (commonly 14 days), and a plain statement that you may issue a claim if payment is not received. If your debtor is an individual or sole trader the Pre-Action Protocol for Debt Claims applies and you must allow 30 days plus enclose the required forms. Copy the free template below; no email required.
Last updated: 30 July 2026. Protocol scope and requirements checked against the Pre-Action Protocol for Debt Claims (justice.gov.uk) on 30 July 2026.
A letter before action (LBA) is a formal written notice that you will start court proceedings to recover a debt unless it is paid by a stated deadline. It must set out the parties, the invoice number, date, amount and what it was for, the due date, a breakdown of the sum now due including any statutory interest and fixed compensation, how and where to pay, a firm deadline, and a statement that a court claim may follow. The Pre-Action Protocol for Debt Claims applies where a business claims a debt from an individual or sole trader (30-day response, plus an Information Sheet, Reply Form and Financial Statement); it does not apply to business-to-business debts where the debtor is a limited company, though the Practice Direction on Pre-Action Conduct still expects a clear letter and an attempt to settle. More detail + scope
Summary
This page provides a free copyable UK letter before action template for chasing an unpaid B2B invoice, and explains when the Pre-Action Protocol for Debt Claims applies (debtor is an individual or sole trader, 30-day response, required forms) versus a debt owed by a limited company (protocol does not apply, but the Practice Direction on Pre-Action Conduct and Protocols does, and 14 days is the common deadline). It covers the statutory interest and fixed compensation available on commercial debts under the Late Payment of Commercial Debts (Interest) Act 1998, what the letter must contain, what happens after the deadline, and how invoice finance releases the cash tied up in an invoice rather than waiting on a court timetable.
This page covers
UK letter before action template for unpaid invoices: what an LBA is, required contents, the Pre-Action Protocol for Debt Claims scope (individual and sole-trader debtors) versus business-to-business debts owed by companies, statutory late-payment interest and compensation, response deadlines, and how invoice finance relates to chasing debt
Not covered here
The credit note template (see /tools/credit-note-template/), the invoice template (see /tools/invoice-template/), statutory late-payment interest detail (see /questions/late-payment-interest-invoice-finance/), issuing a statutory demand (see /questions/statutory-demand-debtor-invoice-finance/), and the wider unpaid invoices hub (see /unpaid-invoices/)
The template
Copy it straight into a document or email. Square brackets mark the fields to replace. Keep a dated copy and proof of sending, because if the matter reaches court you will need to show the debtor had a fair chance to pay.
LETTER BEFORE ACTION [Your company name] [Your address] [Email] [Phone] [Date] To: [Debtor name / company name] [Debtor address] Dear [name], RE: Overdue invoice [invoice number], amount due GBP [0.00] We refer to invoice [number] dated [invoice date] for GBP [0.00], raised for [goods or services supplied]. Payment was due on [due date] and remains outstanding. Despite our reminders on [dates], this invoice is unpaid. The sum now due is: Invoice [number] GBP [0.00] Statutory late-payment interest GBP [0.00] Statutory compensation (fixed sum) GBP [0.00] Total now due GBP [0.00] We require payment of the full amount within [14] days of the date of this letter, that is by [deadline date]. Please pay to: [Bank name] Sort code: [00-00-00] Account: [00000000] Reference: [invoice number] If we do not receive payment, or a proposal to settle that we accept, by the deadline above, we may begin court proceedings to recover the debt without further notice. That may add court fees, interest and legal costs to the amount you owe, and any county court judgment may affect your credit rating. This is a formal letter before action. We would rather resolve this without going to court and remain willing to discuss payment if you contact us before the deadline. Yours [faithfully / sincerely], [Name] [Position], [Company name]
When the Pre-Action Protocol for Debt Claims applies
Who your debtor is decides which rules bite. The Pre-Action Protocol for Debt Claims applies to any business claiming payment of a debt from an individual, including a sole trader. It does not apply to business-to-business debts unless the debtor is a sole trader. So:
- Debtor is a sole trader or individual: the protocol applies. You must give 30 days to respond, and send the letter of claim with an Information Sheet, a Reply Form and a Financial Statement form. Court can penalise you on costs if you skip these steps.
- Debtor is a limited company: the debt protocol does not apply. The Practice Direction on Pre-Action Conduct and Protocols still applies, so you must exchange enough information for the debtor to understand the claim and give them a reasonable chance to settle. A clear letter before action with a 14-day deadline is the standard first step.
Either way the aim is the same: put the debt beyond argument and give a genuine chance to pay before you spend money on a claim. A rushed or missing letter before action is the most common reason a straightforward debt claim runs into costs trouble.
Interest and compensation you can add
On a commercial (business-to-business) invoice, the Late Payment of Commercial Debts (Interest) Act 1998 lets you claim statutory interest at 8% above the Bank of England base rate plus a fixed compensation sum of GBP 40, GBP 70 or GBP 100 depending on the size of the debt, unless your contract provides a substantial alternative remedy. Show the interest and the fixed sum as separate lines in the letter so the total is transparent. Our guide to statutory late-payment interest and the current late-payment interest rate show how to work out the figures.
“Most unpaid invoices are not disputes, they are cash-flow decisions the debtor is making at your expense. A vague reminder invites another delay. A properly built letter before action, with the exact sum, the statutory interest and fixed compensation added, a firm deadline and a real intention to issue, changes the debtor's calculation because your invoice is now the expensive one to ignore. The mistake I see is bluffing: threatening court in three letters and never issuing teaches the debtor the threat is empty. Send one clean, final letter before action, mean it, and be ready to file on the deadline.”
After the deadline: judgment versus cash now
If the deadline passes with no payment and no accepted proposal, you can issue a claim, for many invoices through Money Claim Online. Before you do, ask the harder question: can this debtor actually pay? A judgment against a company with no assets recovers nothing but the court fee you spent getting it. If the debtor is genuinely insolvent, escalation routes such as a statutory demand may apply, but they are a pressure tool, not a magic recovery.
This is often where the cash-flow problem, not the legal one, becomes the priority. See the unpaid invoices hub for the full escalation ladder, from reminder to letter before action to court.
The debtor is the asset: how this ties to invoice finance
Chasing recovers one invoice slowly; invoice finance releases the cash across your whole debtor ledger now. Under factoring or invoice discounting a provider advances typically 70-90% of an invoice's value within a day or two of you raising it, with the balance (less fees) released when the customer pays, so you are not funding your business on the debtor's payment timetable in the first place.
Factoring facilities usually include a credit-control and collections service, so the provider chases on your behalf, and some add bad-debt protection that covers you if a debtor becomes insolvent. A clean invoice, backed by the paperwork a letter before action relies on (a verifiable supply, clear terms, a firm due date), is also the invoice that funds without query. If you are weighing the cost of waiting against the cost of finance, our costs guide sets out the numbers.
Companion templates
- Invoice template: get the original invoice right so the debt is beyond argument.
- Credit note template: to correct or reduce an invoice you have already issued.
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.
Last reviewed: 30 July 2026