What to Do If a Customer Refuses to Pay

ByTradeStack HQ

Most tradespeople will face this situation at some point. You’ve done the work, done it well, and the customer simply won’t pay. Whether it’s a dispute over quality, a customer who’s gone quiet, or someone who’s openly refusing, it’s one of the most stressful situations in running a trade business.

The good news is you have options. There’s a clear process for recovering unpaid invoices in the UK and the law is generally on your side if you’ve done the work you agreed to do.

This guide walks you through exactly what to do if a customer refuses to pay, step by step, from the first chase through to legal action if necessary.

Step 1: Make Sure You’ve Actually Invoiced Correctly

Before assuming the worst, check your invoice is in order. A surprising number of payment disputes arise from invoicing errors that give the customer a legitimate reason to delay.

Check that your invoice includes:

  • Your full business name and contact details
  • The customer’s name and address
  • A clear description of the work carried out
  • The amount due, broken down clearly if VAT is applicable
  • Your payment terms, due date, payment method, bank details
  • Your invoice number and date

If anything is missing or unclear, send a corrected invoice and reset the clock on your payment terms. An invoice that’s easy to process gets paid faster than one that raises questions.

Step 2: Send a Polite Payment Reminder

If the due date has passed and you haven’t heard anything, start with a friendly reminder. Many late payments are genuinely accidental, the invoice got buried, the customer forgot, or there was an admin issue on their end.

A simple message works perfectly:

“Hi [Name], just a friendly reminder that invoice [number] for £[amount] was due on [date]. Please let me know if you have any questions or if there’s anything you need from me to process payment. Thanks.”

Send this by email and follow up with a text if you don’t hear back within two or three days. Keep the tone friendly at this stage, there’s no need to be confrontational before you know what the issue is.

Step 3: Follow Up With a Formal Payment Request

If the polite reminder gets no response or the customer continues to delay, escalate to a more formal written request.

This should be sent by email, so you have a written record, and should clearly state:

  • The invoice number and amount outstanding
  • The original due date
  • That payment is now overdue
  • A new deadline for payment, typically seven days
  • That you will take further action if payment is not received by that date

Keep the tone firm but professional. Avoid being aggressive or making threats you’re not prepared to follow through on.

Step 4: Add Statutory Interest and Late Payment Charges

Under the Late Payment of Commercial Debts (Interest) Act 1998, you have the right to charge statutory interest on overdue invoices from other businesses. The rate is 8% above the Bank of England base rate.

You also have the right to claim a fixed debt recovery charge on top of the outstanding amount:

  • £40 for debts up to £999.99
  • £70 for debts between £1,000 and £9,999.99
  • £100 for debts of £10,000 or more

Note that these statutory rights apply to business-to-business debts. For domestic customers, homeowners, you can only charge interest and late payment fees if your original contract or terms and conditions included a clause allowing you to do so.

Either way, informing the customer that interest is accruing often prompts payment. Include the updated total including interest in your formal payment request.

Step 5: Try to Resolve the Dispute Directly

If the customer is refusing to pay rather than just delaying, find out why. There’s often a specific grievance, real or perceived, that’s driving the refusal.

Common reasons customers refuse to pay:

  • They’re unhappy with the quality of the work
  • They believe something wasn’t completed as agreed
  • They feel the final price was different from what was quoted
  • They’re having their own financial difficulties
  • They’re simply trying it on, hoping you’ll go away

Contact the customer directly, by phone if possible, and ask them to explain their concerns. Listen without getting defensive. If there’s a genuine issue with the work, consider whether it’s worth remedying part of the job for goodwill, especially if a small fix would resolve the whole dispute. If their objection isn’t reasonable, a calm conversation often moves things forward anyway, simply because most people find it harder to stonewall someone on the phone than ignore a text.

Step 6: Send a Formal Letter Before Action

If direct contact doesn’t resolve things, the next step is a Letter Before Action (sometimes called a Letter of Claim). This is a formal written notice stating your intention to take legal action if payment isn’t made by a set deadline, usually 14 days.

Your letter should include:

  • The amount owed, including any statutory interest and late fees
  • A summary of the work carried out and the agreement in place
  • A clear deadline for payment
  • A statement that you will pursue the debt through the small claims court if payment isn’t received

Send it by email and recorded post if possible, so you have proof it was received. Courts expect to see that you made a genuine attempt to resolve the matter before issuing a claim, and a Letter Before Action is part of that evidence.

Step 7: Take It to the Small Claims Court

For debts up to £10,000, the Money Claim Online service (part of HM Courts and Tribunals Service) lets you issue a claim without a solicitor. The process is straightforward: you fill in the claim details, pay a fee based on the amount owed, and the court handles serving the claim to the customer.

If the customer doesn’t respond or doesn’t have a valid defence, you can get a default judgment in your favour, which they’re then legally required to pay. If they contest it, the case may go to a hearing, but the vast majority of small claims for unpaid trade work are settled or resolved before reaching that stage simply because the formal process tends to focus minds.

Keep records throughout. Job photos, signed quotes, written correspondence, and any messages discussing the work all strengthen your position if a dispute does end up in front of a judge.

The Bottom Line

Most non-payment situations resolve at the reminder or formal request stage, long before legal action becomes necessary. The key is not letting things drift: chase early, keep your communication in writing, and escalate calmly and methodically if a customer continues to avoid paying.

Good record keeping makes every stage of this process faster and stronger. Job management and invoicing software that timestamps your quotes, job notes, and payment requests automatically gives you exactly the paper trail you need if a dispute ever goes further than a phone call.

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