When you're self-employed, an unpaid invoice isn't just annoying, it directly hits your income. Unlike employees, you don't have the safety net of a regular salary. Here's how to get paid without expensive solicitors.
Your legal rights as a self-employed person
Good news: you have exactly the same legal rights as any business.
You can:
- Charge interest on late payments (for business to business contracts: 8% + Bank of England base rate)
- Claim compensation for late payment (for business to business contracts: £40-£100)
- Take clients to small claims court
- Recover your money through court enforcement
You don't need:
- A solicitor
- A limited company
- Expensive legal fees
Small claims court is designed for people to represent themselves. It's informal, relatively cheap, and you can do it all online.
The recovery process for freelancers
Step 1: Chase payment (Days 1-14)
Start friendly. Many clients just forget or have admin delays.
Day 1-3:
"Hi [Name], just checking you received invoice #X for £[amount]? It was due on [date]. Let me know if you need anything from me to process it."
Day 7:
"Following up on invoice #X which is now a week overdue. Please confirm when I can expect payment."
Day 14:
"Invoice #X is now two weeks overdue. I need to receive payment within the next 7 days, or I'll have to escalate this formally."
Step 2: Send a letter before action (Day 21+)
If friendly chasing fails, get formal. A letter before action (LBA) is a legal requirement before issuing court proceedings.
Important points to include:
- Exact amount owed and a calculation of any interest claimed
- Invoice number and date
- Deadline to pay (30 days)
- Warning of court action
Be careful, however. The Court prescribes what a letter before action has to include and you need to include all of the details the Court wants.
Many people pay at this stage to avoid court.
Step 3: File a small claims court claim (Day 35+)
If the LBA is ignored, file a court claim. The Court's issue fee varies between £35-£455 depending on the amount of the claim, and the Court will usually order the debtor to reimburse this to you if you win.
The defendant has 14 days to respond. If they don't, you can apply for default judgment.
Can I add interest and compensation?
Yes. For business-to-business details, under the Late Payment of Commercial Debts (Interest) Act 1998:
Interest: 8% above Bank of England base rate per year, calculated from when payment was due.
For a £2,000 invoice that's 30 days late with base rate at 5%:
£2,000 × 13% ÷ 365 × 30 = £21.37 interest
Compensation:
- Debts up to £999.99: £40
- Debts £1,000 - £9,999.99: £70
- Debts £10,000+: £100
These are automatic rights. You don't need to have stated them in your contract but you do need to claim them.
For business-to-consumer contracts, whether you are entitled to interest depends on whether your contract gives you an entitlement. If not, you should make a claim under the County Courts Act 1984.
Special challenges for self-employed people
"They're disputing the work"
If a client suddenly finds fault after you invoice:
- Ask for specifics in writing
- Review your agreement/emails about what was promised
- Consider if the complaint is genuine or just an excuse
- If it's vague or after-the-fact, proceed with recovery
Courts look sceptically at complaints that only emerge when payment is demanded.
"I didn't have a proper contract"
You can still recover payment. Courts recognise:
- Email agreements ("Yes, go ahead with the project")
- Course of dealing (you've worked together before)
- Verbal agreements (harder to prove, but valid)
- Work accepted without complaint
For next time: always confirm scope, price, and payment terms in writing before starting. It's always best to trade under a written contract.
"The amount is small, is it worth it?"
Even for small debts, yes, usually.
Plus you can add interest and compensation on top.
"I'm worried about damaging the relationship"
If they won't pay you fairly, the relationship is already damaged. Consider:
- You are entitled to be paid for the work you have done.
- Would you want to work with them again anyway?
- Other potential clients won't know about the dispute
- Being professional about recovery isn't personal
Protecting yourself for next time
Always get it in writing:
- Scope of work
- Price and payment terms
- What counts as completion
- Process for changes/revisions
Take deposits:
- 25-50% upfront for new clients
- Milestone payments for longer projects
- Final delivery only after final payment
Payment terms:
- Net 14 or Net 30, whatever works for your cash flow
- Consider late payment fees in your terms
- State interest will be charged on overdue invoices
Vet clients:
- Check Companies House for red flags
- Ask for references
- Trust your instincts on difficult people
How Garfield helps freelancers
Chasing money while running your business is exhausting. Garfield automates it:
- Professional letter before action sent by email and post
- Court filing with one click if they don't pay
- All the legal wording handled correctly
You upload your invoice, and we chase it for you. Fixed, transparent pricing, and you are in control.
Stop losing hours to chasing invoices. Let Garfield handle the awkward conversations while you focus on paid work.