The Freelancer's Guide to Getting Paid on Time

Late payment is not just an inconvenience for freelancers — it is an existential threat. When your income depends on a handful of clients paying on time, a single delayed invoice can mean missed rent, deferred tax payments, or turning down new work because you cannot afford to fund the gap. Research from the Federation of Small Businesses consistently shows that late payment is the number one cash flow challenge facing UK sole traders and freelancers.

The reality is that most late payments are preventable. They stem from unclear terms, poor processes, or a lack of follow-up rather than genuine inability to pay. This guide covers everything from structuring your payment terms to exercising your legal rights when a client refuses to pay.

Setting Payment Terms That Actually Work

Your payment terms are the single biggest lever you have over when you get paid. Get them right and you dramatically reduce the chance of chasing invoices later.

Choose the Right Payment Window

Net 30 (payment due within 30 days of the invoice date) is the UK default, but it is not always the best choice for freelancers. Consider these alternatives:

• Net 14 shortens your wait by half and is increasingly standard among independent professionals. Most clients will accept it without question if you state it upfront.
• Net 7 is appropriate for smaller jobs and ongoing retainer work where you invoice regularly.
• Payment on receipt works well for one-off projects and new client relationships where you have not yet established trust.

The key is to agree your terms before starting any work. Once a client has received the deliverables, your negotiating power drops considerably.

Require Deposits for New Clients

Asking for a deposit upfront is standard practice, not a sign of distrust. For new clients or larger projects, request 50% before starting work and the remaining 50% on completion. For very large projects, break the payments into three or four milestones tied to specific deliverables.

Deposits serve two purposes. First, they provide immediate cash flow so you are not funding the entire project yourself. Second, they filter out unreliable clients. A client who refuses to pay a reasonable deposit is almost certainly going to be difficult when the final invoice arrives.

Put Everything in a Contract

A verbal agreement is legally binding in the UK, but proving what was agreed becomes extraordinarily difficult without written evidence. Every freelance engagement should have a written contract or statement of work that includes:

• A clear scope of work describing exactly what you will deliver
• The total fee and how it breaks down (fixed price, hourly rate, or milestone payments)
• Payment terms including the due date or payment window
• Late payment terms, including interest you will charge on overdue invoices
• A kill fee or cancellation clause specifying what happens if the client cancels the project partway through
• Ownership and intellectual property terms, making clear that IP transfers only on full payment

You do not need a solicitor to draft a freelance contract. Several excellent UK-specific templates are available from organisations like IPSE (the Association of Independent Professionals and the Self-Employed) and the Freelancer Club.

Your Legal Rights Under UK Law

Many freelancers do not realise how strongly UK law protects them against late payment. The Late Payment of Commercial Debts (Interest) Act 1998 gives you automatic rights that apply even if your contract does not mention them.

Statutory Interest on Late Payments

If a client pays late, you are entitled to charge statutory interest at 8% per year above the Bank of England base rate. As of early 2026, with the base rate at 4.5%, this means you can charge 12.5% annual interest on the overdue amount.

Interest accrues from the day after the payment was due. For example, if you invoiced £3,000 with Net 30 terms and the client pays 60 days late, you would be entitled to roughly £61.64 in interest (£3,000 x 12.5% / 365 x 60 days).

Fixed Compensation for Late Payment

On top of interest, the Act entitles you to a fixed sum of compensation for each late invoice:

• £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

This compensation is yours to claim regardless of whether you suffered any additional loss. It is designed to cover the administrative cost of chasing payment.

Reasonable Recovery Costs

If you incur costs in recovering the debt — for example, if you instruct a solicitor or a debt recovery agency — you can also claim reasonable recovery costs on top of the interest and fixed compensation.

It is worth noting that you cannot contract out of these rights. If a client includes a clause in their contract attempting to waive your right to statutory interest, that clause is unenforceable.

Building a Bulletproof Chase Process

Having a consistent process for following up on invoices removes the emotional difficulty of chasing money and ensures nothing slips through the cracks.

Before the Invoice is Due

Day of sending: Send the invoice by email with a clear subject line such as “Invoice INV-042 — £2,500 due 8 March 2026.” Attach the invoice as a PDF and include your payment details in the body of the email.

One week before due date: Send a friendly reminder. Something as simple as: “Just a quick note that invoice INV-042 for £2,500 is due on 8 March. Please let me know if you need anything from my end to process payment.” This gentle nudge catches invoices that may have been lost in an inbox or are sitting in an approval queue.

After the Invoice is Overdue

Day 1 overdue: Send a polite but direct email noting that the invoice is now past its due date and requesting payment at the earliest opportunity.

Day 7 overdue: Follow up by email and, if possible, by phone. Speaking to someone directly is far more effective than email alone. Ask specifically when you can expect payment and get a committed date.

Day 14 overdue: Send a firmer email stating that the invoice is now significantly overdue. Mention that you reserve the right to charge interest and compensation under the Late Payment of Commercial Debts Act. Give a specific deadline — typically seven days — for payment.

Day 21 overdue: If you still have not been paid, it is time to escalate. This is when you send a formal “letter before action.”

The Letter Before Action

A letter before action (sometimes called a letter before claim) is a formal letter that puts the client on notice that you intend to pursue legal action if payment is not received within a specified period, usually 14 days. This letter should include:

• The invoice number, amount, and original due date
• A record of your previous attempts to collect payment
• The total amount now owed, including statutory interest and compensation
• A clear statement that you will issue court proceedings if payment is not received by the deadline
• Your preferred method of payment

The letter before action is a legal requirement before you can issue a court claim, and it is remarkably effective. Many clients who have been ignoring reminders will pay promptly once they receive one, because it signals that you are serious about enforcement.

Taking Legal Action: Small Claims Court

If the letter before action does not produce payment, you can issue a claim through the County Court. For debts up to £10,000 in England and Wales, this is handled through the small claims track, which is designed to be accessible without a solicitor.

How to Make a Claim

You can file a claim online through the Money Claims Online service (MCOL) at moneyclaims.service.gov.uk. The court fee depends on the amount you are claiming:

• Up to £300: fee of £35
• £300.01 to £500: fee of £50
• £500.01 to £1,000: fee of £70
• £1,000.01 to £1,500: fee of £80
• £1,500.01 to £3,000: fee of £115
• £3,000.01 to £5,000: fee of £205
• £5,000.01 to £10,000: fee of £455

These fees are added to the total the defendant owes if you win, so you will recover them.

What Happens After You File

Once you file a claim, the defendant (your client) has 14 days to respond. They can pay the full amount, admit the debt and propose a payment plan, or file a defence. In practice, a large proportion of claims are settled after filing because the defendant realises you are serious and wants to avoid a County Court Judgement (CCJ) on their credit record.

If the defendant does not respond within 14 days, you can request a default judgement — an automatic win.

If the case proceeds to a hearing, small claims hearings are relatively informal. You present your evidence (contract, invoices, emails showing the chase process), and a district judge makes a decision. You do not need a solicitor, and costs are limited so there is minimal financial risk.

Prevention: How to Avoid Late Payment in the First Place

The best invoice chase process is one you never need to use. Here are strategies that dramatically reduce late payment.

Vet Your Clients

Before taking on a new client, do basic due diligence. Check their Companies House records if they are a limited company — are their accounts filed on time? Have they had any CCJs? A quick search can reveal patterns that suggest payment problems.

Invoice Immediately

Send your invoice the moment the work is complete. Every day you delay invoicing is a day added to your payment timeline. If you finish a project on a Friday, send the invoice that same day.

Make Paying Easy

Include your bank details prominently on every invoice. Consider offering multiple payment methods — bank transfer is standard, but some clients prefer to pay by card. Invoicing tools like FreeAgent, Xero, and Stripe let clients pay directly from the invoice with one click.

Use Automated Reminders

Most invoicing software can send automatic reminders before and after the due date. Set these up once and they work in the background, ensuring no invoice is ever forgotten without you needing to manually track every payment.

Build Relationships with Accounts Teams

For corporate clients, your main contact is rarely the person who processes payments. Ask your contact to introduce you to whoever handles supplier payments. Having a direct line to the accounts department means you can resolve payment queries quickly rather than waiting for messages to be relayed.

Pause Work on Overdue Accounts

If a client has an outstanding overdue invoice, do not start new work for them until it is settled. State this clearly and professionally: “I would love to get started on the next phase, but I am unable to take on new work while invoice INV-042 remains outstanding. Once that is settled, I can begin immediately.”

This is not confrontational — it is good business practice, and most clients will understand and act quickly to clear the balance.

Protecting Your Cash Flow Long Term

Late payment is a systemic problem in UK business, and no single strategy eliminates it entirely. The freelancers who manage it best take a layered approach: clear contracts upfront, prompt invoicing, consistent follow-up, and a willingness to enforce their legal rights when necessary.

Building a cash reserve that covers at least two to three months of essential expenses gives you breathing room when payments are delayed. It also gives you the confidence to walk away from clients who consistently pay late, which is sometimes the most effective strategy of all.

Getting paid is not a favour your clients do for you. It is a legal obligation they accepted when they commissioned your work. Understanding your rights, setting clear expectations, and following through consistently will ensure that the vast majority of your invoices are paid on time — and that you have effective remedies for the rare occasions when they are not.