In most cases, a business in England or Wales has six years to start a court claim for an unpaid invoice. The clock usually starts when the payment becomes due. It does not always run from the date shown on the invoice.
Northern Ireland also generally has a six-year limit for a simple contract claim. In Scotland, most contractual debts can prescribe after five years if the period has not been interrupted. Different rules may apply in unusual cases.
So, how long can you chase an unpaid invoice? The practical answer depends on which law governs the contract and whether anything has changed the limitation period. You should never wait until the deadline is close before taking action.
What Does the Six-Year Limitation Period Mean?
Under the Limitation Act 1980, a claim based on a simple contract in England and Wales must normally begin within six years of the cause of action. For a standard unpaid invoice, this is usually when the customer misses the agreed payment date and you gain the right to bring a claim.
The debt does not automatically disappear after six years. However, the debtor may have a limitation defence if you try to recover it through the courts. Your important deadline is the date by which you must issue proceedings, not the date of your next reminder. Contracts made as deeds can have different limits.
When Does the Time Limit Start?
Start by checking the payment terms in your contract, order confirmation and invoice. If you agreed that payment would be due within 30 days, the limitation period will usually begin once that deadline has passed.
Where no payment date was agreed, late payment rules generally treat a business payment as late 30 days after the customer receives the invoice, or after you provide the goods or service if that happens later. Do not assume the invoice date alone settles the question.
Keep evidence of when you completed the work, delivered the goods and sent the invoice. Save the contract, purchase order, delivery notes, emails and account statements. These records can help prove the debt and its due date.
Can the Limitation Period Restart?
Simply calling, emailing or writing to the debtor does not restart the limitation period. In England and Wales, the clock may start again if the debtor acknowledges the debt in writing and signs that acknowledgement, or makes a part payment before the original period expires.
Once a claim has become statute-barred, a later acknowledgement or payment will not normally revive it. Take legal advice if an old account includes part payments, written admissions or a long-running dispute.
How to Chase an Unpaid Invoice
If the payment date has passed, take a clear and consistent approach:
- Check the details. Confirm the debtor’s legal name, the amount due, the agreed terms and that the invoice reached the right person.
- Send a polite reminder. Attach the invoice, state when it fell due and ask whether anything is delaying payment.
- Escalate in writing. Send a firmer demand with the balance, a payment deadline and the action you intend to take next.
- Address any dispute. Ask the debtor to explain the issue and provide evidence. Respond to genuine concerns, but do not let a vague objection cause endless delay.
- Consider interest and recovery costs. On qualifying business-to-business debts, you may claim statutory interest at 8% above the Bank of England base rate. Fixed compensation of £40, £70 or £100 may also apply, depending on the debt value. You cannot claim statutory interest if the contract sets a different rate.
- Send a letter before action. Explain why the money is due, how much you want the debtor to pay and what may happen next.
- Instruct a specialist or consider court action. Act well before the limitation period ends. A final demand does not stop time from running.
Knowing how to chase an unpaid invoice is useful, but repeated reminders can waste your time. Set an escalation process and follow it.
Why You Should Not Wait Six Years
An older debt is often harder to recover. Staff leave, records go missing and the debtor’s financial position may worsen. If the company enters liquidation or administration, your options can become limited. Early action gives you a better chance of resolving questions, preserving evidence and securing payment.
Get Help Recovering an Overdue Business Invoice
Advocate specialises in recovering unpaid invoices between UK businesses. Our team has more than 60 years of combined industry experience. In eligible cases, our service is free to the creditor because the debtor pays our costs under Late Payment Legislation.
If your invoice relates to goods or services, the total debt is at least £750 and the payment terms have passed, you can submit the debt for collection online. If the invoice is several years old or close to a limitation deadline, contact us first so we can review the circumstances.