How long can you legally chase an unpaid UK invoice

It’s a situation many small business owners dread. You’re reviewing your accounts and stumble upon an invoice from months, or even years, ago that was never paid. Your first thought is about the lost revenue, but the second is often a question of uncertainty: is it even worth chasing anymore? Is there a legal time limit on pursuing an unpaid invoice in the UK?

The short answer is yes. For most UK business debts, there is a strict time limit of six years to begin court action to recover the money. This rule comes from a piece of legislation called the Limitation Act 1980. However, the six-year countdown isn’t always straightforward. Certain actions by your client can restart the clock entirely, giving you a fresh six-year window. This article explains exactly how that limitation period works, when the clock starts, what can reset it, and the practical steps you should take to manage old debts.

What is the legal time limit for chasing an invoice in the UK?

The primary law governing time limits for debt recovery in England and Wales is the Limitation Act 1980. This act sets out statutory deadlines for bringing different types of civil legal claims to court. If you miss the deadline, your claim becomes "statute-barred," meaning you lose the right to use the courts to enforce the debt.

For most transactions involving invoices for goods or services, the relevant category is a "simple contract."

• Simple Contracts: This covers the vast majority of business agreements, including verbal agreements, quotes you’ve had accepted by email, and standard terms and conditions. For a simple contract, the limitation period is six years.
• Deeds: A deed is a more formal legal document that must be executed with specific formalities (for example, it must be in writing, state clearly that it is a deed, and be signed in the presence of a witness). These are less common for day-to-day invoicing but might be used for significant, high-value projects or property agreements. The limitation period for a deed is twelve years.

For the rest of this guide, we will focus on the six-year limit for simple contracts, as this applies to almost all invoices raised by freelancers, small businesses, and agencies in the UK.

It's crucial to understand that this is the deadline for initiating legal proceedings (i.e., filing a claim with the court), not for chasing the invoice yourself. You can continue to send letters and emails asking for payment right up until the last day of the sixth year.

When Does the Six-Year Clock Start Ticking?

This is the most critical part to get right. The six-year period does not start from the date you issued the invoice. It starts from the "cause of action," which is the first point at which you could have legally taken court action.

For an unpaid invoice, the cause of action is the day after the payment due date.

Let’s look at a clear example:

• You complete a project and issue an invoice for £2,000 on 1st March 2024.
• Your payment terms, clearly stated on the invoice, are 30 days.
• The due date for payment is 31st March 2024.
• The client fails to pay.

The "cause of action" arises on 1st April 2024. This is the first day the payment is officially overdue and you have a legal right to sue for the debt.

Therefore, the six-year limitation clock starts ticking on 1st April 2024. You would have until 31st March 2030 to initiate court proceedings. If you wait until 2nd April 2030, the debt will be statute-barred.

This is why having clear payment terms on your invoices is not just good practice for cash flow—it’s essential for establishing a clear start date for your limitation period. If you have no agreed payment terms, the law typically implies a "reasonable" time for payment, which is often taken as 30 days for commercial contracts. However, this ambiguity can create disputes, so always state your due date clearly.

The Two Key Actions That 'Reset' the Limitation Clock

The six-year deadline is not always fixed. The Limitation Act 1980 specifies two key actions by the debtor (your client) that can "reset" the clock, starting the six-year countdown all over again from that new date. This is legally referred to as "acknowledgement" or "part-payment."

1. Written Acknowledgement of the Debt

If the debtor acknowledges the debt in writing, the limitation period restarts from the date of that acknowledgement. For the acknowledgement to be legally effective, it must meet a few criteria:

• It must be in writing. This is interpreted quite broadly in the modern age. An email, a signed letter, a text message, or a WhatsApp message can all count as "in writing."
• It must be signed. Again, "signed" is interpreted broadly. An email sent from the debtor’s usual business address is typically considered signed by them.
• It must acknowledge the debt. The debtor must clearly admit that they owe the money. A vague message like "I'll look into the account issues" is not an acknowledgement. A message like, "Sorry for the delay on invoice #123, things have been tight but we are planning to pay it," is a clear acknowledgement.

Examples of what works vs. what doesn't:

• Effective Acknowledgement: "Hi John, apologies for the outstanding £1,500. Can we arrange a payment plan?" – This resets the clock from the date the email was sent.
• Ineffective Statement: "Hi John, thanks for your email. We are currently reviewing all our supplier accounts." – This does not acknowledge the specific debt and does not reset the clock.

If you receive a written acknowledgement, the six-year period starts again from that date. For example, if a debt from 2020 was due to expire in 2026, but the client emails you in 2025 to acknowledge they owe it, you now have until 2031 to bring a court claim.

2. Part-Payment of the Debt

This is the second, more straightforward way the clock can be reset. If the debtor makes any payment towards the total amount owed for that specific invoice, the six-year limitation period restarts from the date of that payment.

For example:

• An invoice for £5,000 was due on 10th May 2020. The original limitation period would end on 9th May 2026.
• Your chasing process is slow, and years go by.
• On 1st June 2024, the client makes a payment of £500 towards the invoice.

This part-payment of £500 resets the clock entirely. You now have a fresh six-year window, until 31st May 2030, to recover the remaining £4,500.

An important note: The payment must be clearly identifiable as being for that specific debt. If a client owes you multiple debts and makes a single, unallocated payment, it can become legally complex to argue which debt the payment was for and which clock has been reset. This is why good record-keeping and clear communication are essential.

Can the Limitation Clock be 'Paused'?

While "resetting" is common, the concept of "pausing" the clock is different and rarer. It is possible through a formal legal mechanism called a standstill agreement.

A standstill agreement is a contract where both the creditor (you) and the debtor agree to suspend the running of the limitation period for a specified time. This is not something that happens by accident; it's a deliberate legal step.

Parties might enter into a standstill agreement if they are in serious negotiations, attempting mediation, or gathering complex evidence. It allows them to negotiate freely without the creditor feeling pressured to issue a court claim just to avoid being timed out by the Limitation Act.

For a small business, this is an advanced legal tool. You would almost certainly need a solicitor to draft a standstill agreement to ensure it is legally binding and effectively "pauses" the clock as intended. Simply holding off on chasing a debt does not pause the clock; this is a common and dangerous misconception. Unless you have a formal standstill agreement, the six-year clock keeps ticking.

Practical Steps for Managing Old Invoices

Understanding the six-year rule is one thing; applying it to protect your business is another. Here are some practical steps to take.

1. Prioritise Prompt Chasing: The six-year limit is a final backstop, not a target. Your primary goal is to get paid quickly to maintain healthy cash flow. A debt that is a few weeks overdue is far easier to collect than one that is several years old.
2. Keep Meticulous Records: Your accounting system is also your evidence locker. Ensure you securely store copies of all invoices, contracts or quotes, and, most importantly, all communication with the client about the debt. An email from your client acknowledging the debt from three years ago is worthless if you can’t find it.
3. Confirm Verbal Promises in Writing: If a client calls you and promises to pay, that’s great news. However, a verbal promise is difficult to prove in court and does not reset the limitation clock. Always follow up a phone call with a summary email, for example: "Hi Jane, thanks for the call. As discussed, you confirmed you will pay the outstanding balance of £500 for invoice #456 by next Friday. Please let me know if I've misunderstood." If they reply to confirm, you now have a written acknowledgement.
4. Automate Your Follow-Ups: Manually tracking dozens of invoices, payment due dates, and follow-up schedules is a recipe for missed deadlines and lost revenue. A consistent, automated chasing process ensures no invoice slips through the cracks. Using a tool like InvoiceReminder can schedule and send your chasing emails automatically, from a gentle first reminder to a firmer final notice. This not only saves hours of administrative work but also creates a perfect, time-stamped paper trail of your collection efforts.

What Happens After Six Years? Understanding 'Statute-Barred' Debt

If six years pass from the cause of action (or the last acknowledgement/part-payment), the debt becomes "statute-barred." What does this actually mean?

It does not mean the debt is cancelled or extinguished. The debtor still technically owes you the money.

What it does mean is that you have lost the right to use the court system to force them to pay. If you were to file a claim, their defence would simply be that the limitation period has expired, and the court would dismiss your case.

You can still ask for the money. You can send letters and emails requesting payment of a statute-barred debt. If the client chooses to pay it, they are legally entitled to do so, and you are legally entitled to keep the money. However, you cannot threaten legal action, as this would be misleading and is considered a form of aggressive practice.

Late Payment Interest and Compensation: Your Rights Within the Six-Year Window

While you're chasing a debt that is well within the six-year limit, don't forget you have a legal right to add interest and a fixed compensation sum to your commercial invoices. This is thanks to the Late Payment of Commercial Debts (Interest) Act 1998.

For B2B transactions, you can claim:

1. Statutory Interest: This is calculated at 8% plus the Bank of England's base rate. This "statutory interest" is significantly higher than typical commercial rates, and it's designed to be a powerful deterrent against late payment. The Bank of England base rate can change, so you should always check the current rate when calculating the interest owed.
2. Fixed Compensation: You can also claim a one-off compensation payment for the cost of recovering the debt. The amount depends on the size of the invoice.

Invoice Value	Fixed Compensation You Can Claim
Up to £999.99	£40
£1,000 to £9,999.99	£70
£10,000 or more	£100

Adding these charges to your reminder emails—and to any potential court claim—not only compensates you for the delay but also shows the debtor you are serious and fully aware of your rights.

Frequently Asked Questions

Does sending my own reminder emails reset the six-year clock?

No. The clock is only reset by an action from the debtor (your client). Your own chasing emails, letters, or calls do not pause or reset the limitation period. Only a written acknowledgement or a part-payment from the debtor can do that.

Is the time limit for chasing a debt different in Scotland?

Yes. While England, Wales, and Northern Ireland follow the six-year rule from the Limitation Act 1980, Scotland has its own system. Under the Prescription and Limitation (Scotland) Act 1973, the time limit for most simple contract debts to be enforced is shorter, at five years. The rules for what resets the clock (known as "relevant claim" or "relevant acknowledgement" in Scots law) are also different. This is a key distinction for businesses operating across the UK.

What if my client verbally promised to pay me on the phone?

A verbal promise is not enough to reset the limitation clock because the Limitation Act specifies that an acknowledgement must be in writing and signed. While a verbal promise might be used as evidence in a wider dispute, it won't restart the six-year countdown. Always follow up phone calls with an email to try and get that promise in writing.

I have an invoice from seven years ago. Is it completely worthless?

Not completely, but your power to collect it is severely limited. The debt is almost certainly statute-barred, meaning you cannot take the client to court. You can still write to them and ask for payment, but you cannot threaten legal action. If they pay you voluntarily, the money is yours to keep.

What's the difference between a simple contract and a deed?

A simple contract can be written or even verbal and covers most day-to-day business. The time limit for chasing a debt under a simple contract is six years. A deed is a formal written document that must meet specific legal requirements, including being witnessed. It's used for more significant transactions like property sales or certain loan agreements. The time limit for a deed is much longer, at twelve years.

Can I still add late payment interest to an invoice that's five years old?

Yes. As long as the debt is not yet statute-barred (i.e., you are still within the six-year window) and the transaction qualifies under the Late Payment of Commercial Debts Act, you can calculate and claim statutory interest for the entire period the debt has been overdue.

Take the Manual Work Out of Invoice Chasing

Staying on top of payment deadlines, chasing overdue clients, and keeping a clear record of communication is vital for managing your limitation periods and, more importantly, your cash flow. InvoiceReminder is built to automate this entire process for UK small businesses, freelancers, and their accountants.

By connecting directly to your Xero, QuickBooks, FreeAgent, or Sage account, InvoiceReminder automatically sends scheduled chasing emails based on rules you control. You can set up a polite reminder before the due date, a series of follow-ups when payment is late, and a final notice, all without lifting a finger. This ensures no invoice is forgotten and provides a perfect audit trail. The core email reminder features are currently available at no cost on the Free plan, with no card required. InvoiceReminder is built by the team behind WeCovr, a UK company authorised and regulated by the Financial Conduct Authority which has arranged over 1,000,000 insurance policies.