A UK company hasn't paid our invoice. What's the first step?

Send a Letter Before Action under the Pre-Action Protocol for Debt Claims. The letter must give the debtor at least 30 days to respond. It sets out the debt, the contractual basis, the interest claimed (often under the Late Payment of Commercial Debts (Interest) Act 1998 — 8 percentage points above Bank of England base rate plus a fixed administrative charge), and the consequences of non-payment. Skipping or shortening the protocol can cost you on costs at the end of the case. Where the debtor is a UK company and the debt is undisputed, the Letter Before Action alone resolves a substantial number of cases.

Can I issue a statutory demand straight away?

A statutory demand under sections 122 and 123 of the Insolvency Act 1986 is the gateway to a winding-up petition. It can be served on a UK company that owes a debt of £750 or more (raised to the company-petition threshold). The debtor has 21 days to pay, secure or compound the debt. If the debt is genuinely undisputed and the debtor is solvent, this is a very effective lever — companies typically pay rather than face winding up. But statutory demands must not be used for disputed debts: an injunction restraining the petition can be granted, and you can be ordered to pay indemnity costs.

What if the debt is disputed?

If the debtor raises a substantial dispute on substantial grounds, the statutory-demand / winding-up route is closed. The proper route is a Part 7 claim in the appropriate court (County Court Money Claims Centre, the County Court at Central London Business Centre, or the Business and Property Courts of the High Court depending on value and complexity). After service and acknowledgement, summary judgment under CPR Part 24 is available where the dispute has 'no real prospect of success', or default judgment under CPR Part 12 if the debtor does not file a defence.

How do I serve a UK company from China?

Service on a UK company is straightforward — service is effected at the company's registered office under section 1139 of the Companies Act 2006. There is no need to use the Hague Service Convention because the defendant is in the UK. Where you are the claimant in China, our office serves the proceedings on your behalf at the registered office. The whole claim can be commenced and run from China; we attend any required hearings.

Can we recover interest and costs?

Interest on commercial debts between businesses is recoverable under the Late Payment of Commercial Debts (Interest) Act 1998 at 8 percentage points above Bank of England base rate, together with a fixed administrative charge (between £40 and £100 depending on debt size) and reasonable costs of recovery. The court has discretion to award costs to the successful party — recoverable costs typically include solicitor fees, court fees, and disbursements. In a clear-cut undisputed debt case the recovered interest and costs frequently approach or exceed the original debt for older invoices.

What if we win but the UK company has no money?

Once judgment is entered, the full suite of English enforcement methods is available: a writ of control sent to enforcement officers (the modern High Court Enforcement Officer regime can produce results faster than the County Court bailiff), third-party debt orders against UK bank accounts, charging orders over UK real estate, and the company's winding up via petition. Pre-issue investigation of the debtor's assets — bank accounts, real estate, debtors of its own — is often worth doing before deciding which enforcement route to use.

Commercial Disputes

The UK company didn't pay our invoice: a debt recovery guide for Chinese suppliers and exporters

By Leon Chua · Partner · 2 May 2026

English law gives Chinese suppliers and exporters a well-established route to recover unpaid invoices from UK customers. The route depends on whether the debt is genuinely disputed, the size of the debt, and the debtor's solvency. This guide explains the practical steps — Letter Before Action, statutory demand, Part 7 claim, summary or default judgment, and post-judgment enforcement. Jointly written by Leon Chua (Partner) and Jackson Ng MCIArb (Partner & Barrister) of Duan & Duan UK LLP.

The decision tree — disputed or undisputed?

The first question is whether the UK company genuinely disputes the debt:

Undisputed debt (the goods were supplied, the invoice was raised, no objection was made, payment is just overdue) — the statutory demand and winding-up petition route is fast, effective, and creates real commercial pressure on the debtor.
Disputed debt (the debtor alleges defective goods, a set-off, a contractual right to delay payment, or some other defence) — the statutory-demand route is closed, and you must proceed by ordinary contract claim in the courts.

Misjudging this can be expensive. If you serve a statutory demand on a debt that turns out to be genuinely disputed, the debtor can apply to the court to restrain you from presenting a winding-up petition, and you may be ordered to pay the debtor's costs on the indemnity basis.

Step 1 — the Letter Before Action

In every commercial debt case the proper first step is a Letter Before Action under the Pre-Action Protocol for Debt Claims. The protocol requires:

At least 30 days for the debtor to respond before proceedings are issued;
Clear identification of the debt (the contract, the invoice, the amount, the due date);
Calculation of interest claimed (typically under the Late Payment of Commercial Debts (Interest) Act 1998);
Information on alternative dispute resolution (mediation) and on the consequences of non-payment;
An offer of repayment terms where appropriate.

In our experience, a properly-drafted Letter Before Action resolves a significant proportion of UK debt-recovery cases. UK companies — and particularly UK directors who have to consider their personal exposure — take a properly-pleaded debt seriously. Where the debtor responds with a genuine dispute, you have valuable evidence of the dispute as it stood before proceedings; where the debtor ignores the letter or responds with a holding response, you have prepared the ground for the next step.

Step 2 — choose the route

Route A: Statutory demand and winding-up (undisputed debt only)

A statutory demand is a formal demand served under section 123 of the Insolvency Act 1986. For company debtors:

The debt must be at least £750 (the threshold for a company winding-up petition).
The demand must give the debtor 21 days to pay, secure, or compound the debt.
If the debtor fails to do so, the creditor may present a winding-up petition to the Companies Court.

The pressure created by a statutory demand is often decisive. A UK company facing a winding-up petition risks:

Public advertisement of the petition (gazetted);
Bank-account freezing — the bank typically freezes the company's accounts on becoming aware of the petition, citing risk of voidable transactions under section 127 of the Insolvency Act 1986;
Reputational damage, loss of credit lines, and supplier-relationship risk;
Director personal exposure to wrongful trading claims if the company continues to trade while insolvent.

Most UK companies pay in full once a statutory demand is served, particularly where the debt is genuinely undisputed.

Critical caveat: do not use the statutory-demand route if the debt is disputed on substantial grounds. The court will restrain a winding-up petition where there is a bona fide dispute and may order indemnity costs against the creditor.

Route B: Ordinary debt claim (disputed or large-value)

The proper route for a disputed debt — or where the creditor wishes to obtain judgment that can be enforced flexibly — is a Part 7 claim in the appropriate court:

County Court Money Claims Centre for straightforward debts under £100,000;
County Court at the Business Centre or specific County Court Business and Property Courts hearing centres for mid-value commercial debts;
Business and Property Courts of the High Court (King's Bench Division or, for higher-value commercial work, the Commercial Court) for substantial or complex claims.

After issue and service, the procedural milestones are:

Acknowledgement of service within 14 days of service.
Defence within 28 days of acknowledgement (or 14 days of service if no acknowledgement).
Default judgment under CPR Part 12 if the debtor fails to file an acknowledgement and defence in time. Often available on paper without a hearing.
Summary judgment under CPR Part 24 where the debtor has no real prospect of successfully defending the claim and there is no other compelling reason for the case to go to trial. This is an effective gateway in cases where the debtor's defence is weak or contrived.
Trial in cases that genuinely turn on disputed evidence.

Most UK debt cases never reach trial — they settle, default judgment is entered, or summary judgment is granted.

Step 3 — interest, fees and recoverable costs

Three sources of recovery beyond the principal debt:

Interest under the Late Payment of Commercial Debts (Interest) Act 1998. For business-to-business debts, statutory interest runs at 8 percentage points above the Bank of England base rate from the due date until payment. There is also a fixed administrative charge (between £40 and £100 depending on the size of the debt) and reasonable costs of recovery (which can extend to legal costs). For an old invoice the accumulated interest can be substantial — frequently exceeding the original debt for invoices several years overdue.

Court fees, which scale with the value of the claim, are recoverable from the losing party.

Solicitors' fees and disbursements, recoverable on the standard basis under CPR Part 44 in most cases. The recoverable amount is the proportion the court considers reasonable and proportionate. In a clear-cut undisputed debt case, the recoverable costs typically cover the bulk of the legal fees actually incurred.

Step 4 — enforcement

Judgment is one thing; payment is another. Once judgment is entered, English enforcement methods include:

Writ of Control / Warrant of Control — sent to enforcement officers (High Court Enforcement Officers under a writ of control, or County Court bailiffs under a warrant). HCEOs can act faster on debts above £600.
Third-party debt orders under CPR Part 72 — directing the debtor's bank to pay sums standing to its credit directly to the judgment creditor. Effective if you know the bank.
Charging orders under the Charging Orders Act 1979 — securing the judgment debt over UK real estate (or shares). Combined with a subsequent order for sale where appropriate.
Attachment of earnings — for debtor companies' employee directors with provable income (less common for corporate debtors).
Information orders under CPR Part 71 — compelling a director of the debtor company to attend court and answer questions about the company's assets and income.
Winding-up petition as the next step where the judgment debt remains unsatisfied.

A pre-issue investigation of the debtor's assets — Companies House, registered-office address, recent filings, charges register, bank where bank details have been seen on prior payments — often determines which enforcement route to choose.

Cross-border points for Chinese creditors

Service. Service on a UK company is at its registered office under section 1139 of the Companies Act 2006. There is no Hague Service Convention complication because the debtor is in the UK. We act as the address-for-service for Chinese creditors.

Originals. English courts often want originals of contracts, invoices and delivery documents. Where you are sending these from China, scanned copies are usually adequate at the protocol stage; originals can be produced in evidence at trial if disputed.

Translation. Where the contract or correspondence is in Chinese, certified English translations are required for court documents. We arrange these via specialist legal translators.

Late-payment statutory penalty. The UK's Late Payment Act regime is more generous to creditors than the equivalent regime under PRC law in many cases. The combination of 8% over base rate plus the fixed admin charge plus recoverable costs frequently makes UK proceedings worthwhile even on relatively modest invoices.

When to consider arbitration instead

Where the underlying contract contains an arbitration clause (CIETAC, BAC, HKIAC, LCIA, or another), the proper route is to invoke the arbitration agreement. A commenced UK court claim will be stayed in favour of arbitration under section 9 of the Arbitration Act 1996 if the defendant applies in time. Parties contemplating UK debt recovery should always check the underlying contract's dispute-resolution clause before issuing UK proceedings — issuing in court when there is a binding arbitration clause is a costly error that delays everything by months.

A separate guide Enforcing Chinese Court Judgments in the United Kingdom: A Practical Guide covers the position where a creditor has already obtained a PRC court judgment (or a New York Convention arbitral award) and wishes to enforce it in England. The present guide is for the more common case where the creditor is at the start of the process: invoice unpaid, no judgment yet.

What we do for Chinese creditors

Duan & Duan UK LLP runs UK debt-recovery work for Chinese exporters, suppliers, manufacturers, and SMEs on a regular basis. Our typical workflow:

Initial assessment of the debt — disputed or undisputed, debtor solvency, prospects of recovery.
Drafting and service of the Letter Before Action under the Pre-Action Protocol.
Statutory demand and winding-up petition route where the debt is undisputed and the debtor is solvent.
Part 7 claim and Part 24 / Part 12 judgment where ordinary court proceedings are appropriate.
Post-judgment enforcement — writ of control, third-party debt order, charging order, winding-up petition.
Coordination with PRC counsel for the underlying contractual evidence and (where applicable) PRC enforcement of the resulting English judgment.

Consultations are conducted in English. For Chinese-language exchanges Leon and Jackson work alongside Mandarin and Cantonese-speaking colleagues across the firm.

Contact

Leon Chua (Partner) and Jackson Ng MCIArb (Partner & Barrister) lead the firm's UK debt-recovery practice for Chinese creditors. Leon handles the Commercial Court and Companies Court litigation; Jackson focuses on cross-border matters and asset recovery. For a confidential initial conversation:

Telephone: +44 20 3036 0264
Email: office@duanduanuk.com
WhatsApp: message us on WhatsApp
WeChat: search DuanDuanUKLLP
In writing: Duan & Duan UK LLP, 2nd Floor East, Goldsmith Building, Middle Temple, London EC4Y 7BL

Initial enquiries are without obligation and treated in strict confidence.

This guide is general information only and does not constitute legal advice. Each case must be assessed on its specific facts. Limitation periods (six years from the date the cause of action accrued for ordinary contractual debts in England and Wales) apply. Duan & Duan UK LLP is a limited liability partnership registered in England and Wales (OC427307), authorised and regulated by the Solicitors Regulation Authority (SRA number 659252).

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