When a limited company ignores a final demand, you have already left ordinary reminders behind. The next steps differ from writing the demand itself: confirm the company is still the right debtor, move to a Practice Direction letter before action, assert Late Payment Act rights where they apply, then choose partner instruction or court — and pause if the debt is disputed or the company is insolvent.
Debt Collection UK (a trading style of PASECOM GROUP LTD) introduces B2B files to independent partner agencies. We are not solicitors, we are not authorised by the Financial Conduct Authority, and we do not collect consumer credit. PASECOM GROUP LTD was incorporated on 7 April 2026. We introduce commercial claims; we do not issue proceedings. Partners collect. Recovery is not guaranteed.
This guide sits after a final demand has gone unanswered. For drafting that letter, see how to write a final demand letter (B2B). For the broader company path, see how to recover unpaid invoices from a limited company.
Confirm the company still exists and is the right debtor
Before you escalate, check the legal name and company number on Companies House, note the registered office, confirm you invoiced the limited company (or LLP) rather than a similarly named sole trader or affiliate, and look for striking-off, liquidation, administration, or a CVA.
If the wrong entity was billed, fix the paperwork before a letter before action. Directors are not automatically liable for the company’s trade invoices unless a personal guarantee or other personal liability sits alongside.
Re-check proof before you raise the temperature
Before the next letter, assemble the invoice and statement; purchase order or signed terms; delivery or performance evidence; prior reminders and the ignored final demand; and any written admission of the balance. That pack is what unpaid invoices recovery rests on.
Move from final demand to a Practice Direction LBA
A final demand is still credit control. The commercial next step against a limited company is a proportionate letter before action under Practice Direction – Pre-Action Conduct and Protocols: set out the claim clearly, enclose or list key documents, say what you want and by when, and allow a reasonable time to reply — typically 14 days in a straightforward case.
The Pre-Action Protocol for Debt Claims applies to claims against individuals, including sole traders. Do not send that sole-trader pack to a limited company. Company-versus-company debts follow the Practice Direction. More: letter before action for business debts and the money page letter before action.
Diarise the reply window. Silence after a proper LBA is a commercial signal to escalate, not a court order for payment.
Assert Late Payment Act rights where they apply
GOV.UK explains that you can claim interest and debt recovery costs if another business is late paying for goods or a service. On a qualifying commercial contract, the Late Payment of Commercial Debts (Interest) Act 1998 can add statutory interest and fixed compensation once payment is late.
Section 5A sets fixed compensation once statutory interest begins to run: £40, £70 or £100 per qualifying late payment, by debt band, with a further right to claim reasonable recovery costs not met by that sum. Interest is generally 8% above the relevant Bank of England base rate snapshot.
Adding interest and compensation strengthens a proportionate LBA. It does not compel payment, and it does not automatically pass every pound of a partner’s commission to the debtor. Confirm the Act applies before you assert figures.
When to instruct a partner vs issuing a court claim
After an ignored final demand and a proper Practice Direction LBA with no genuine dispute:
- 1. Partner instruction — introduce the file for pre-legal commercial chase. On files introduced through this site, partners usually work on a fixed percentage / commission of what they recover (often structured as no-collection, no-fee), agreed in writing before they act. Marketing on this site describes 15% only when the client is paid. This guide is free. Recovery is not free and is not guaranteed. See business debt collection and debt collection agency.
- 2. County court claim — you decide whether to issue. GOV.UK explains how to claim money owed. Issuing is not payment. Court fees and solicitor costs are separate from a partner’s contingent commission. We do not issue proceedings.
Partners can chase professionally; they cannot pretend to be High Court Enforcement Officers, invent FCA authorisation, or guarantee recovery.
Pause if disputed or insolvent
Pre-legal collection is for undisputed commercial debt. Pause and take advice where the company raises a genuine issue of substance in writing; you billed the wrong entity; or Companies House shows a formal insolvency process that changes how creditors must claim.
A late, undocumented excuse after months of silence is not a new payment term. Document the dispute, reply in writing, and only instruct on the clean balance you can still prove. Related: what to do when a business ignores your invoice.
A calm sequence after the ignored final demand
- 1. Re-confirm company name, number, status, and registered office.
- 2. Tighten the evidence pack and keep a record of the ignored final demand.
- 3. Send a Practice Direction letter before action; diarise about 14 days.
- 4. Include Late Payment Act interest and compensation where the contract qualifies.
- 5. If still unpaid and not genuinely disputed, instruct a partner on fixed-percentage terms, or decide whether to issue a claim yourself.
- 6. Stop escalation if insolvency or a real dispute appears.
Frequently asked questions
What should I do when a limited company ignores a final demand? Confirm the legal entity and that it is still trading, send a Practice Direction letter before action with your evidence, claim Late Payment Act rights where they apply, then instruct a collection partner or consider a court claim if the debt remains undisputed.
Is a final demand the same as a letter before action? No. A final demand is usually the last credit-control chase. An LBA under the Practice Direction is a formal pre-action step that sets out the claim, documents, and a clear deadline before court is contemplated.
How long should I wait after the LBA? Practice Direction guidance points to a reasonable time — typically 14 days for a straightforward debt. Diarise it. Do not treat silence as automatic payment.
Can I chase the director personally because the company ignored me? Usually no. The company is the debtor unless you hold a personal guarantee or another basis for personal liability. Check the paperwork before writing to an individual.
Is recovery free after a final demand is ignored? No. This guide is free. Partner recovery is usually a fixed percentage / commission of recovered sums (often no-collection, no-fee; marketing: 15% only when the client is paid), agreed before they start. Recovery is not guaranteed.
Can Debt Collection UK sue the limited company for me? No. We introduce B2B files to independent partner agencies. We are not solicitors and we do not conduct litigation. You remain the creditor if court action is needed.
When a final demand has failed on an undisputed limited-company balance, upload the invoice and terms rather than another polite reminder. This guide is free. Instructing a partner is not: fees are usually a fixed percentage of what they recover (often no-collection, no-fee; 15% only when the client is paid), agreed before they start. Recovery is not guaranteed.