Two different terms cover similar ground in UK debt recovery, and mixing them up is a common, avoidable mistake. A letter before action applies under the general Practice Direction on Pre-Action Conduct and Protocols — the right term when the debtor is a limited company or a partnership, which covers most B2B invoicing. A letter of claim, by contrast, applies specifically under the Pre-Action Protocol for Debt Claims, and only when the debtor is an individual or a sole trader; it also gives a longer response window, 30 days rather than 14.
For a standard unpaid invoice owed by another business, letter before action is the correct term and the correct procedure. It needs to set out the debt in full — amount, how it arose, any interest and compensation already accrued — and give a reasonable period to respond, typically 14 days, before proceedings start. Skipping this step, or not giving a fair chance to respond, can count against a claimant later, even if they go on to win the case.
