Recruitment agency unpaid invoices are rarely one generic ledger line. A permanent placement fee, a weekly temp timesheet, and a retained search instalment each need different proof — and each can stall for different commercial reasons.
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. Recovery is not guaranteed.
Why recruitment debts stall
Agencies fund payroll or wait on a large one-off fee while the client stretches terms, disputes a rebate window, or simply stops answering. Temp and contractor invoices build week by week. Permanent fees often crystallise on start date, then meet a “candidate left” rebate argument months later.
Neither pattern invents a new statute. Qualifying B2B supplies still sit under the Late Payment of Commercial Debts (Interest) Act 1998 and the ordinary pre-action rules. What changes is the paper trail you must assemble before a formal demand or business debt collection instruction looks credible.
Temp and contractor invoices vs permanent fees
Temp and contractor invoices usually rest on an agreed hourly or daily rate, approved timesheets (or electronic time records), and the client’s terms of business for supply of labour. The claim is for work already performed and billed. Gaps in timesheet approval, a missing PO, or a verbal “cap” that never made the written terms are the usual weak points.
Permanent placement fees rest on the introduction, the offer and acceptance, the start date, and the fee clause (percentage of salary, fixed fee, or staged retainer). Rebate or refund wording matters. A client who says “they left in week six” is not automatically right — only the signed terms decide whether a rebate is due, and for how much.
Keep the two file types separate when you chase. Mixing a disputed rebate on a permanent fee with clean weekly temp invoices confuses the demand and invites a blanket dispute.
What proof you need before you escalate
Before a formal letter or a debt collection agency partner takes the file, gather:
- signed or clearly accepted terms of business (or a purchase order that incorporates them);
- the vacancy brief, confirmation of introduction, and (for permanent fees) offer letter or start confirmation;
- invoices with numbers, dates, amounts and due dates;
- approved timesheets or timesheet emails for temps;
- a statement of account showing payments received and the balance;
- any rebate calculation the client relies on, and your response.
Without that pack, chasing becomes negotiation by assertion. With it, unpaid invoices can move to a structured demand.
When is a recruitment invoice legally late?
GOV.UK states 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, statutory interest and fixed compensation are rights under the 1998 Act — they are not a free collection service.
Section 5A sets fixed compensation once statutory interest runs: £40, £70 or £100 per 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. Confirm the Act applies to your contract (business supply of services; not consumer or employment contracts) and that payment is actually past the relevant day.
Adding interest and compensation to a statement does not compel payment. It strengthens a proportionate demand when the invoice itself is sound.
Sole trader client or limited company?
Who you invoiced decides the pre-action letter.
The Pre-Action Protocol for Debt Claims applies when a business claims a debt from an individual, including a sole trader. It does not apply to business-to-business debts unless the debtor is a sole trader. Company versus company sits outside it.
If the client is a limited company or LLP, follow Practice Direction – Pre-Action Conduct and Protocols: a concise letter setting out the claim, a reasonable time to reply (14 days in a straightforward case), and key documents. That is what commercial recovery usually calls a letter before action.
If the client is a sole trader, use a Debt PAP Letter of Claim with the Information Sheet, Reply Form and Financial Statement, and the protocol’s 30-day timetable. Full detail: Debt PAP: sole traders vs limited companies. Check Companies House and the invoice name before you write.
Disputes that pause collection
Pre-legal collection is for undisputed commercial debt. Pause and take advice where there is a genuine issue of substance, for example:
- the candidate never started, or the introduction is denied;
- a written rebate clause clearly reduces or extinguishes the fee;
- timesheets were rejected in writing at the time for a specific reason;
- the wrong legal entity was invoiced.
A late, undocumented excuse after months of silence is not a new payment term. Document the dispute, reply in writing, and only instruct collection on the clean balance you can still prove.
A proportionate recovery path for agencies
- Confirm the debt is past due and the legal debtor’s name.
- Send a clear final reminder with the statement and core attachments.
- If ignored, send the correct pre-action letter (Practice Direction LBA for a company; Debt PAP Letter of Claim for a sole trader).
- If still unpaid and not genuinely disputed, instruct specialist business debt collection via a partner.
- You decide whether to issue a county court claim. GOV.UK explains that you can claim money owed by a person or business online or by post. Issuing is not payment. We do not issue proceedings.
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. This guide is free. Recovery is not free and is not guaranteed.
Frequently asked questions
Can I recover unpaid temp invoices and permanent fees the same way?
The pre-action and late-payment framework is the same for qualifying B2B supplies. The evidence differs: timesheets and rates for temps; introduction, start date and fee/rebate terms for permanent placements.
Does the Late Payment Act apply to recruitment agency fees?
Often yes, where both sides act in the course of a business and the contract is for the supply of services. Confirm your contract is in scope. Consumer placements and employment contracts sit outside this site’s B2B path.
What if my client is a limited company ignoring the invoice?
Use a Practice Direction letter before action, allow a reasonable time (typically 14 days for a straightforward debt), then escalate. Do not apply the Debt PAP 30-day sole-trader pack to a company debtor.
Can Debt Collection UK take the client to court 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.
Is recruitment debt collection free?
No. The guide is free. Partner recovery is usually a fixed percentage / commission of recovered sums (often no-collection, no-fee), agreed before they start. Recovery is not guaranteed.
When should I stop internal chasing and instruct a partner?
When reminders have failed, the documents support the balance, and there is no genuine dispute worth trying. Upload the invoice and terms via the secure form rather than sending another polite chase into silence.
This guide is free. Instructing a partner to recover an overdue commercial invoice is not: fees are usually a fixed percentage of what they recover (often no-collection, no-fee), agreed before they start. When chasing has stalled on temp or permanent fees, pass the file via unpaid invoices or business debt collection.