Payment Terms, Agreements, Late Payment and Invoicing

This Content Was Last Updated on March 10, 2024 by Jessica Garbett


Terms of Business

If you are working for others, including corporate clients, gyms or studios on a Self Employed basis, or you are engaging others to work for you, eg a Studio engaging teachers, then its important to document the terms.  Its a sad fact that the ethical approach of yoga isn’t always carried over to business, and many disputes can occur – they are easier to resolve if you have an agreement to refer to.

This can be by a formal legal agreement, or more simply and in many cases adequately, by an exchange of letters / emails.  Important points to cover are:

  • Employed or self employed – normally self employed so state this
  • The tasks to be done, eg the class schedule, or other tasks like assisting or running a workshop
  • Place and time the tasks are to be carried out
  • Payment rate
  • Payment and invoicing terms
  • Any special arrangements or requirements

It is a common sense approach, and clarity is more important than perfection.  Obviously both parties need to agree to the arrangement, and keep a copy.

If you have larger value contracts, it may be worth taking legal advice,

Where Self Employed it makes sense for invoices to be raised for work done, and for these to have clear payment terms on them, eg “Payment due within 14 days.  Interest at 8% over base on late payment”

If the engagement is employed, then there are a number of specific obligations – see our guide to Employing Someone


Late Payments

What happens if you are not paid by a client, eg gym, corporate client or studio, or if there is a dispute?

First you must consider the nature of your engagement – Employed or Self Employed – and the contract be it written or verbal.  If these points aren’t clear then you will end up wasting time and effort.  Countless times people seek advice about not being paid but are not clear on these fundamentals, for example referring to unpaid wages when they are self Employed, and conflating Employment and Self Employment.

If you are Employed then there are a number of specific protections at law – we recommend ACAS for assistance.

If you are Self Employed then there are various issues to consider:

  • First, you need to consider the terms of the agreement?  Ideally these will be documented formally, if not were there informal email exchanges or an oral agreement (can be hard to evidence)?
  • Secondly, after informal chasing, a formal letter and statement is sensible.  Consider whether you can add interest or credit charges – see below
  • If this fails, then you may need to consider either consulting a solicitor or a Small Claims Court claim – the relationship will probably have broken down by now
  • It is possible to do a simple Small Claims Court claim yourself  – see below.
  • It may also be worth considering whether you have some protections as a Worker (sometimes called “limb B worker”) under Employment Law.  This is complex, you will need advice, and it’s an emerging area of law which bridges the traditional Employment v Self Employment divide.

Legislation helps with late / non payment as well. Specifically Late Payment of Commercial Debts (Interest) Act 1988 as amended by EC Directive 2000/35/EC.  See the simple guide to this by HM Government. These rules stipulate the following where there is no agreement to the contrary i.e. no agreement or the agreement is silent on these points:

  • A payment is late after 30 days
  • Late payment (after thirty days or whatever else is agreed) is subject to interest at 8% over base (simple daily rate not compound)
  • Credit charges can be added to the debt at prescribed rates:
    • Debts of up to £999.99 – £40
    • Debts £1,000 to £9,999.99 – £70
    • Debts over £10,000 – £100

These are useful provisions as only court costs, and not legal fees, can be recovered in a Small Claims Court action.

It is stressed again these rules only apply to the extent of silence in any other agreement.

If you have an overdue amount that is becoming problematic then It is possible to do a simple Small Claims Court claim yourself.  As a first step its good practice to send a Letter Before Action, and a simple template is below – give a 14 day payment deadline at least:

AMOUNT  £xxxx

Dear xxxxxxxxxx

Despite previous reminders the above invoice remains outstanding.

Please make payment no later than 9am on xxxxxxx otherwise Small Claims Court action will be taken without further notice.

Yours faithfully

Yoga Teacher

If the Letter Before Action doesn’t elicit either payment or negotiation, then you can use Money Claim Online which is a Government service (as always watch out for imposters, check you are going to a .gov.uk URL)  – but you do need to be spot on with your paperwork as there tends to be a “rough justice” approach



If you are working for a commercial client, including Gyms, Studios, Corporate Clients, you may need to send an invoice for work you are doing.

  • It is good practice for credit control and removes one of the excuses for non payment
  • It helps manage  the business relationship
  • Invoices are part of your accounting records

Here is an invoice template – You can download it for your own use in Word

Here is an example invoice in PDF – opens in new window