Guide · Any country · Getting paid

Client disputes your invoice or pays only part: what freelancers can do (US, UK, Canada)

A client says the invoice is wrong, or pays some of it and goes quiet. Here's a calm way to find out what's actually disputed, get the agreed part paid, correct the paperwork properly, and what the IRS, HMRC and CRA say if the money never arrives.

General information, not legal or tax advice. Not written or reviewed by a lawyer or accountant. The steps and emails are ours; the official items come from the US, UK and Canadian pages linked below, and none of them is a freelance law. Elsewhere was not checked. Official pages were read on 2026-10-15.

The short answer

Reply quickly and ask exactly which items are disputed and why.
Ask for the part nobody disputes to be paid on the original terms.
Check the invoice against what was agreed and approved, then fix, reduce or stand firm — in writing.
If you agree a lower amount, issue a credit note that points to the original invoice; don't edit the old one.
For part payments, confirm what arrived and the balance still due.
If it never gets paid: the IRS says cash-method taxpayers generally can't deduct unpaid fees, and under the UK cash basis income is only recorded when it's received; the CRA lets you deduct a bad debt you already included in income. Sales-tax relief (UK VAT, Canada GST/HST) has its own conditions.

1. Disputed or just late?
2. What to do when a client disputes an invoice
3. When a client pays only part
4. If you agree a lower amount: credit notes
5. Late fees and interest while a dispute is open
6. Outside help
7. If you never get paid: bad debts and tax
8. Emails to copy
9. Checklist
Free tools and kits
Where the sources differ
When to get advice
Related
Sources

1. Disputed or just late?

A late invoice is one the client accepts but hasn't paid; for that, use a reminder schedule — see how to chase an unpaid freelance invoice. A disputed invoice is one the client says is wrong: the amount, the work, or why it was issued. Reminders won't fix that; a conversation will.

The UK's Office of the Small Business Commissioner puts it this way: "If a client disputes the validity of an invoice— whether the amount charged or the reason it was issued —they are entitled to dispute an invoice. In such instances, they should make contact promptly in order to seek resolution prior to the payment due date." And: "Although there is no statutory timeframe within which an invoice dispute must be resolved, all parties are expected to undertake reasonable efforts to address and conclude the matter in a timely and equitable manner." (OSBC: FAQs, no page date shown). It also lists "Excessive delays in resolving invoice dispute." as a poor payment practice.

That's UK guidance for businesses, but the idea travels: a client may question an invoice, should say so promptly, and both sides should try to settle it within a reasonable time.

2. What to do when a client disputes an invoice

Our steps, as general practice (not an official list):

Step	Why it helps
Reply quickly and ask what exactly is disputed	A vague "we are not happy" can't be fixed. Ask which line, which deliverable and what they expected instead.
Split the invoice into agreed and disputed parts	Often only one item is in question. Ask for the agreed part to be paid on the original terms while you sort out the rest.
Check the paperwork, not memories	Compare the invoice with the signed quote, proposal or statement of work, any change orders, and the sign-off emails.
Decide between a fix, a reduction or standing firm	Fixing work that misses agreed criteria is usually cheaper than arguing. New requests are changes, not fixes.
Put the outcome in writing	One short email that says what was agreed, what is still owed and by when avoids a second dispute about the first one.
Correct the paperwork the right way	Don't quietly edit a sent invoice. If you agree a lower amount, issue a credit note that points to the original invoice.
Keep a short dated log	Who said what and when, with copies. If you later need outside help or a tax write-off, you will need it.

Where the paperwork helps most: deliverables and acceptance criteria in a statement of work, written sign-off at handover, and change orders for extra work. If those are missing, agree them for the next job.

3. When a client pays only part

Record exactly what arrived, on which date, against which invoice. Don't issue a fresh invoice for the same work; the original invoice stays open for the balance.
Confirm it in writing with the balance still due (email below). Our free receipt generator does part payments, and the invoice guide shows how a part payment appears on the next invoice or reminder.
Ask what the short payment means. Is it a mistake, cash-flow trouble, or a silent dispute? Each needs a different reply: a correction, a payment plan in writing, or the steps above.
Don't agree to "paid in full" by silence. If a payment comes with a note saying it settles the invoice, reply in writing before treating it that way. Whether cashing such a payment changes what is owed depends on local law, which we did not check.

4. If you agree a lower amount: credit notes

General practice: leave the sent invoice as it is and issue a credit note with its own number and date, naming the original invoice and the amount credited. Then the client's books and yours agree. The basics are in our invoice guide; the official rules below only apply if you are registered for VAT or GST/HST.

UK VAT (HMRC): VAT Notice 700 paragraph 18.2.3 says a valid credit note must "reflect a genuine mistake or overcharge or an agreed reduction in the value of the supply, and be issued within 14 days of the refund payment being made to the customer", among other conditions. "If you issue a credit note or supplementary invoice to correct an error in a VAT invoice, it should bear a reference to the number and date of that VAT invoice and show clearly both the correct and incorrect amounts of VAT." "If credit notes are issued without a VAT adjustment, they should state ‘This is not a credit note for VAT’." (HMRC: VAT Notice 700, page date 2026-06-25).
Canada GST/HST (CRA): "When a supplier refunds, adjusts, or credits an excess amount, or tax on consideration that has subsequently been reduced, to another person (i.e., the recipient), the supplier is required to issue a credit note including prescribed information within a reasonable time to the other person, unless the other person first issues a debit note to the supplier." "However, no corresponding adjustment to net tax is permitted unless a credit note or debit is issued." (CRA: GST/HST Memorandum 12-2, page date 2008-04-10).
US and elsewhere: we did not check state sales-tax rules or other countries' credit-note rules for this page. A credit note is still a clear record.

5. Late fees and interest while a dispute is open

UK: "You cannot claim interest or compensation for an invoice that has been disputed, legitimately, by a debtor. Late payment charges can be applied if an invoice has been accepted, but payment has not been made within the agreed payment times." (OSBC: FAQs). For how statutory interest and compensation work once an invoice is simply late, see our UK late payment interest calculator.

US, Canada and elsewhere: late fees usually come from what you agreed in writing and from local law, which this page does not cover. See late fees in invoice payment terms and, for Canada, our Canada late payment guide. General practice: charge late fees only on the amount nobody disputes, and only if your terms allow it.

6. Outside help

UK — Office of the Small Business Commissioner: "If you run a small business in the UK and have an unresolved payment dispute with a larger customer, which you have been unable to resolve, we may be able to help." (OSBC: Make an enquiry, no page date shown).

Who: "We define a small business as any firm with fewer than 50 employees." "We define a larger business as any firm with more than 50 employees." "The Small Business Commissioner can only investigate disputes between small and large businesses."
Cost: "There is no charge to use our services."
When: "Complaints regarding non-payment should be submitted within 12 months of the payment due date." "Additionally, we may not be able to progress your complaint if you have not made reasonable efforts to resolve the matter directly with your customer."
Where: "We can only investigate complaints about businesses where they have some form of UK presence, for example an office or factory in the UK (United Kingdom)."
What it isn't: "We are not qualified to provide legal advice and contracts are legal documents." (all from OSBC: FAQs)

Courts and small claims (US, UK, Canada): our chase guide covers the UK money claim route and examples of Canadian provincial small claims courts. US small claims courts are run by each state; we did not check them.

7. If you never get paid: bad debts and tax

Whether you can deduct an unpaid invoice depends mostly on whether you already counted it as income. None of these pages is about freelancers by name.

Where you're taxed	What the official page says
United States (IRS)	"Generally, to deduct a bad debt, you must have previously included the amount in your income or loaned out your cash. If you're a cash method taxpayer (most individuals are), you generally can't take a bad debt deduction for unpaid salaries, wages, rents, fees, interests, dividends, and similar items of taxable income." For business bad debts: "You may deduct business bad debts, in full or in part, only if the amount you were owed is included in your gross income in the current or prior year." "A debt becomes worthless when the surrounding facts and circumstances indicate there's no reasonable expectation that the debt will be repaid. To show that a debt is worthless, you must establish that you've taken reasonable steps to collect the debt." "You may take the deduction only in the year the debt becomes worthless." (IRS: Topic no. 453, Bad debt deduction, page date 24-Sep-2026).
United Kingdom: income tax (GOV.UK)	"Cash basis accounting is the standard way to record your income and expenses if you’re a sole trader or partnership without corporate partners. With cash basis you only record income or expenses when you receive money or pay a bill." "This means you’ll not need to pay Income Tax on money you have not yet received." If you chose traditional accounting instead: "With traditional accounting you record income and expenses by the date you invoiced or were billed." (GOV.UK: Cash basis, page date 2021-07-21). We did not check how unpaid invoices are written off under traditional accounting.
United Kingdom: VAT (HMRC)	VAT bad debt relief, VAT Notice 700/18. Conditions include: "You must already have accounted for the VAT on the supplies and paid it to HMRC." "You must have written off the debt in your day to day VAT accounts and transferred it to a separate bad debt account." "The debt must have remained unpaid for a period of 6 months after the later of the time payment was due and payable and the date of the supply" (the notice lists more). "As a general rule, relief must now be claimed within 4 years and 6 months of the later of the date payment was due and payable or the date of supply." "If you have received a part payment for the debt, you can only claim a refund on the VAT relating to the amount that is still unpaid." "To claim a refund you should include the amount of the VAT you’re claiming in box 4 of your VAT Return which covers the date when you fulfil the conditions to make a claim." (HMRC: VAT Notice 700/18, page date 2025-09-18).
Canada: income tax (CRA)	Line 8590 (Bad debts): you can generally deduct a bad debt if you had determined that an account receivable is a bad debt in the year and you had already included the account receivable in income (CRA: Line 8590, page date 2026-08-31).
Canada: GST/HST (CRA)	"If the bad debt is part of an amount that you have already included on your GST/HST return and you remitted that amount, you can recover the GST/HST as a tax adjustment on line 107 (or line 108 if you are filing using GST/HST TELEFILE)." "You have to make the tax adjustment in a reporting period that is within 4 years of the reporting period in which you wrote off the bad debt in your records." "The debt has to be written off as a bad debt in your records, and you have to deal with the person at arm's length." (CRA: Instructions for preparing a GST/HST return, page date 2021-04-27). Quick Method filers have different rules, which we did not check.
Elsewhere	We have not checked other countries' rules. Ask your tax authority or an accountant.

Keep the invoice, the dispute emails, your log of collection steps and any credit notes with your business records. Country guides: US Schedule C, UK Self Assessment, Canada T2125; Canada GST/HST and income-tax bad debt basics are also in our Canada late payment guide.

8. Emails to copy

Replace everything in [brackets]. These are ours, not from any agency, and they're not legal advice. Keep the tone calm; the goal is to get paid and keep the paper trail clear.

Replying to a dispute

Subject: Invoice [invoice number]: what isn't right?

Hi [name],

Thanks for letting me know about invoice [invoice number]. I'd like to sort this out quickly.

Could you tell me which items or deliverables you're unhappy with, and what you expected instead? A line from the invoice and a sentence on each is plenty.

For reference, the work was agreed in [quote / proposal / statement of work] on [date], and [deliverable] was approved on [date].

[Your name]

Asking for the agreed part to be paid

Subject: Invoice [invoice number]: paying the agreed part now

Hi [name],

Thanks for explaining. As I understand it, the question is only about [item], which comes to [amount].

The rest of the invoice, [amount], isn't in question. Could you pay that part by [original due date / new date] while we sort out [item]?

For [item], I suggest [a fix by date / a reduction of amount / a short call on date]. Let me know which works for you.

[Your name]

Confirming a part payment and the balance

Subject: Payment received for invoice [invoice number]: balance [amount]

Hi [name],

Thank you. I received [amount] on [date] towards invoice [invoice number].

The remaining balance is [amount], due [date / as agreed on date]. A receipt for this payment is attached.

If you meant this payment to settle the invoice in full, please tell me so we can talk about the difference. I haven't agreed to reduce the invoice.

[Your name]

Confirming an agreed reduction with a credit note

Subject: Invoice [invoice number]: agreed adjustment

Hi [name],

Thanks for talking this through. As agreed on [date], I'm reducing invoice [invoice number] by [amount] for [reason].

Attached is credit note [credit note number], which refers to invoice [invoice number]. The amount now due is [amount], by [date].

[Your name]

If the client stops replying altogether, switch to the reminder emails in our chase guide.

9. Checklist

Replied quickly and asked which items are disputed and why.
Asked for the undisputed part to be paid on the original terms.
Checked the invoice against the quote, proposal or statement of work, change orders and sign-off.
Agreed a fix, a reduction or no change, and confirmed it in one email.
Any reduction made with a credit note pointing to the original invoice (VAT or GST/HST rules if registered).
Every part payment recorded and confirmed with the balance due.
Late fees only on undisputed amounts, and only if your terms and local law allow.
A dated log of every step, kept with the invoice.
If it's still unpaid: outside help or a claim considered, and the tax treatment checked for where you're taxed.

Free tools and kits

Free receipt generator (paid in full or part payment) and free invoice generator.
Our paid Freelance Billing Kit by Small Rows (US$12, one-time) records each payment against its invoice, so a part payment shows as Part paid with what's still owed. It doesn't make credit notes or track what a dispute is about — keep those with your records.
Our paid Quote & Proposal Kit by Small Rows (US$12, one-time) prints a quote or proposal with scope and terms you can point back to. It can't stop a client disputing an invoice.
All three kits together: the All-Kits Bundle by Small Rows (US$24, one-time).

Where the sources differ

Disputes: of the pages quoted here, only the UK OSBC FAQs deal with invoice disputes directly, and they are guidance from a public body, not the text of a law.
Unpaid income and tax: the IRS says cash-method taxpayers generally can't deduct unpaid fees; GOV.UK says cash basis only records income when received; the CRA lets you deduct a bad debt you already included in income.
Sales tax: UK VAT relief needs the debt written off and unpaid for the stated period; Canada's GST/HST adjustment needs a write-off, an arm's-length customer and a claim within the stated time.
What we did not check: US state law (including whether cashing a "paid in full" payment settles a debt), state small claims and state sales-tax credit memos; the UK late payment legislation itself and any announced changes to it; Scotland and Northern Ireland court procedures; UK traditional-accounting write-offs; the CRA Interpretation Bulletin IT-442 (linked from the line page) and the Quick Method detail; Canadian provincial law, including Quebec; other countries.

When to get advice

the amount in dispute is large for you, or the client says the work was defective and wants money back;
the client threatens legal action, or you are thinking of a court claim;
a payment arrived marked as full and final settlement;
you are about to claim VAT bad debt relief, a GST/HST bad debt adjustment or a bad debt deduction and aren't sure you qualify;
the client may be insolvent.

Ask a lawyer or accountant where you work. This page is general information only.

Sources

United States: IRS: Topic no. 453, Bad debt deduction (page date 24-Sep-2026)
United Kingdom: Office of the Small Business Commissioner: FAQs (no page date shown) · Make an enquiry (no page date shown) · HMRC: VAT Notice 700 (page date 2026-06-25) · HMRC: VAT Notice 700/18, relief from VAT on bad debts (page date 2025-09-18) · GOV.UK: Cash basis (page date 2021-07-21)
Canada: CRA: Line 8590, Bad debts (page date 2026-08-31) · CRA: Instructions for preparing a GST/HST return (page date 2021-04-27) · CRA: GST/HST Memorandum 12-2 (page date 2008-04-10)

Checked 2026-10-15. Found a mistake? Tell us via Support.