You do not need a contract to be written for it to stand. The mere fact that she has been paying you to work for her is a contract in itself .(see the Cizizens Advice Buearau website). Giving her a months notice is very fair of you and she has absolutely no right to hold any money owing to you. As I say, the CAB website will give you all the info you need regarding contracts and rights so have a look, but you have no worries on a legal level. As for your resignation letter, I would just be very polite and thank her for your time working for her company but you feel that it's now time to move on to a new challenge - something along those lines. Good Luck x