New duty to report on payment practices
The Department for Business, Energy and Industrial Strategy has published the Government’s response to its consultation on a “Duty to Report on Payment Practices and Policies”.
This sets out how the duty of large businesses to report on payment practices under s.3 of the Small Business, Enterprise and Employment Act 2015 is to be implemented. The response includes the draft regulations.
The new rules will require large companies and large limited liability partnerships to publish information about their payment practices and performance twice a year on a government web service. For these purposes this means companies that exceed two or all of the following categories:
- over £36m turnover;
- over £18m balance sheet total;
- over 250 employees.
The report must include the following:
- narrative descriptions of the organisation’s payment terms and process for dispute resolution regarding payment;
- statistics on, amongst other things, average time taken to pay invoices from the date of receipt and the percentage of invoices paid within 30 days or less, 31-61 days and over 60 days (within the reporting period); and
- statements on, amongst other things, whether the organisation offers e-invoicing and supply chain finance and whether the organisation’s practices and polices cover deducting sums from payments as a charge for remaining on a supplier’s list and whether they have done this during the reporting period.
BEIS expects the regulations to come into force on 6 April 2017.