The Government have recently published their intentions for the Reporting on Payment Practices and Performance Regulations 2017, to be further enhanced and amended. The current regime is set to expire on 6 April 2024.
Under the provisions of the current regime, “qualifying companies” and “qualifying LLPs” have a duty to report every six months setting out their practice in respect of supplier invoices, as well as statistics for their actual performance in paying invoices over the preceding year.
For clarity, “qualifying companies and qualifying LLPs” are defined in the Companies Act 2006 as companies or LLP’s meeting at least two out of the following criteria: –
• Turnover of more than £36 million;
• Balance sheet total of more than £18 million; and
• More than 250 employees
The proposed amendments to the existing regime will introduce a new requirement in respect of reporting on the volume of disputed invoices as well as the total value of payments made during those periods. In addition, there will also be a requirement regarding reporting on retention payments for businesses in the construction sector.
The purpose of this amendment and extension of the current regime, is to enhance UK businesses by introducing stronger and more rigorous principles regarding payments as well as providing business with more data allowing for more clarity and certainty in respect of their business.
The amendment will hopefully have a significant positive impact on smaller businesses who may not have the requisite resources to continuously receive delays in receiving payments as well as further chasing for outstanding payments to be made to them. This has been a massive hindrance for small businesses over the years and the proposed amended regime will aim to resolve this.
Paying small businesses on time could boost the economy by £2.5 billion annuallyhttps://www.gov.uk/government/news/government-takes-action-to-back-small-businesses-and-tackle-late-payments?utm_content=immediately