February 03, 2023
Article
Large businesses and LLPs currently have to report their payment practices and policies for key contracts and provide comment as to how the business has performed under these contracts with a view to this information reducing the frequency of late payment of invoices and easing cash flow pressure for businesses. A summary of the current regulations can be found here.
On 31 January 2023 BEIS published a consultation on amendments to the Reporting on Payment Practices and Performance Regulations 2017 and the Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017, which are looking to bolster these regulations. The key points in the consultation are:
- Disclosure in the directors report of payment practices and performance information.
- In group situations disclosure of all payment practices reports, for each group entity, within the directors' report. This is to reduce the risk of masking poor performance in some group entities.
- Confirmation of the accuracy of the payment practice report, for example by a business' audit committee, in addition to inclusion in the directors' report.
- Disclosure of value and volume of contracts which have been paid within each of the disclosable payment time frames
- The impact of supply chain finance, disputed invoices and construction scheme retention payments to be incorporated / reflected in the disclosures
- Potential extension beyond the current expiry date of 6 April 2024, provisionally for a further seven years, with a further review after five years.
The consultation is open for responses until 28 April 2023 with a government response expected 12 weeks after this date. Responses to the consultation can be submitted online: Amendments to the Payment Practices and Performance Regulations 2017 - Department for Business, Energy and Industrial Strategy - Citizen Space or by email: responsiblepaymentculture@beis.gov.uk