New payment reporting rules for large companies and LLPs

Large companies and Limited Liability Partnerships (LLPs) will be required to publicly report about their payment practices twice a year, from 6 April 2017. The report will include details about their payment terms, the average time taken to pay invoices from the date of receipt of invoice; the percentage of invoices which were paid in 30 days or fewer, between 31 and 60 days, and over 60 days; and the proportion of invoices which were not paid within agreed terms.

The Government has published guidelines to help large businesses and LLPs prepare for when the new regulations come into force. Failure to report will be a criminal offence, reinforcing just how seriously the Government are taking the issue of late payments.

Margot James MP, Minister for Small Business, Consumers and Corporate Responsibility says: “This new reporting requirement for the UK’s largest companies and limited liability partnerships (LLPs) will shine a light on payment practices. It will increase transparency and make payment behaviour a reputational boardroom issue”.

“Unfair payment practices and unnecessary red tape hamper the ability [of small suppliers] to grow and have no place in an economy that works for all.”

In December 2016, BACS had been paid late. The average late payment debt now stands at £32,185 which equates to a substantial £26.3 billion total across the 47 per cent of SMEs that say customers and clients stray beyond agreed payment terms.

The new reporting will help to increase transparency and challenge the late payment culture, as well as assist SMEs to make informed decisions about which large businesses they want to trade with, with a clear view of their payment practices and payment times.