Guidance to help large businesses report their payment practices have been published ahead of measures coming into force in April 2017.
Large firms and limited liability partnerships (LLPs) will be required to report twice a year on their payment practices and performance.
This also includes the average time taken to pay their suppliers.
At the time of publication, the following thresholds for reporting will apply:
- £36 million annual turnover
- £18 million balance sheet total
- 250 employers
The new rules apply to businesses and LLPs who exceed 2 or more of the thresholds.
The reporting must include the following payment practices:
- Standard payment terms, including contractual time for payments of invoices, maximum
- Contractual payments and changes to standard payment terms
- How suppliers will be notified on changes
- Average number of days taken to make payments from date of invoice
- Payments made within 30 days or fewer, 31 and 60 days and 61 days or longer
- Payments due which were not paid within agreement terms.
Businesses who fail to report payment practices could face a penalty fine or be prosecuted.
Margot James, small business minister, said:
“Large businesses have an important role to play and the guidance published will help them fulfil their responsibilities and improve payment practices across the board.”
Talk to us today about your business compliance.