Did you know if you are a limited company or a limited liability partnership having £36 million annual turnover, £10 million balance sheet total and/or 250 employees, you must report on your payment practices, policies and performance?
This must be done on a half-yearly basis for financial years beginning on or after 6 April 2017.
The aim is to tackle late payments, which are a key issue for businesses, especially smaller businesses, adversely affecting their cash flow and jeopardising their ability to trade.
In essence, businesses must prepare and publish information about their payment practices and performance in relation to contracts which satisfy all of the following:
• It is between two or more businesses
• It is sufficiently linked to the UK
• It is for goods, services or intangible property, including intellectual property
• It is not for financial services
The report must be published on a web-based service provided by government within 30 days of the end of the reporting period and be approved by a named company director or, for LLPs, a designated member.
It is a criminal offence by the business, and every director of the company, or designated member of an LLP, if the business fails to publish a report, containing the necessary information, within the specified filing period of 30 days.
Anyone who publishes a report or information (this could be an individual or a business), or makes a related statement, which is misleading, false or deceptive, commits a criminal offence if they know, or were reckless about it being false or misleading at the time it was made.
For further guidance on the statutory duty for companies and LLPs to report on payment practices and performance or to publish a report visit: https://www.gov.uk/government/publications/business-payment-practices-and-performance-reporting-requirements
Before you enter into a contract with large companies you may wish to search against those companies at https://check-payment-practices.service.gov.uk/search