Under new rules that come into force in April 2017, large firms will have to publish details of their payment practices and performance on a website that is being set up by the Department for Business, Energy & Industrial Strategy (BEIS).
This will boost transparency of payment practices to help small and medium-sized businesses (SMEs). Regulations laid in parliament today by Small Business Minister Margot James will make large businesses publish details on the time taken to pay their suppliers to shine a light on bad practice. Latest figures show SMEs are owed £26.3 billion in overdue payments.
Will this apply to your company?
If the large business and limited liability partnerships meet two or more of the following criteria on both of their last two balance sheet dates
- over £36 million annual turnovers;
- over £18 million balance sheet total;
- over 250 employees.
It will apply regardless of whether the entity is public, private or quoted.
The regulations confirm that from April 2017, large companies and limited liability partnerships (LLPs) will have to publically report twice a year on their payment practices and performance, including the average time taken to pay supplier invoices.
Large companies and their directors will face criminal proceedings and fines and the guidance published today will help large businesses and limited liability partnerships prepare for these measures coming into force.
Recent findings from the payment processor Bacs report that nearly half of the UK’s small-to-medium-sized businesses experience late payment, with £26.3 billion owed to them in total. The regulations laid in Parliament today aim to tackle this by increasing transparency and helping small businesses make informed decisions about who they do business with.
Watch this space!