Revised draft Regulations and draft BEIS guidance published
Section 3 of the Small Business Enterprise and Employment Act 2015 (SBEE) was introduced to give the Secretary of State power to impose a requirement on companies to publish information about their payment practices and policies and their performance by reference to those practices and policies. This was to address concerns about suppliers being treated unfairly by larger powerful customers.
Section 3 came into force in May 2015 and the duty to report was originally intended to apply from April 2016. The government now expects the regulations to come into force for financial years beginning on or after 6 April 2017. Revised draft Regulations have recently been published and laid before Parliament.
This will mean that, from 6 April 2017, large companies (both private, public and quoted) and LLPs must publish prominently specified information about their payment of suppliers, including the average time it takes to pay suppliers, on a government website which must be updated every 6 months.
One change to note in the revised draft Regulations is that the name of the director who approves the information to be published must now also be included in the information provided. Although companies are not required to include payment practice details in their annual reports, it is expected that some companies will do so.
The Department for Business, Energy & Industrial Strategy (BEIS) published guidance at the end of January for companies and LLPs that must comply with statutory reporting of payment practices and performance from April. The guidance sets out:
- who needs to report ie which companies and LLPs are within the scope of the requirement
- what needs to be reported
- when and where the information must be reported.
The Reporting on Payment Practices and Performance Regulations 2017 can be found here, the Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017 can be found here and the BEIS guidance here.