This week we remind ourselves of the new invoice payment practices regulations, which have now been published in final form. We also take a look at some proposed changes to the availability of PSC information and an inquiry by the Government on ways to assist start-up business with scaling up.
Payment practices regulations published
The Government has published regulations implementing the new regime requiring large organisations to publish details of their practice of paying supplier invoices. This follows the guidance recently published by the Department for Business, Energy and Industrial Strategy.
- The regime applies to companies and limited liability partnerships (LLPs) that qualify as "large" for accounting purposes for two successive financial periods.
- Entities will need to publish details of their invoice payment practices for financial years beginning on or after 6 April 2017.
- Reports must be made twice a year using a Government website portal.
- The regime applies to invoices relating to business-to- business contracts for goods, services or intangible goods (including intellectual property) which have a significant connection with the UK.
- It applies to both written and unwritten contracts, including where payment is made but no invoice is actually issued.
- The regime does not apply to contracts for financial services, but businesses operating within the financial services sector will need to report on other types of contract.
- Entities need to provide the following metrics: average number of days taken to pay; percentage of invoices not paid by their due date; and percentage of payments made within 30 days of, between 30 and 60 days after, and more than 60 days after receipt of the invoice.
- Entities must provide a description of their standard payment terms for each kind of supplier, product or contract, and an explanation of their procedure for resolving disputes.
- The report must also state whether the entity is signed up to a voluntary payment code and whether it offers e-invoicing, supply chain finance and "pay to stay" facilities.
Treasury proposes to make PSC information available for customer due diligence
The Treasury has published draft regulations to implement the European Union Fourth Money Laundering Directive (4MLD) into UK law. The regulations can be found here. They deal mostly with requirements for regulated entities (such as banks) to carry out customer due diligence.
However, they would also require UK corporate entities to provide certain information to certain kinds of organisation (including banks, auditors, lawyers, accountants and estate agents) as part of their customer due diligence exercise. The information in question includes details of the entity's persons with significant control (or PSCs). (For more information on the PSC regime, see our note here.)
In one sense, this does not impose any greater duty of disclosure on entities subject to the PSC regime. An entity that keeps a PSC register already has to make it available to any person without charge, or provide copies on payment of a fee. The only difference under the draft regulations appears to be that entities will be required to provide the same information without charge where the purpose is to enable an organisation to carry out customer due diligence.
Business scale-up inquiry launched
The Business, Energy and Industrial Strategy Committee (a House of Commons Select Committee) has launched an inquiry into how to help UK start-ups and potential high-growth small businesses become "scale-ups".
Scale-ups comprise a small group of rapidly expanding companies that account for an above-average proportion of the UK's economic growth. For the purpose of its inquiry, the Committee sees the group as normally including enterprises with average annualised growth in employees (or in turnover) of greater than 20 per cent a year over a three-year period, and with 10 or more employees at the beginning of the observation period.
The Committee is inviting written submissions on the following points by Wednesday 3 May 2017:
- How effective recent Government measures have been in supporting scale-ups in the UK and the impact of the Coutu review in overcoming barriers to scale-ups.
- What more needs to be done to improve management and business skills necessary to support scale-ups.
- What data should be collected and made available to better identify potential scale-ups, including businesses led by women.
- What steps the Government should take to improve and incentivise the provision of patient capital, and what mechanisms are in place to ensure that businesses can access this capital.
- Whether there are other regulatory or economic interventions the Government should make to increase the number of successful and high-growth businesses in the private sector.
Further details of the inquiry can be found here.
Companies House maintenance
Companies House will be conducting maintenance on most of its on-line services from 11:59 p.m. on Thursday 13 April to 7:00 a.m. on Tuesday 18 April. The service will be unavailable during these times.
According to the Companies House announcement, this maintenance will affect the WebFiling, XML gateway, WebCHeck and Companies House Direct services. It will not be possible to file information on-line during this period. However, the free Companies House Service (a.k.a. Companies House Beta) should remain largely unaffected.