The Government has published a written statement confirming its approach to implementation of the provision in the Small Business, Enterprise and Employment Act 2015 requiring large companies to publish their payment practices and policies. The statement appears to confirm that the obligation will apply to those companies and LLPs which meet the Companies Act 2006 threshold for “large”. The following narrative and metrics will be required to be covered in the report, to be published twice a year (an indicative format of which is also published):
- standard payment terms, including any changes to these in the last reporting period;
- average time taken to pay;
- proportion of invoices paid beyond agreed terms;
- proportion of invoices paid in 30 days or less; paid between 31 to 60 days; and paid beyond 60 days;
- amount of late payment interest owed and paid;
- whether financial incentives were required to join or remain on supplier lists;
- dispute resolution processes;
- the availability of: e-invoicing; supply chain finance; preferred supplier lists; and
- membership of a Payment Code.
The government intends to lay secondary regulations early in the next Parliament, with the requirement coming into force in April 2016.