Large UK businesses, are you prepared for the expanded Reporting on Payment Practices and Performance Regulations? As of April 1, 2025, financial years are subject to new reporting obligations designed to increase transparency and address late payments in the UK.
✅ What has Changed?
Building on the existing framework of 2017, the regulations now require large companies to report on:
· The value of invoices paid outside the agreed payment period
· The total sum of payments not made within the payment period
· The percentage of disputed invoices causing payment delays (these still count as late payments)
· Reporting on retentions specifically if you’re in the construction industry.
✅ Who is impacted?
These regulations apply to large companies and Limited Liability Partnerships (LLPs) exceeding two of the following criteria on their last two balance sheet dates:
· Annual turnover over £36 million.
· Total balance sheet over £18 million.
· More than 250 employees.
Subsidiaries of overseas companies may also be required to comply if they meet these criteria.
While these rules directly apply to large businesses (those exceeding specific turnover, balance sheet, and employee thresholds), they have a ripple effect on SMEs. Increased transparency on payment practices aims to tackle late payments, a significant challenge for smaller businesses’ cash flow.
✅Why accurate reporting matters:
Transparency in payment practices is under increased scrutiny. Accurate and timely reporting is critical, as the reported information is published on a central government website. A company director (or designated person for partnerships) must approve the report before publication.
✅ Non-compliance carries risk:
Failure to report, or publishing false or misleading information, is a criminal offense, potentially leading to fines for both the company and its directors.
✅ How We Can Help:
Navigating these evolving regulations can be complex. Our firm specialises in payments law and can assist your business in:
· Understanding your reporting obligations.
· Ensuring accurate data collection and reporting.
· Mitigating the risk of non-compliance penalties.
· Reviewing payment practices guidance to ensure it is up to date.
➡️ Contact us at lawfirm@dalir.co.uk today for a consultation to ensure your business is compliant! 📩
