Payment practices reporting – updated guidance and further measures to tackle late payments

The Department for Business and Trade has updated its guidance on the requirement for large UK companies and LLPs to report on their payment practices, policies and performance.

Entities within the scope of the payment practices reporting requirements must produce a report every six months on their payment practices and submit the report to a government-hosted website for publication. The guidance contains detail on who needs to report, what needs to be reported and where the information needs to be reported, as well as a set of frequently asked questions. The example reporting scenarios in the guidance have been updated to provide further clarity and assistance.

Further to the measures announced in September 2024 (see our blog post here), the Secretary for Business and Trade has confirmed in a written statement that:

• secondary legislation will be laid before July 2025 to require large companies to include information about their payment performance in their annual reports; and
• a consultation will be published on additional legislative measures to address late payments and long payment.

The government has also recently published draft Reporting on Payment Practices and Performance (Amendment) (No 2) Regulations 2024 to require qualifying entities to include information about payment practices and policies in relation to retention clauses in any qualifying construction contracts that they have with suppliers. The Regulations, which follow on from a statutory review of the reporting requirements (see our blog post here), will come into force on 1 March 2025. Other changes consulted on were included in The Reporting on Payment Practices and Performance (Amendment) Regulations 2024 which came into force in April 2024 (see our blog post here).