Payment practices – further extension of payment practices reporting regulations

The Reporting on Payment Practices and Performance (Amendment) Regulations 2025 (the Amending Regulations) have been made and come into force on 1 March 2025. They extend and strengthen the regime for reporting on payment practices in relation to "qualifying construction contracts".

Under the payment practices reporting regime, which was introduced in 2017 by the Reporting on Payment Practices and Performance Regulations 2017 and the Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017, large UK companies and LLPs have to produce a report on their invoice payment practices every six months and submit the report to a government-hosted website for publication. 

Under the Amending Regulations, qualifying entities must include information in their report about payment practices and policies in relation to retention clauses in any qualifying construction contracts that they have with suppliers. "Construction contract" is very broadly defined – see our snapshot on the payment practices reporting regime here for more information on the definition and the regime more generally.

The new requirements apply in relation to financial years beginning on or after 1 April 2025.

The Amending Regulations follow on from the government’s January 2023 consultation on the regime and its response to that consultation (see our blog post here). Other changes consulted on as part of the review of the regime 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).