Payment Practices & Performance Regulations 2017
09 February 2018
It is now a legal requirement to report on supplier payment practices and policies for qualifying contracts.
The UK Government has recognised that thousands of businesses experience severe administrative and financial burdens because they are not paid on time. To address this, on 6 April 2017, regulations were introduced to ensure qualifying UK companies and Limited Liability Partnerships (LLP) report on their practices, policies and performance relating to the payment of their suppliers.
The requirements require detailed reporting. Failure to comply holds strict consequences: Every director of the company, or equivalent in an LLP, is at risk of committing a criminal offence. If convicted, companies could also face large financial penalty. With other ancillary risks to consider such as damage to reputation and supplier relations, it is important that businesses are properly prepared.