Further update to DBT Guidance on supplier payment practices
The Department for Business and Trade has updated its guidance on reporting on payment practices and performance.
Background
Since 2017 large companies and LLPs have been required to report publicly twice a year on a government web service about their practices, policies and performance in relation to paying suppliers. Companies and LLPs are in scope of the requirement for a financial year if, on their last two balance sheet dates, they exceeded two or all three of the thresholds for qualifying as a medium-sized company under the Companies Act 2006 (Section 465(3)). The DBT has published guidance to help in-scope entities meet the requirements.
In September 2024, the DBT updated the guidance to reflect requirements to report on the total value of late payments, the percentage of payments involving a dispute, and where a finance provider was involved. These requirements were introduced by the Reporting on Payment Practices and Performance (Amendment) Regulations 2024 and apply to financial years commencing on or after 1 January 2025.
What's new?
The DBT has now made further amendments to the guidance to reflect:
- A new requirement on companies and LLPs to report on retention clauses in qualifying construction contracts for financial years commencing on or after 1 April 2025. These were introduced by the Reporting on Payment Practices and Performance (Amendment) Regulations 2025.
- Changes to the thresholds for defining medium-sized companies introduced by the Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 with effect for financial years commencing on or after 6 April 2025. These increase by 50% the annual turnover and balance sheet thresholds for companies to qualify as or medium-sized, with corresponding changes made for LLPs, and may therefore affect the entities in scope of the payment practices reporting regime.
The updated DBT guidance on payment practices reporting can be found here.
