14 February 2018

New supplier payment regulations for large entities

New reporting requirements are coming into force for large companies and large LLPs

One of the key issues for smaller businesses is cash flow, and late payments from large customers can cause serious problems and have an adverse impact on their ability to trade. For financial years/periods starting on or after 6 April 2017, the Department for Business, Energy and Industrial Strategy (BEIS) are introducing new reporting requirements for large companies and large LLPs (regardless of whether they are private, public or quoted). These are new statutory reporting requirements for payment practices and performance and will be reported on a half yearly basis. The aim is to help boost transparency of payment practices to help small and medium sized businesses.

A large entity is one that exceeds at least two of the following criteria on their last two balance sheets dates:

  • £36m turnover*
  • £18m balance sheet total
  • 250 employees (average headcount)

*adjusted for length of period, if the period is not 12 months.

No company/LLP which is in its first financial period is required to report. Businesses incorporated outside of the UK, including overseas companies registered under the Companies Act 2006, but not formed under the Companies Act 2006, are not required to report.

Within the legislation there is specific rules for groups.  If the parent of a group is large in its own right then it will have to report on its own payment practices, following the company rules above.

However if the group is large, per the thresholds below, but the parent is not a large entity, the parent must still report on its own payment practices. So, if you have a large group and none of the individual entities are large, the parent would still need to report on its own payment practices. A large group is one that exceeds at least two of the following criteria on their last two balance sheets dates:

  • Aggregate turnover: £36m net (or £43.2m gross)
  • Aggregate balance sheet total: £18m net (or £21.6m gross)
  • Aggregate number of employees: 250 (average headcount)

Under the new requirements, businesses need to report on qualifying contracts. A qualifying contract is one which satisfies all of the following;

  • It is between two (or more) businesses;
  • It is sufficiently linked to the United Kingdom;
  • It is for goods, services or intangible property, including intellectual property;
  • It is not for financial services.

Reporting is to be split into three categories and is to be prepared on an individual company/LLP basis and not at group level:


  • Average number of days to make payments in the reporting period from receipt of invoice or other notice;
  • The percentage of payments which were made in 30 days or fewer, between 31 and 60 days and over 60 days; and
  • The percentage of payments which were not paid within agreed terms.


  • Standard terms and payment period;
  • Maximum payment period;
  • Any changes that have been made in the reporting period to the standard terms or payment period;
  • The methods used to notify and consult suppliers around such changes; and
  • The process for resolving disputes relating to payment.

Statements (by tick box):

  • Is e-invoicing offered?;
  • Is supply chain finance offered?;
  • Does the business deduct sums from payments as a charge for remaining on a supplier list?; and
  • Is the business a participant in any payment code?

This information will have to be reported on a web service provided by the government on the www.gov.uk website within 30 days of the end of the reporting period. A company director will have to approve the information submitted.

For further details please visit the Government website and their guidance on the reporting requirements.

Reporting periods

Financial year beginning What is the first reporting period? When must the first report be published on the web service?
1 January 1 January 2018 to 30 June 2018 On or before 30 July 2018
1 April 1 April 2018 to 30 September 2018 On or before 30 October 2018
5 April 5 April 2018 to 4 October 2018 On or before 3 November 2018
6 April 6 April to October 2017 On or before 4 November 2017
After 6 April First six months of the business’ 2017-18 financial year Within 30 days starting on the day after the end of the business’ first reporting period.
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