It has been almost a year since the Reporting on Payment Practices and Performance Regulations SI 2017/395 ("The Regulations") came into force. The Regulations were the brain-child of the Department for Business, Energy and Industrial Strategy and the Chartered Institute of Credit Management in order to develop a "more responsible payment culture" in the business community. To achieve this, there is now a statutory duty on large businesses (companies and LLPs) to produce and publish a public report on their payment practices. As "gentle reminder" letters make their way into the post-boxes of businesses nationwide, now is the perfect time to make their acquaintance.

The first deadline for businesses to report on their payment practices was in November 2017. However, according to recent reports, far fewer businesses have reported than are known to meet the criteria to do so. In this bulletin, we have summarised the reporting requirements so you can check whether your business needs to take action. It is important to comply with the Regulations as failure to do so could lead to civil and criminal sanctions.

Despite this, there have been no prosecutions to date (it is a criminal offence to fail to report) which suggests that the Department for Business, Energy and Industrial Strategy are showing a degree of tolerance to allow businesses to get used to the new Regulations. However, this certainly doesn't mean that you should become complacent. If, once you've studied this bulletin, you find that you are indeed overdue then we would suggest that you collate the information as soon as possible. If, however, you find that your first deadline is approaching, then we would still suggest that you begin to prepare now so that you are ready in time. Whilst the government may be making allowances for the moment, they may not be so understanding come deadline two.

Do they apply to you?

The Regulations apply to any business (company or LLP) which has exceeded at least two of the below thresholds in the previous two financial years:

  • £36 million annual turnover (the amount derived from the provision of goods and services after deduction of trade discounts, VAT and other taxes);
  • £18 million balance sheet turnover (the aggregate of the amounts shown as assets in the business' balance sheet);
  • 250 employees.

If you're a new business, then you do not have to report during your first financial year, but you will be required to in your second if you meet the criteria. If you have met the threshold in only the second of the two financial years prior to the Regulations coming into force, then you will not be required to report. If you go on to meet the threshold again the following financial year (two in succession), then you will be required to produce a report. If you're a member of a group, then be aware that each member that exceeds the thresholds must report and a consolidated report for the entire group will not be accepted.

What information do you need to include?

The report is intended to be an overview of the terms of your business' standard "qualifying contracts". These are any contracts which are:

  • Between two or more businesses;
  • Are "sufficiently linked" to the UK;
  • Are for goods, services or intangible property; and
  • Are not for financial services.

If you're unsure if your contracts qualify, please contact us to be referred to a specialist who can advise you. If your business meets the threshold but doesn't have any "qualifying contracts", you are still required to prepare a report but there will be fewer questions to answer.

The following information must be included in the report:

  • A description of the business' standard payment terms, including the standard contractual length of time for payment of invoices and also the maximum contractual payment period;
  • The business' process for resolving disputes related to payment;
  • The average number of days taken to make payments during the reporting period;
  • Statistics in relation to the number of invoices paid:
    • Within 30 days or less;
    • Between 31 and 60 days;
    • In 61 days or longer; and
    • Outside of the agreed terms.
  • Yes/No statements confirming whether:
    • Electronic invoicing is available;
    • Supply chain finance is available;
    • The business' practices and policies allow for reducing payments to suppliers as a charge for them remaining on your preferred supplier list and whether any deductions have been made during the reporting period;
    • The business is signed up to a code of conduct or standard relating to payment practices? If yes, the name of the code must be supplied.

Although possibly not as onerous as you may expect, this information will take time to collate and review so do make sure you leave adequate time ahead of your reporting deadline to do so.

When is the deadline?

This depends on your business' financial year, as the report must be submitted within 30 days of the end of the relevant reporting period. If your financial year is 12 months, there are two relevant reporting periods per year. The first is the first six months of your financial year (starting on the first day) and the second is the final six months (beginning the day after the first period ends). 

The below table should help you determine the relevant deadline for you:

Financial year beginning

First reporting period

First report to be published by no later than

1 January 2017

1 January 2018 to 30 June 2018

30 July 2018

1 April 2017

1 April 2018 to 30 September 2018

30 October 2018

5 April 2017

5 April 2018 to 4 October 2018

3 November 2018

6 April 2017

6 April 2017 to 5 October 2017

4 November 2017

After 6 April 2017

First six months of 2017-2018's financial year

Within 30 days of the last day of the first reporting period

Where to submit the report?

Reports are to be submitted online at: The report will then be available for public review.

What happens if you're late or submit a false report?

Failure to submit a report, submitting one which does not contain the required information or submitting one which is deemed to be misleading, false or deceptive is a criminal offence and both the business itself and every director (or designated member) could face a financial penalty.

Remember that a director (or designated member for LLPs) must review your report before it is submitted and should do so carefully, not only to avoid penalties, but also due to the public nature of the report which means that your own suppliers (who are party to your qualifying contracts) are able to review them and can report any misleading information. 

What should you do next?

If you are unsure whether your business is required to report under the criteria or whether you have "qualifying contracts" get in touch to find out how we can help. If you are close to the reporting thresholds, ensure you assess this on an ongoing basis.  

If the Regulations apply to you, then make sure that you consider your next steps to ensure that you're able to comply with the deadline. 

Here are the steps we would suggest as a general guide:

  1. Due to the possible sensitive nature of the report and the level of detail required, make sure that the payment practices of the business and the report itself are on the agenda of the Board;
  2. Nominate someone to prepare the report;
  3. Gather the necessary information about the payment practices during the relevant period, ensuring that you note any changes that have occurred;
  4. Make sure that you leave enough time to prepare an accurate and considered report to avoid the risk of sanctions;
  5. Ensure that a director or designated member approves the report prior to submission.

If you require any advice on reporting or for further information, please contact us and we will ensure we put you in contact with a specialist from Ward Hadaway immediately. Call us on 0333 006 2929 or email


This article has been drafted on esphr’s behalf by Ward Hadaway Law Firm. Ward Hadaway Law Firm are one of esphr’s strategic legal advisory partners and provide certain services to our customers through a range of different Legal and HR support services offered by ourselves to the Corporate market. The content of this article does not constitute legal advice and it should not be relied upon. Specific legal advice may be required to address your specific circumstance.