The CLC has released a statement on Reporting on Payment Practices and Performance (Amendment) Regulations 2024
On Wednesday 10 January the Department for Business and Trade (DBT) laid the Reporting on Payment Practices and Performance (Amendment) Regulations 2024.
These Regulations amend existing regulations, which impose a requirement on large companies and limited liability partnerships (LLPs) to publish certain information twice per financial year about their practices, policies and performance in relation to paying suppliers. These Regulations extend the Principal Regulations and the LLP Regulations beyond their current sunset date of 6 April 2024 to 6 April 2031 and require additional information to be reported by qualifying companies and LLPs. This includes requirements for qualifying companies to publish information on the value of payments made within a qualifying period and information on payments that were not paid under qualifying contracts. The Regulations can be found here.
The Government response to the public consultation on the amendments to the Payment Practices and Performances Regulations 2017 was published alongside the Autumn Statement 2023, and confirmed the introduction of a requirement for qualifying businesses that are parties to construction contracts to report on their retention payment policy and key statistics in relation to retentions.
Legislation for the new retention reporting requirements is expected to be laid before Parliament in 2024. It is anticipated that qualifying business will commence data collation and include in their payment practices and performance reports during 2025.
FIS CEO Iain McIlwee added:
“It is great to see the changes that were announced in the Autumn are being carried into law, but a bit disappointing that we have to wait until 2025 before we start to see the benefit. This is an area where FIS has long been calling for reform and has repeatedly highlighted the limitations with current reporting requirements that mask some serious underlying problems. The new requirements will provide a more realistic measure of late payment of construction invoices and highlight problems related to retention and disputed invoices.This is a positive step, but better measurement is not in itself change. As we head to the next General Election we will continue to lobby for reform of payment certification and retentions in construction and I am hopeful that the data that will start to come through will support our calls for change. New Zealand recently legislated for retentions to be held in trust and the EU are bringing forward far tougher late payment regulations. In the UK we are way behind on this and the supply chain is, as a consequence, getting even harder hit by the current levels of insolvency.”