Changes from January 2025 Reporting on Payment Practices
Under the Reporting on Payment Practices and Performance (Amendment) Regulations 2024, new reporting requirements have been introduced for companies in scope of the reporting requirement. These new requirements will apply in relation to each financial year of a company beginning on or after 1 January 2025.
These new requirements relate to:
- the sum total of payments made during the reporting period
- the percentage of payments that were paid during the reporting period which were not paid within agreed terms because of a dispute
The Government has stated their intent to further crack down on payment concerns by extending the requirement to report. In 2025 further secondary regulation is planned to bring in additional requirements to report on value of invoices outstanding and, for construction firms, their practices, policies and performance with respect to retention clauses in any qualifying construction contracts with suppliers.
Changes to company size thresholds
The Government has also published The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations, which amend the criteria for determining if a company is classified as a micro‐entity, small, medium or large business for reporting and audit requirements under the Companies Act.
In an effort to reduce reporting burdens on companies, from 6 April 2025, the turnover and balance sheet thresholds for micro‐entities, small and medium businesses will increase by approximately 50%, and companies that move down a size category will be entitled to the accompanying reduction in reporting and audit requirements. The regulations also remove the requirement for companies of all sizes to include specific information on the employment of disabled persons within their directors’ report.