The passing of the Small Business Enterprise and Employment Act in the last days of the coalition’s government has imposed on large quoted companies, basically quoted businesses with more than 250 employees, a new duty to report on payment practices and policies.
The measure is seen as vital to help reduce the £41.5bn overdue payments owing to SMEs by large businesses. At the same time as introducing this new requirement, the government strengthened the Prompt Payment Code, with the objective of making Code signatories lead by example in paying their suppliers promptly and fairly, with 30 day terms the norm and 60 days the maximum.
Every six months large business will have to publish the following information:
The companies under the duty will need to provide the data in open data format to a single central digital location. The government will work with stakeholders to design and implement a system of reporting.
The intention is that the first reports will be available from April 2016.
The new government will have to put secondary legislation before Parliament. So the legislation will need the agreement of Ministers before the new measures can be finalised. New IT systems will have to be developed as well as guidance on details of the specific requirements. Please see the report below to see the indicative format of what the new report will look like.
The outgoing Minister of State at BIS and the Chief Executive of the Chartered Institute of Credit Management (who administer the Prompt Payment Code) wrote to Code signatories informing them of the changes to the code. The letter below spells out the new strengthened measures that signatories are required to meet.