NEW LEGISLATION Duty to report on payment practices and performance

You will now be aware of new legislation coming into effect in April this year that might directly affect your business. The new law has been introduced to protect the thousands of smaller businesses that suffer from late payments, which ultimately affects cashflow and potentially trading position.

In a report published by the Department for business energy & industrial strategy today (31st January 2017), businesses of a certain size are legally obliged to report on their payment practices. It will be a criminal offence against the business and each director, if there is a failure to publish a report that contains certain information.


The law affects all companies who have any two of the following:

  • £36m net turnover, or
  • £18m balance sheet total, or
  • 250 employees

There are more complex qualifying criteria depending on contracts that qualify, foreign ownership of business or parent companies.  All of this is explained in more detail in a table and flow chart available on the table below.

Annual Turnover£45m ✔£40m✔£30m£35m£40m✔
Balance Sheet Total£25m✔£17m£19m✔£17.5m£25m✔
Average no. of employees350✔200450✔250251✔
sheet date
before last
Annual Turnover£40m✔£40m✔£35m£35m£35m
Balance Sheet Total£20m✔£17m£20m✔£20m✔£17.5m
Average no. of employees350✔200450✔450✔249
Did the business exceed the thresholds
for a medium-sized company in both
financial years?
Yes, the company’s figures exceed at least two of the thresholds for a medium sized company in both yearsNo, figures were below two of the thresholds in both yearsYes, the company’s figures exceeded two of the thresholds for a medium-sized company in both yearsNo, figures were below at least two of the thresholds in the last financial yearNo, figures were below at least two of the thresholds on the balance sheet date before last



Companies that fall into the criteria for reporting will be required to publish information, that will be available to the public, about their payment terms to suppliers and subcontractors on particular contracts, such as:

– their standard and maximum payment periods
– how suppliers have been notified of any payment term changes
– how payment disputes are resolved
– statistics showing the average number of days taken to pay
– percentage of invoices paid between 1-30 days, 31-60 days and 61 days and over.
– The percentage of payments that were made within the contractually agreed period.


When you need to submit your first report will depend on your financial year.

Financial year beginningWhat is the first reporting periodWhen must the first report be published on the web service
1st January1st January 2018 to 30th June 2018On or before 30th July 2018
1st April1st April 2018 to 30th September 2018On or before 30th October 2018
5th April5th April 2018 to 4th October 2018On or before 3rd November 2018
6th April6th April to 5th October 2017On or before 4th November 2017
After 6th AprilFirst six months of the business’s 2017-18 financial yearWithin 30 days starting on the day after the end of the business’s first reporting period


One the data has been extracted, it will then need to be inputted into the web-based government portal within the required 30 days after the reporting period.

We know from our experience of dealing with construction companies implementing ERP software, that even this kind of basic financial information can be time consuming to compile, and a big pull on resources.

Thankfully as you don’t need to report until at least May, this gives you enough opportunity to be able to start looking at finance systems that will make this reporting far more efficient. Now could be an ideal time to look at a fully integrated ERP system, that is developed specifically for construction businesses.

Click here to download to original government PDF

Click here to arrange a demo of how Metaphorix can help

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Mark Egan

4PS Sales Manager
Mark has worked in construction sales for more than 10 years, advising main contractors, M&E and other sub-contractors through hundreds of site visits. During that time Mark developed a good understanding of contractor processes. This has led to a successful transition to selling the benefits of 4PS, the industry leading construction ERP software, which solves many of the problems that contractors encounter.