Helping SMEs get paid? – A brief look at the new rules on reporting payment practices

22 November, 2017
by: Cripps Pemberton Greenish


Section 3 of the Small Business, Enterprise and Employment Act 2015 came into force on 26 May 2015 in a bid to stop smaller businesses experiencing administrative and financial burdens as a result of late payments. 


The new rules require large companies and LLPs (those that are “qualifying” – see below) to publish information online about their payment practices for financial years beginning on or after 6 April 2017. 



Businesses (private and public) will need to report if, on their last two balance sheet dates, they exceed two or more of the following size criteria:

  1. £36 million annual turnover;
  2. £18 million balance sheet total; or
  3. Have 250 or more employees.

A parent company might alternatively be caught by the obligation to report on its own payment practices (not that of its subsidiaries) if the Group meets two or more of the following thresholds in its last two balance sheets:

  1. An aggregate turnover of £43.2 million gross (or £36 million net);
  2. An aggregate balance sheet turnover of £21.6 million gross (or £21.6 million net) ; or
  3. An aggregate number employees of 250 or more. .

No business is required to report in its first financial year.



Businesses that meet the criteria must publish the following information every (applicable) six month period in relation to “qualifying contracts” (see below):

  • the business’ standard payment terms;
  • statistics on the average number of days taken to make payments, the percentage of payments paid late; and
  • yes/no statements relating to whether suppliers are offering e-invoicing, whether the business is a member of a payment code etc.

A qualifying contract is one that is:

  1. between two or more businesses;
  2. sufficiently linked to the UK;
  3. for goods, services or intangible property (including IP); and
  4. not for financial services.

Businesses that need to report can access the web service through which to publish the required information at the following link:



It is a criminal offence by the business and every director or designated member if the business fails to publish a report within the specified filing period of 30 days, or publishes a misleading, false or deceptive report.  Such offences are punishable on summary conviction by a fine.

For further information, guidance and to check if your business needs to publish a report please use the following link:



  • Does the business have the necessary reporting tools to capture information correctly and do any internal procedures need to be changed?
  • Who will be responsible for performing these calculations and do internal finance teams need to be given supplementary training?
  • Are there any reputational or commercial risks involved with reporting on such data? If so, communicate with your suppliers and customers who may well be in the same position.
  • Who in the Company will take final responsibility for the review and sign-off of the data?
  • Is external professional advice necessary? It may be that this is only required initially but businesses need to be aware of the consequences of incorrect reporting.