End to poor payment practice?
Under new rules large companies that do not comply with the payment practices reporting duty (section 3, Small Business, Enterprise and Employment Act 2015) may be prosecuted and fined in an effort to increase accountability and transparency over late payments.
Announced on 19 June 2019, the rules will also require audit committees to report company payment practices in their annual accounts and the board will be held accountable for their payment practices to small businesses.
The Small Business Commissioner will take responsibility for administering the Prompt Payment Code (PPC) under the new regime and will receive additional powers to hold large companies accountable if they fail to make payments on time. With this new remit the commissioner may also compel companies to provide information and disclose their payment terms and practices or impose financial penalties and binding payment plans in cases where it finds companies’ payment practices biased.
For further information on the Prompt Payment Code, please contact Michaela Johns on 023 8046 1256.