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On 6 April 2017 new rules will come into force that will require Limited Liability Partnerships (LLPs) and medium and large companies to publish reports on their payment practices.
The Limited Liability Partnerships (Reporting on Payment Practices and Performance) Regulations 2017 and The Reporting on Payment Practices and Performance Regulation 2017 will require these businesses to report specific information online every six months.
While the new rules come into effect this April, they will apply to financial years beginning on or after that date, meaning that many businesses will need to ensure their systems are changed so they can record and report the required payment information.
The Department for Business, Energy and Industrial Strategy (BEIS) has issued guidance, entitled Business payment practices and performance: reporting requirements, which lays out how and when businesses should report their practices.
According to this document the earliest reports will be required from businesses with periods beginning from 6 April and the first significant volume will be from those with a 30 June year end.
In particular, the new reporting requirements will be placed on companies that have been formed and registered under the Companies Act 2006 (or previous legislation) and LLPs registered under the Limited Liability Partnerships Act 2000, which exceed two or more of the following on their last two balance sheet dates:
Any business incorporated outside the UK, including companies registered under the Companies Act but not formed under the Companies Act, is not required to report.
Under the rules, businesses will only be required to report on qualifying contracts. In order to qualify, a contract must fall under all of the following criteria:
Once a qualified contract is identified the business must report:
They must also report whether:
Failure to meet the reporting requirements is a criminal offence and every director of the company or designated member of an LLP could be found liable.