Transparency on payment performance data

[edit] Background

From 1 January 2025, under the Reporting on Payment Practices and Performance (Amendment) Regulations 2024, new reporting requirements have been introduced for companies in scope of the reporting requirement. These new requirements will apply in relation to each financial year of a company beginning on or after 1 January 2025. The new requirements relate to: the sum total of payments made during the reporting period and the percentage of payments that were paid during the reporting period which were not paid within agreed terms because of a dispute

From March 2025 also under the Reporting on Payment Practices and Performance (Amendment) Regulations but 2025 revision, new reporting requirements were introduced for companies in scope of the reporting requirement which use qualifying construction contracts. These new requirements apply in relation to each financial year of a company beginning on or after 1 April 2025. The requirements relate to retention practices, policies and performance where retention clauses are included in a qualifying construction contract. These include: A statement on whether the payment practices and policies of the business include or do not include retention clauses and where a business makes a statement that retention clauses are included in their construction contracts, further information must be submitted

From 6 April 2025, under The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024, the thresholds defining a medium-sized company are changing. This change affects the thresholds for reporting payment practices, since this definition is used to determine which businesses are in scope of the regulations. The new thresholds for reporting payment practices are outlined below and businesses that meet 2 or all 3 of these criteria will be in scope to report their payment practices.:

• £54 million annual turnover (up from £36 million)
• £27 million balance sheet total (up from £18 million)
• 250 employees (unchanged)

The Government has also laid draft 2025 ammeded legislation, "The Companies (Directors’ Report) (Payment Reporting) Regulations 2025" to require companies to include their payment results in their Directors’ reports from 1 January 2026 and has also published a public consultion on further measures to improve payment practices: "Late payments consultation: tackling poor payment practices", published 30 July 2025, as part of its Small Business Plan.

[edit] Government engagement with industry

The Electrical Contractors’ Association has campaigned for many years on behalf on SMEs for fair payment changes and highlighted back in that Fair Payment Code needs to work together with network of fair and late payment initiatives to add value also carrying out an industry survey: ECA survey seeks to uncover the human cost of payment abuse in July 2025.

Following the introduction, in January 2025, of new reporting requirements ECA has continued worked with Government to design new initiatives. Large companies are now required to report on both the value and number of invoices paid within 0 to 30 days, 31 to 60 days and more than 60 days to provide even greater transparency for the supply chain around payment performance. Results for all large firms is likely to be available in May 2026 when the remaining large firms have submitted their first reports.

The draft legislation outlined above to requires companies to include their payment results in their Directors’ reports from 1 January 2026 and follows ECA’s ideas and expertise after an engagement process with the government. Furthermore the draft legislation and consultion on further measures to improve payment practices as part of its Small Business Plan represents further transparency and another tightening of the screw on late payment resulting from ECA’s leadership with Government.

[edit] Forward by the Secretary of State

"This government is committed to tackling the scourge of late payments, which costs the UK economy almost £11 billion per year and closes down 38 UK businesses every day. Over 1.5 million businesses are affected by late payments. This represents a significant drag on UK growth and productivity. A healthy cash flow is critical for the survival and growth of the UK’s small businesses. Paying hard-working employees, settling bills with other businesses, and investing in new capital, skills and ideas for the future – all of this relies on timely and fair payment."

"Since being elected last year, this government has already taken rapid action: We are legislating to require large companies to include their payment performance in annual reports. This will give greater board-level oversight of payment practices and increase the transparency of large companies’ their payment performance. We have launched a new Fair Payment Code, delivered by the Small Business Commissioner. This is showcasing those companies who are setting an example by paying their suppliers quickly and fairly. We have appointed Emma Jones CBE as the new Small Business Commissioner. Emma brings a wealth of entrepreneurial experience to the role and will be a key player in tackling late payments."

"We know there is more to do. That’s why we are proposing a package of new measures that amounts to the most significant legislation to tackle late payments in over 25 years. We are going further than previous governments and our international counterparts – giving us the strongest legal framework on late payments in the G7. We are meeting our manifesto commitment to take action on late payments to ensure small businesses and the self-employed are paid on time. "

"These measures support the government’s ambition to make the UK the best place in the world to start, run and grow a business – a place where businesses are paid on time for the goods and services they deliver, a place where money flows quickly through supply chains, a place where small companies and the self-employed spend their time and resources running their business effectively instead of chasing unpaid invoices. "

"I would like to thank all the stakeholders that have provided their expertise and insights to help develop these proposals. This includes the Federation of Small Businesses, who have been a tireless advocate on this issue for many years. I look forward to hearing a wide range of stakeholders’ views on this package of policy measures to address late payment, supporting the growth of businesses throughout the UK."

The section Government engagement with industry is based on the ECA news item entitled "ECA achieves further transparency on payment performance data improving business resilience for Members" dated 21 August 2025, with references and texts in the first and last sections followed up by the editor.

--ECA

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