Posted by Natercia Hughes on January 30, 2018
New rules requiring the UK’s large businesses, including Academy Trusts, to publish half-yearly reports on their payment practices, policies and performance, came into force for financial years beginning on or after 6 April 2017.
The reporting requirement applies to large companies and large limited liability partnerships (regardless of whether they are private, public or quoted) which exceed certain size criteria, as outlined below.
The duty applies to large companies and large LLPs that meet two or more of the following criteria on both of their last two balance sheet dates:
This criteria will catch larger Academy Trusts (ATs).
Duty to report on payment practices and performance guidance issued by the Department for Business, Energy & Industrial Strategy provides a useful flowchart to assist in deciding whether a company is required to report, as well as on the required information.
The information must be published through an online service provided by the government. Reporting businesses can access the web service through the following link: https://www.gov.uk/government/publications/business-payment-practices-and-performance-reporting-requirements
The information required must be published within 30 days of the end of the reporting period. ATs that are caught under the criteria, would be required to publish their first report for the 6 months to 28 February 2018, by 30 March 2018.
The reporting business will need to report on qualifying contracts. A qualifying contract is a contract which satisfies all of the following:
ATs that will be subject to the new reporting duty should review their payment systems and processes now, and ensure that they have appropriate systems in place to gather the data they will need to submit on their first report.
ATs should also take this opportunity to scrutinise their payment policies and practices in the light of the increased transparency which will come about as a result of the new disclosure requirements. ATs that already operate good payment practices may look to utilise their first report to publicise their positive record.
It is a criminal offence by the business, and every director of the company, or designated member of an LLP, if the business fails to publish a report, containing the necessary information, within the specified filing period of 30 days.
If you would like to discuss this issue, please contact your usual Bishop Fleming adviser or a member of the Academies team.