UK Parliament has published a draft of the Companies (Directors’ Report) (Payment Reporting) Regulations 2025 (“Regulations”). It has also published a draft explanatory memorandum. The purpose of the draft Regulations is stated to be to make changes to reporting requirements to require large companies to report information about their payment practices and performance within directors’ reports.
For further information on company size thresholds please click to access the Institute webpage on UK company thresholds.
The draft Regulations when enacted will require the directors' report to include items such as the payment period specified in a company’s standard payment terms in its qualifying contracts between it and its suppliers. Where there are variations to standard payment terms, details of the variations and notifications/consultations with suppliers before making the variation should also be reported. Details should also be included about payments made including percentages and total sums not made within the company’s payment period.
See the draft Regulations for full details.
“Qualifying contracts” are defined in the draft Regulations, and the definition relates to exclusion of contracts for financial services and other terms dealing with the choice of law of the contract.
The draft Regulations are stated to come into force on 1 January 2026 and will have effect in respect of a company’s financial year beginning on or after 1st January 2026.
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