(1) Subject to paragraphs 29 and 30, the directors’ report for a financial year must contain the information specified by sub-paragraphs (2), (3) and (4).
(2) A statement describing—
(a) the payment period specified in the company’s standard payment terms in its qualifying contracts between it and its suppliers, expressed in days;
(b) where the company varied the standard payment terms in its qualifying contracts between it and its suppliers in the financial year—
(i) details of the variation; and
(ii) details of any notification or consultation conducted by the company with its suppliers before making the variation.
(3) In relation to the payments made under qualifying contracts within the financial year, a statement of—
(a) the average number of days taken to make such payments, where day 1 is the first day after the relevant day;
(b) the percentage of those payments which were made, where day 1 is the first day after the relevant day—
(i) within the period beginning with day 1 and ending with day 30;
(ii) within the period beginning with day 31 and ending with day 60;
(iii) on or after day 61;
(c) the sum total of those payments which were made, where day 1 is the first day after the relevant day—
(i) within the period beginning with day 1 and ending with day 30;
(ii) within the period beginning with day 31 and ending with day 60;
(iii) on or after day 61.
(4) In relation to the payments under qualifying contracts that fall due within the financial year—
(a) a statement of the percentage of these payments which were not made within the payment period; and
(b) a statement of the sum total of these payments which were not made within the payment period.
The directors’ report for a company is not required to contain the information specified by paragraph 28 where the report is for—
(a) the company’s first financial year, or
(b) a subsequent financial year in relation to which the company qualifies as medium-sized.
(1) Paragraph 28 does not apply if—
(a) the company is a subsidiary undertaking at the end of the financial year;
(b) the company is included in the group directors’ report of a parent undertaking; and
(c) the group directors’ report is prepared for a financial year of the parent undertaking that ends at the same time as, or before the end of, the company’s financial year.
(2) If the directors’ report is a group directors’ report, paragraph 28 has effect as if references to the company were references to the company and its subsidiary undertakings included in the consolidation.
(3) The company may exclude from the group directors’ report any information which relates to a subsidiary undertaking, if that undertaking would not be required to include the information in its directors’ report by virtue of paragraph 29.
For the purposes of this Part—
(a) a payment falls due on the last day of the payment period;
(b) subject to sub-paragraph (d), a payment is made—
(i) when it is received by the supplier, unless sub-paragraph (c) applies, or
(ii) where sub-paragraph (c) applies, when it is received by the finance provider from the company;
(c) this sub-paragraph applies if there is an arrangement under which—
(i) the supplier receives part payment of an invoiced sum from a finance provider before the end of the payment period; and
(ii) the company pays the invoiced sum to the finance provider;
(d) where there is any delay in the payment or of any part of the payment being received for which the company is not responsible, the payment is deemed to have been made when it would have been received without that delay.
(1) For the purposes of this Part, a qualifying contract is a contract which satisfies sub-paragraphs (2) and (3).
(2) The first condition is that the relevant contract is not a contract for financial services, as defined in section 2 of the Small Business, Enterprise and Employment Act 2015.
(3) The second condition is that the relevant contract is—
(a) governed by the law of part of the United Kingdom otherwise than by the choice of the parties;
(b) governed by the law of part of the United Kingdom by choice of the parties, and—
(i) has a significant connection with that part of the United Kingdom; or
(ii) without that choice, its applicable law would still be the law of a part of the United Kingdom; or
(c) governed by a foreign law by choice of the parties and—
(i) without that choice, its applicable law would be the law of a part of the United Kingdom; and
(ii) has no significant connection with any other country outside the United Kingdom.
(4) In this paragraph “ foreign law ” means the law of a country outside the United Kingdom.
For the purposes of this Part of this Schedule—
“ average ” means the arithmetic mean;
“ finance provider ” means a body corporate that—
lends money or provides credit in the course of a business,
arranges or facilitates the provision of debt or equity finance in the course of a business, or
provides, arranges or facilitates invoice discounting or factoring in the course of a business;
“ invoiced sum ” means a sum payable under an invoice;
“ qualifying contract ” has the meaning given in paragraph 32
“ payment period ” means the period in which a company is contractually required to pay a sum;
“ relevant day ” means the day on which a company receives an invoice or otherwise has notice of an amount for payment;
“ standard payment terms ” means, in relation to a qualifying contract—
the standard terms relating to payment that the company uses, or
where the company does not use standard terms, the company’s most frequently used payment terms.
Contains public sector information licensed under the Open Government Licence v3.0 (legislation.gov.uk).
