What is the PPC

The Prompt Payment Code Background

The Prompt Payment Code (PPC) is a voluntary code of practice for businesses, administered by the Office of the Small Business Commissioner (SBC) on behalf of BEIS. It was established in December 2008 and sets standards for payment practices between organisations of any size and their suppliers.

The Ethos of the Code 

Signatories have always undertaken to:

1) pay suppliers on time, within agreed terms;
2) give clear guidance to suppliers on terms, dispute resolution and prompt notification of late payment;
3) support good practice throughout their supply chain by encouraging adoption of the Code.

Code Reforms

In changes announced on 19 January 2021, the Code has been strengthened by:

  • confirming the requirement to pay 95% invoices within 60 days
  • introducing an added requirement that 95% invoices from small businesses (with less than 50 employees) must be paid within 30 days (effective from 1 July 2021 for existing signatories)
  • requiring small and medium sized signatories to report annually on their payment performance, on a comply of explain basis
  • promoting and strengthening the Code website
  • requiring signatories to recognise the right of suppliers to charge late payment interest and charges if an invoice is paid late without justification
  • stating that applications to join the Code must be signed by the Chief Executive, Finance Director or, in the case of smaller businesses, the company owner
  • suppliers should be provided with a contact point for payment queries

Signing up to the Code: Click here to sign up.

Suspensions and Removals

Large businesses that have submitted data to Government’s Payment Practices Portal revealing payment of less than 90% of invoices within 60 days will be suspended from the Code, until they achieve at least that percentage. If a suspended signatory fails to engage with the PPC administrators, or compliance is not achieved within a reasonable timescale, the signatory will be permanently removed from the Code.

When a signatory’s payment practice is challenged, the PPC administrators will investigate and achieve a positive outcome through mediation with both parties wherever possible. If this fails to achieve a satisfactory outcome and the Compliance Board determines that the payment practice is non-compliant, the signatory may be removed from the Code.