There are no plans to relax the requirements of the Prompt Payment Code as a result of COVID19. We understand that businesses are facing challenging times, so it is important that we all work together. It has been encouraging to see that a number of large businesses, including Morrisons, Vodafone and Tesco have stepped up to support their small business supply chain by reducing the time to pay. SMEs need cash more urgently than ever to help them survive and come through the impact of COVID19.
BEIS is responsible for the compliance timetables for Duty to Report submissions and, aware of the pressures that businesses are experiencing, will be keeping the requirements under review. If you have any queries concerning Duty to Report please e-mail: email@example.com
There are no associated costs or fees to sign up to the Code or remain a member of the Code.
Government has published guidance which can be read here.
The Code itself is an industry-led initiative. We, along with the Chartered Institute of Credit Management have brought together an Advisory Board made up of signatories to discuss how the Code can be strengthened. We are strengthening the Code by:
- introducing a 60-day maximum payment term, and enshrining a 30-day payment term as a norm for all signatories as standard practice;
- creating a Code Compliance board to enforce the Code, including its maximum payment term;
- requiring small and medium sized signatories to report annually on their payment performance, on a comply of explain basis, and for large signatories to report on their payment practice and performance in line with the new statutory reporting requirement;
- increasing the number of references needed to validate membership; and
- promoting and strengthening the Prompt Payment Code website.
The Advisory Board have endorsed these changes to the Code.
The Code Compliance Board considers and responds to complaints by Code signatories. The Board can sanction signatories; including if need be expelling them from the Code. The Government’s Duty to Report requirement has now come into force, this is actively monitored by the Code administrators who will be able to proactively challenge a signatory on their payment practices and policies if their reports suggest they are not complying with the Code. Paying over 60 days can be easily explained away. This isn’t strong enough. The 60-day payment term is a positive step in addressing the issue of late payment. The Code takes this one step further and sets a thirty-day term for companies to comply with standard practice.
The Compliance Board will consist of at least five core members. We expect three of the members will be drawn from trade representative bodies, who would judge cases as individuals, rather than representative of their respective organisations. The other two members will be corporate Code signatories which will include a public body. Click here for further information.
The Code Compliance Board will make enforcement decisions on behalf of the Code. The Board will issue a public statement if a signatory is removed from the Code, and a list of removed signatories will be available on the Code website.
The Code has set 30 days as a target which all signatories should work towards. The upper limit of the Code is that signatories will have to pay 95% of their invoices within 60 days or explain that non-payment was due to exceptional circumstances. If the Compliance Board finds that neither of these conditions were met, then the signatory is not compliant with the Code. The Advisory Board also considered that 30-day payment terms are best practice and will advocate this as a standard for all signatories to aspire to.
Large companies are required to report on their payment practices and performance in line with the new statutory reporting requirement. All published reports can be found here
Yes, suppliers can use the ‘Complaints’ section of the website to challenge the status of a signatory. The challenge will be investigated by the the Code administrators and contact made with the signatory who is encouraged to enter a dialogue with the supplier. If it might be helpful, the Code administrators are happy to speak to both parties and support their efforts. Where appropriate, the matter is referred to the Code Compliance Board which will determine what action might be required by the signatory, or whether its status as a signatory should be removed.
Yes, if it trades in the UK or with UK suppliers.
No. All the information you require is clearly shown on the website.
Please contact the administrators of the Prompt Payment Code who will give advice.