Reporting on Retentions - Update

We have today learnt that after being withdrawn as a result of the General Election, the draft legislation to amend the Reporting on Payment Practices and Performance Regulations to introduce new metrics on retentions has now been re?laid by the Department for Business and Trade (DBT).

Large companies will be required to publish the following information as part of their payment reports every six months:

• A series of statements confirming whether retention clauses are used and if so whether there are any standard terms
• A description of the process for release of retention
• A sum showing the overall value of retentions held by the company from its suppliers as a percentage of that held by its clients
• A sum showing the total retention held from the company’s suppliers as a percentage of all money paid to suppliers.

These amendments to the Regulations apply to each financial year of a company beginning on or after 1 April 2025, and DBT has confirmed that for companies with a financial year beginning on 1 January, their first reports containing the new metrics will be for the period 1 ? 30 June 2026 and need to be submitted by 30 July 2026. New metrics on the value of invoices paid and disputed invoices will come into force from 1 January 2025.

Richard Catt, CFA CEO, commented on this announcement: "We welcome the proposed regulatory improvements, having long advocated for stronger protections for our members. We hope the new metrics will curb unnecessary retention by larger companies and lead to better payment practices for specialist contractors once enacted."