BIS consults on changes to prompt payment code

The Department for Business, Innovation & Skills (BIS) has issued a consultation on proposed changes to the Prompt Payment Code (PPC) for comment by 9 January 2015

The consultation, which is only open for a month, is presented in the form of a questionnaire and seeks views on amending the code; monitoring and enforcement of the code; improving information on the code’s website; and funding the code for the future.

Proposed amendments to the PPC include the ability to set maximum payment terms, with a possible benchmark of 60 days.

Currently, only large companies, LLPs and quoted companies have a duty to report on their payment performance and practices. The survey seeks views on whether signatories outside the scope of the Government’s reporting requirement should provide basic information on their payment terms on a comply or explain basis, and if so, the frequency of such reports.

To ensure that references nominated by the supplier are not biased, it is proposed that suppliers provide a larger sample of references for PPC administrators to select from at random. The consultation also sets out a new enforcement process following challenges or complaints to the PPC about the payment performance of a signatory, and proposes to establish a Code Enforcement Board to oversee this process.

In addition, the consultation proposes to strengthen the PPC website by adding further details on signatories; information about the law on late payment; guidance about good credit management and payment terms; best practice case studies; and a grading system of suppliers.

Finally, the consultation will also consider reaction to the intorduction of a membership fee to help fund the code.

BIS runs the PPC jointly with the Institute of Credit Management (ICM).

The consultation is only available as an online survey  and the questionnaire is available here https://www.surveymonkey.com/s/PromptPaymentCode

 

 

Diane Tan |Content manager - current awareness, CCH

Diane Tan is content manager, current awareness at CCH, Wolters Kluwer UK www.cch.co.uk...

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