The Reporting on Payment Practices and Performance Regulations 2017

Companies to which the duty applies

5.—(1) These Regulations apply to a company in relation to every financial year in which it is a qualifying company.

(2) A company is not a qualifying company in—

(a) its first financial year;

(b) a financial year which began before 6th April 2017.

(3) A company other than a parent company is a qualifying company—

(a) in its second financial year if on its last balance sheet date before that financial year it exceeded two or all three of the general thresholds;

(b) in a subsequent financial year if on both of the relevant balance sheet dates it exceeded two or all three of the general thresholds.

(4) A parent company is a qualifying company—

(a) in its second financial year if on its last balance sheet date before that financial year—

(i) it exceeded two or all three of the general thresholds, and

(ii) the group headed by it exceeded two or all three of the group thresholds;

(b) in a subsequent financial year if on both of the relevant balance sheet dates—

(i) it exceeded two or all three of the general thresholds, and

(ii) the group headed by it exceeded two or all three of the group thresholds.

(5) In this regulation—

(a) “balance sheet date” means the date as at which the company’s balance sheet was made up;

(b) the “general thresholds” are the maximum figures for a company’s turnover, balance sheet total and number of employees set out in subsection (3) of section 465 of the 2006 Act (companies qualifying as medium-sized: general)(1), determined in accordance with subsections (4) to (6) of that section;

(c) “group” means a parent company and its subsidiary undertakings;

(d) the “group thresholds” are the maximum figures for a group’s turnover, balance sheet total and number of employees set out in subsection (4) of section 466 of the 2006 Act (companies qualifying as medium-sized: parent companies)(2), determined in accordance with subsections (5) to (7) of that section;

(e) “parent company” has the meaning given in section 1173 of the 2006 Act(3);

(f) the “relevant balance sheet dates” are—

(i) the company’s last balance sheet date before the relevant financial year, and

(ii) the balance sheet date preceding that;

(g) “subsidiary undertaking” has the meaning given in section 1162 of, and Schedule 7 to, the 2006 Act.

(6) Paragraph (7) applies if the 2006 Act is amended so that the general thresholds or group thresholds which apply to a financial year (“X”) differ from those which applied to either of the preceding two financial years.

(7) For the purpose of determining whether a company is a qualifying company in financial year X, the company is to be treated as if the general thresholds or group thresholds which apply to financial year X had also applied to the two preceding financial years.

(1)

Section 465(3) was amended by S.I. 2015/980.

(2)

Section 466(4) was amended by S.I. 2015/980.

(3)

There are amendments to section 1173 but none is relevant to these Regulations.