New UK Payment Reporting Rules: A CFO Checklist for 2026

UK companies must disclose payment practices in their Directors’ Report for financial years starting 1 January 2026, under new statutory regulations. The Companies (Directors’ Report) (Payment Reporting) Regulations 2025 layer a fresh narrative disclosure duty on top of the existing biannual reporting regime, and CFOs who treat the two as one exercise will get both wrong.

Large companies have reported payment practices to the government’s public portal twice a year since 2017, under the Reporting on Payment Practices and Performance Regulations. The 2026 change adds a second, board-level obligation: a narrative statement in the Directors’ Report itself, reviewed by the audit committee and subject to the same scrutiny as remuneration or going-concern disclosures. For finance chiefs, that shift moves payment practices from an administrative filing to a governance risk.

What Do the New Payment Reporting Rules Actually Require?

The Companies (Directors’ Report) (Payment Reporting) Regulations 2025 require in-scope companies to include a narrative account of payment policies, practices and performance directly in the Directors’ Report, not just the raw statistics already filed on the government portal. That narrative must explain how the company sets payment terms, how disputes are resolved, and whether practices have changed year on year. According to UK government research published alongside the reforms, late payments cost the UK economy around £11 billion a year, which is the policy rationale regulators will use to justify closer scrutiny of the new disclosures.

Executive Action

• Confirm which entities in the group meet the reporting threshold and which financial year the duty first applies to.
• Separate the statutory Directors’ Report narrative from the existing biannual portal return — they now require different content and different sign-off.
• Brief the audit committee that payment practices disclosure now carries board-level reputational exposure, not just filing risk.

Which Companies Must Comply, and From When?

The duty applies to large companies that meet two of three thresholds: turnover above £54 million, balance sheet total above £27 million, or more than 250 employees — the same test used for the existing portal reporting regime. The obligation bites for financial years beginning on or after 1 January 2026, meaning calendar-year filers will produce their first compliant Directors’ Report in early 2027, while companies with non-calendar year ends should map their specific first-affected period now rather than assuming a single deadline applies group-wide.

Executive Action

• Run the two-of-three threshold test across every UK subsidiary, not just the parent entity.
• Calendar the exact first-affected financial year per entity and diarise the Directors’ Report drafting deadline accordingly.
• Assign narrative drafting ownership between finance, company secretariat and legal before the first reporting cycle opens.

How Does the Fair Payment Code Change the CFO’s Playbook?

The Fair Payment Code, run by the Department for Business and Trade, is a separate voluntary accreditation sitting alongside the statutory rules, and CFOs should not confuse the two. Gold status requires paying 95% of invoices within 30 days; Silver requires 95% within 60 days, tightened to 30 days for payments to businesses with fewer than 50 employees. It is not mandatory, but a company disclosing weak payment performance in its Directors’ Report while declining to sign the Code invites exactly the scrutiny the CFO is trying to avoid. According to the Federation of Small Businesses, 14,000 UK businesses close every year because of late payment problems — a statistic increasingly cited by journalists and analysts reading Directors’ Reports side by side with Fair Payment Code registrations.

Executive Action

• Decide whether to pursue Fair Payment Code accreditation before the first statutory disclosure lands, not after.
• Require CFO or Group Treasurer sign-off on any supplier agreement setting payment terms below 30 days.
• Align procurement and accounts payable policy with the Code’s tiering before it becomes a board-visible gap.

What Should CFOs Build Before the Next Reporting Deadline?

Most finance functions can already produce the raw payment statistics the portal has required since 2017; the gap is the narrative capability the Directors’ Report now demands, explaining trends, disputes and policy changes in prose an investor or journalist can read without a data extract. CFOs should treat this as a controls exercise, not a copywriting task: the narrative must be auditable back to the same accounts payable data used in the statutory return, or the two disclosures will contradict each other under scrutiny.

Executive Action

• Build a single data pipeline that feeds both the portal return and the Directors’ Report narrative, so the two cannot diverge.
• Draft the narrative disclosure a full reporting cycle before it is legally required, and pressure-test it with the audit committee.
• Use INFORMD’s executive self-assessment tools to benchmark reporting readiness against the new requirements.

CFOs building the wider capital and controls agenda around this change may also find INFORMD’s capital approval assessment template useful for framing payment-terms decisions within the same governance discipline as other capital commitments, and our briefing library tracks related UK reporting reforms as they develop.

INFORMD provides intelligence briefings, tools and frameworks for senior business leaders across technology, finance, strategy and compliance. Based in Milton Keynes, UK, we help executives stay informed and act with confidence. Explore our full briefing library (/resources/) or access our free assessment tools (/tools-assessments/). Questions about your reporting obligations? Get in touch.

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