The new stricter payment rules came into force from 1 April and require firms to demonstrate they are paying 95% of invoices within 60 days, and also paying all their invoices within an average of 55 days.

This represents a tightening of previous regime that required 85% of all supply chain invoices in 60 days in one of two previous six-month reporting periods.

Next April the prompt payment rules set by Government will decrease further to 45 days, falling to 30 days in the following years.

On public sector work invoices alone contractors still need to pay within 30 days, as set out in the Prompt Payment Code.

The rule changes were set out in the last Autumn statement alongside proposals to introduce reporting on retention repayments, which will not come into effect until April 2025.

On retentions this will require main contractors and clients to report:

• the average number of days taken to make retention payments, after practical completion and end of contractual defects liability period;

• the percentage of retention payments made within the reporting period, which were paid in 30 days or fewer, between 31 and 60 days, and in 61 days or longer;

• the percentage of retention payments due within the reporting period which were not paid within the agreed payment period; and

• the average value of retention held per construction contract (% of contract value).