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Toughened payment rules from 1 April

From 1 April 2021, suppliers will be required to pay 85% of invoices within 60 days.

Procurement Policy Note (PPN) 07/20 will come into force from 1 April, increasing the prompt payment threshold for suppliers bidding for Government contracts above £5 million per annum. Suppliers will be required to show that they pay 85% of invoices within 60 days and have an action plan in place to achieve the required standard of 95% in future, otherwise they risk being prevented from bidding.

Currently a company can still pass if they pay 75% of invoices within 60 days and submit an action plan, and the Cabinet Office has been clear that the threshold ‘will be ratcheted up over time until it reaches 95%’.

Last updated 23 March 21