What are Payments Compliance Notices?
A Payments Compliance Notice is a report published by a contracting authority on the Central Digital Platform detailing how promptly it has paid invoices under public contracts during the previous six-month reporting period. This performance is measured against the prompt payment metrics and the publication of the notice is intended to provide transparency on performance and encourage faster payments by allowing comparison with private sector practices and performance.
For the avoidance of doubt, this notice is a distinct requirement from the notice which became effective on 1 April 2026 pursuant to s.70 of the Procurement Act 2023 to provide details of payments of more than £30,000 made by a contracting authority under a public contract. For more information on this requirement please see our previous insight: Contract payment information | Trowers & Hamlins law firm
Update – When did the notice go live and when is the next reporting period?
Payments Compliance Notices were introduced by the Procurement Act 2023 and are aimed at increasing transparency around how contracting authorities are complying with their duty to make payments to suppliers within 30 days.
The payments compliance notice regime commenced on 1 January 2026 (other than for procurements regulated by Welsh Ministers where the regime became effective from 1 April 2026) with the first reporting period spanning from 1 January 2026 to 31 March 2026. However, it was recommended in formal Government guidance that contracting authorities should cover the reporting period 1 October 2025 to 31 March 2026 so that there would be a 6-month comparator for the next reporting period. Each reporting period runs for 6 months under s.69(3) Procurement Act 2023, so the next reporting period runs from 1 April 2026 until 30 September 2026.
Given the impending conclusion of the second reporting period, what is the key information you need to know to stay on top of this compliance requirement?
What Contracts are in-scope?
The requirement to publish a Payments Compliance Notice only applies to "public contracts" (as defined in the Procurement Act 2023) that fall within scope. So, there is no need to publish a notice in relation to contracts with a value below the financial thresholds or payments under (eg) employment contracts or grant agreements.
In addition, the notices do not need to cover the following types of public contract:
- Concession contracts;
- Contracts entered into by transferred Northern Ireland authorities;
- Contracts entered into by schools; and
- Contracts entered into by private utilities.
While only payment performance in relation to "in-scope" public contracts requires reporting, authorities may choose to publish payment compliance notices for other public contracts/out of scope contracts voluntarily. This would provide greater transparency on payment performance, for below-threshold contracts in particular.
Contents of Payments Compliance Notices
Regulation 38 of the Procurement Regulations 2024 specifies the content requirements for the payment compliance notice. This includes:
- Contracting authority information;
- Start and end dates of the relevant six-month reporting period (see below);
- Details of payments made under public contracts, including:
- The average number of days taken to pay invoices, counting from the day after the invoice is received; and
- The percentage of payments made within specified timescales (1- 30 days, 31 to 60 days, and 61+ days). Day 1 is considered the day after the invoice day;
- The percentage of invoices paid in compliance with the prompt payment regime (i.e. within 30 days from invoice receipt or by the date the payment falls due (whichever is later)) expressed as a percentage of the total number of invoices that were or should have been paid in accordance with that term in that reporting period;
- The percentage of payments due to be paid in that reporting period which were not made in that reporting period; and
- A signed statement from a finance director or equivalent officer approving the notice (along with their details).
Reporting Periods and Deadlines
The reporting periods are fixed six-month windows from 1 April to 30 September, and from 1 October to 31 March. As noted earlier in this article, the next reporting period will be 1 April 2026 until 30 September 2026.
Payments Compliance Notices must be published within 30 days of the end of each reporting period if any payments or invoices became due during that time. Therefore, authorities should be preparing, finalising and submitting their next Payment Compliance Notice during October 2026 and no later than 30th October 2026.
Consequences for Non-Compliance
While the Procurement Act 2023 does not impose direct penalties for non-publication of a payment compliance notice, the Procurement Compliance Services (PCS) team within the wider Procurement Compliance & Oversight (PCO) Unit, oversees general compliance with the Procurement Act 2023 and has powers to:
- Investigate compliance;
- Issue recommendations and require progress reports;
- Publish reports highlighting non-compliance; and
- Provide guidance on lessons learned.
These measures aim to encourage transparency and timely payments without punitive sanctions.
Conclusions
Payments Compliance Notices are part of the Government's significant shift towards greater transparency in public sector payment practices. Nevertheless, given the infancy of the transparency regime, it remains to be seen how successful these notices are in delivering the transparency it is perceived they can produce.
If contracting authorities have not done so already, they should ensure they have implemented systems and processes to ensure compliance with this new reporting requirement. As increasingly more contracts are procured under the Procurement Act 2023, manual reconciliation of this information will become an increasing administrative burden. Failure to publish such notices brings with it compliance breach and potential (adverse) scrutiny from the Procurement Compliance Service.
