Firms close to financial year end to get Modern Slavery reporting concession

Lord Bates, a Home Office minister, said that a 'transition provision' would be enacted, so that organisations subject to the new requirements would "have sufficient time to consider the new provision and the statutory guidance" before publishing their first 'anti-slavery statement' required by the new rules.

Regulations setting the turnover threshold at which the reporting requirements would kick in for commercial organisations have now been approved by the Houses of Commons and Lords, but have not been enacted. Regulatory expert Sean Elson of Pinsent Masons, the law firm behind Out-Law.com, said that the transitional provision was a "welcome practical solution" for those organisations approaching the end of their financial years.

"However, organisations should consider now how they intend to comply, especially where there are a number of subsidiaries either here or overseas," he said.

"Businesses need to recognise whether they are caught by the new requirement and the extent of the work that will be required to give effect to it. Although the reporting requirement is for the purpose of increasing awareness of the issues and to make a difference globally, the government's intention is not to make the requirement too onerous," he said.

The 2015 Modern Slavery Act introduces a new transparency in supply chains provision described by the Home Office minister as "the first in the world". Large commercial organisations caught by the requirements must publish an annual anti-slavery statement, setting out the steps that they have taken during the financial year to ensure that slavery and human trafficking are not taking place in their own business or in their supply chains, in a prominent place on their company websites.

The new rules apply to incorporated companies or partnerships that carry on a business, or part of a business, supplying goods or services in the UK; and that meet the turnover threshold included in the regulations. This threshold will be set at £36m per annum in line with the definition of a large company set out in the Companies Act, and will apply to the turnover of the business itself or the turnover of a parent company and its subsidiaries.

The government will issue statutory guidance to accompany the new regulations once fully in force. A spokesperson for the Home Office told Out-Law.com that this was expected "in the coming weeks".

Editor's note 06/11/15: This story has been amended to reflect the fact that different parts of the Modern Slavery Act are being brought into force at different times, We apologise for any confusion.