PRESS RELEASE : Government puts business first with Brexit regulation shakeup [May 2023]
The press release issued by the Department for Business and Trade on 24 May 2023.
Plans unveiled to ease costly reporting burdens on business, freeing up companies to focus on growth.
Plans to reduce costly and time-consuming regulatory burdens on business have been revealed by the Government today [Wednesday 24 May].
A wide range of UK companies, investors and industry experts have been invited to give their views on non-financial reporting regimes, in a new call for evidence that aims to find ways to reduce reporting regulation burdens on businesses so that they can focus on growth.
Non-financial reporting provides valuable information to investors and is a way for companies to tell their ‘story’ beyond financial information. This includes future strategy, and detail on how a wide range of factors may affect the company’s performance, providing insight into the business and culture of the company.
However, companies and investors have been calling for the simplification of these requirements in the wake of the deregulatory opportunities offered by Brexit. Annual reports now run at an average of 200 pages for the largest companies in the UK, creating unnecessary burden for businesses. With this review, the Government will aim to:
Save businesses time and money with a more streamlined and focused corporate reporting regime
Ensure company annual reports contain clearer, more useful information, by asking investors what really matters to them
Make the UK an even more competitive place to do business by placing growth and investment at the heart of reporting requirements
Business Minister Kevin Hollinrake said:
We want to shred unnecessary paperwork so businesses can focus on what’s important to them – growing and making profit.
By seizing on the opportunities of Brexit to streamline our non-financial reporting regime, we’ll make the UK an easier and more competitive place to do business, while delivering on our priority to grow the economy.
As part of this, we will also review the size thresholds that determine some of the information a company needs to produce in their annual report, in particular the definition of micro-enterprises. This threshold, a relic of an EU directive, could be forcing too many of Britain’s smallest businesses to spend time and money preparing information to a level of detail only needed for larger companies, distracting them from focusing on growth and creating jobs.
The call for evidence will end on 16 August. The Government will then use the information collected to develop detailed proposals for public consultation next year.
Subject to the views shared, the Government will then look to legislate for any changes.
This builds on the “Smarter regulation to grow the economy” policy paper (10 May 2023) which set out how the government would improve regulation across the board to reduce burdens and drive economic growth now that the UK has left the European Union.
Our departure from the EU allows us to shape rules and processes so that they work for the UK’s specific circumstances and businesses, including for non-financial reporting, while upholding our strong record on workers’ rights.
