How UK companies must prepare a modern slavery statement and meet disclosure requirements

Understanding UK Modern Slavery Statement Requirements

As your company grows, crossing certain revenue thresholds brings new operational challenges, from tax obligations to financial reporting. These are part of your broader reporting obligations. However, one compliance hurdle often catches UK-based startups by surprise: the requirement to publish an annual modern slavery statement. This is not just for large, publicly listed corporations. If your business, including its global parent and subsidiary entities, has a combined annual turnover of £36 million or more, you are legally required to report on the steps you take to prevent modern slavery in your business and supply chains. Understanding this obligation early is key to managing both legal and reputational risk as you scale.

Why Modern Slavery Compliance Matters for Startups

For early-stage companies, particularly in e-commerce or professional services, the idea of supply chain transparency can seem distant. Your focus is on product-market fit and managing cash flow with a lean team using tools like Xero and spreadsheets. However, modern slavery statement compliance UK is a statutory duty that can arise sooner than you expect. The legal requirement is established by Section 54 of the UK Modern Slavery Act 2015. The Act does not demand a perfect, risk-free operation. Instead, it requires transparent reporting on your due diligence and risk mitigation efforts.

Beyond the Law: Reputational and Investor Scrutiny

At its core, the legislation aims to increase corporate transparency and encourage businesses to actively address the risks of forced labour and human trafficking. This annual transparency statement is a public document, scrutinised by investors, customers, and partners. For a growing company, a well-drafted statement signals ethical maturity and robust governance, which can be a significant factor during funding rounds or M&A due diligence. The reputational risk of non-compliance, or a poorly handled statement, often outweighs the direct government penalties, which include the possibility of a court injunction forcing you to comply.

The First Hurdle: Calculating the £36m Turnover Threshold

The most common point of confusion is calculating the turnover that triggers the reporting requirement. The duty applies if a commercial organisation's total annual turnover is £36 million or more. The critical distinction here is that the £36 million threshold applies to the consolidated group turnover, including all parent and subsidiary undertakings globally. It is not just the revenue of your UK-based entity that you see in your accounting software.

A scenario we repeatedly see involves a UK startup with a larger overseas parent. Consider this example:

• A UK-based e-commerce company has an annual turnover of £8 million.
• Its US-based parent company has a turnover of $40 million.
• To check for compliance, the group must consolidate this global turnover. Converting the parent’s revenue to sterling (e.g., at an exchange rate of £1 to $1.25), the US turnover is £32 million.
• The group’s total consolidated turnover is £40 million (£8m + £32m), which is above the £36 million threshold.

In this case, the UK entity is legally required to publish a statement, even though its individual turnover is far below the trigger.

What to Include in Your Annual Transparency Statement

Once you confirm the requirement applies, the next step is understanding what the statement must contain. While the content can be tailored to your business, the UK government provides guidance on six recommended reporting areas. These themes provide a strong framework for your statement and ensure you cover the expected topics. They are:

1. Your structure and supply chains: Describe your business model, corporate structure, and the key areas of your supply chain. Our guide on beneficial ownership and corporate structure has notes on describing corporate groups.
2. Your policies on modern slavery: Detail your internal policies that address anti-slavery and human trafficking.
3. Your due diligence process: Explain how you assess and manage modern slavery risk in your business and supply chains.
4. Risk assessment: Outline the specific parts of your business and supply chains where there is a risk of modern slavery and what you are doing to manage it.
5. Measuring effectiveness: Describe how you measure the effectiveness of the steps you are taking, using key performance indicators (KPIs) if possible.
6. Training: Explain the training on modern slavery available to your staff.

A Practical Approach to Supply Chain Due Diligence

For a startup with a limited procurement function, collecting verifiable forced-labour risk data from every supplier can feel impossible. This is where a risk-based, tiered approach becomes essential. It is a critical distinction from auditing every supplier equally. You do not need to treat your local accounting firm with the same level of scrutiny as a manufacturing partner in a high-risk jurisdiction.

How to Prioritise Your Efforts

Start by mapping your supply chain and categorising suppliers by potential risk. For an e-commerce brand, this means prioritising due diligence on product manufacturers or raw material suppliers, especially those in regions with weaker labour protections. For a professional services firm, the primary risk might lie with subcontractors or facilities management providers, such as cleaning services. You can start by sending simple questionnaires to your highest-risk tier suppliers to understand their own policies and processes. The goal is to show you are taking reasonable and proportional steps, not to have a perfect, exhaustive dataset from day one. This pragmatic approach is central to effective supply chain reporting requirements.

From Draft to Publication: Approval and Deadlines

Drafting the statement is a significant task, but the procedural steps that follow are just as important for modern slavery statement compliance UK. Getting this wrong can undermine all your data collection efforts.

1. Board Approval and Director Signature

The statement must be formally approved by your board of directors and signed by a director or equivalent. This step signifies that the issue has top-level oversight and accountability within your organisation. A simple email chain is not sufficient. This approval should be a formal agenda item in a board meeting and recorded in the minutes. Use our Companies House filing calendar to diarise key board and filing dates.

2. Publication Deadline

Timing is critical. The statement must be published within six months of your company's financial year-end. This deadline aligns with other key financial reporting timelines. You can use our CT600 preparation guide to review year-end reporting obligations.

3. Website Accessibility

For it to be considered compliant, the statement must be published on your organisation's website with a link in a prominent place on the homepage. Hiding the statement deep within your website does not meet the legal requirement for transparency. A common best practice is to place the link in the website footer, alongside other key compliance links like your privacy policy.

Key Steps for Modern Slavery Compliance

Navigating these requirements for the first time is a challenge, but it is manageable with a structured approach. The reality for most early-stage startups is more pragmatic: focus on incremental progress and transparency.

First, urgently clarify your global consolidated group turnover to determine if you meet the £36m threshold. This is the absolute starting point. Second, adopt a tiered, risk-based approach to supplier due diligence, focusing your limited resources where the risk is highest. Finally, diarise the key deadlines for board approval and publication to ensure you do not miss the statutory window. By treating this not just as a legal formality but as a component of your UK corporate social responsibility laws, you build a more resilient and ethical business prepared for its next stage of growth. For a full list of recurring obligations, see our Reporting Obligations hub.

Frequently Asked Questions

Q: What are the penalties for not publishing a modern slavery statement?
A: The primary penalty is a High Court injunction compelling the organisation to publish a statement. While financial penalties are not specified in the Act, the reputational damage from non-compliance, including negative attention from investors, customers, and the media, is often a more significant and immediate consequence for a growing business.

Q: Do we need to file the statement with Companies House?
A: No, the modern slavery statement is not filed at Companies House. The legal requirement is to publish it on your organisation's website. However, since 2021, organisations can also voluntarily upload their statement to the government's central registry to increase transparency, which is considered good practice.

Q: Our parent company is based overseas. Does UK law still apply to our UK subsidiary?
A: Yes, if the global group's consolidated turnover is £36 million or more, the UK subsidiary that carries on business in the UK must publish a statement. The calculation is based on the entire group's revenue, regardless of where the parent company or other subsidiaries are located.

Q: What is an anti-slavery policy and do we need one?
A: An anti-slavery policy is a formal document outlining your organisation's commitment to preventing modern slavery and human trafficking. While not legally mandatory to have a policy, it is a recommended step. Your modern slavery statement must report on your policies, so having one is a foundational part of compliance.