The government has published a ministerial statement and summary of responses following the call for evidence launched in May 2023 on non-financial reporting.
The government launched the call for evidence in recognition of the fact that companies' reporting requirements have expanded over time, increasing the size and complexity of annual reports. For further details on the call for evidence, see our blog post here.
The respondents to the call for evidence were largely supportive of non-financial reporting but a number of issues were raised around the complexity of reporting, the costs associated with producing the reports and the burden on smaller companies.
The key next steps that have been outlined are:
- the government intends to introduce legislation in summer 2024 to raise the monetary threshold used for the classification of companies as large, medium or small by 50%. This will lead to a reclassification of a significant number of companies and a resultant change in their reporting obligations;
- it will also consult on proposals to increase the number of employees that makes a company "medium" from 250 to 500 and to exempt medium companies from the requirement to produce a strategic report; and
- the legislation will also remove certain disclosures currently required in the Directors' Report and the Directors' Remuneration Report.
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