Government Plans to Widen Regulatory Exemption for Smaller Businesses
The Prime Minister has announced plans to relax rules for businesses with fewer than 500 employees to comply with certain regulatory and reporting requirements.
Until now, the Government's starting point for policy development has been to exempt businesses with fewer than 50 employees from certain regulatory requirements. As part of its wider commitment to reducing bureaucracy, from 3 October 2022, that starting point has been revised to capture businesses with fewer than 500 employees. Unless the assumption is overridden in individual cases, those businesses will now be excused from any reporting requirements applicable to new regulations under development as well as any subject to current and future review. This will include retained EU laws, which themselves could be subject to a significant shake-up if the Retained EU Law (Revocation and Reform) Bill is passed into law.
The Government also intends to consult in future on the prospect of raising the threshold further so that the starting point would be that businesses with fewer than 1,000 staff would be excused from reporting requirements.
Whilst the threshold has been amended with immediate effect, it remains to be seen what specific regulatory requirements will be affected. There has been some speculation that the change could affect gender pay and executive pay reporting requirements.
