UK Government backtracks on new reporting requirements

In a surprise U-turn, the Government has withdrawn draft legislation which was to impose new reporting obligations on the largest UK-incorporated companies. 

The Companies (Strategic Report and Directors’ Report) (Amendment) Regulations were laid before Parliament in July and would require UK-incorporated companies with more than 750 employees and more than £750m in turnover to include new information in their annual reports. This was to include a resilience statement, an audit and assurance policy, details of their distribution policy and level of distributable reserves, and a statement on material fraud (see here).

The Government has stated that it has listened to concerns about increasing the burden on companies, and the impact that has on the competitiveness of the UK. It has therefore withdrawn the regulations and will instead introduce a simpler framework (in due course). Click here for the statement. 

The reporting regulations were one part of a series of reforms aimed at restoring trust in audit and corporate governance. Other elements include the introduction of a new-look regulator, ARGA, with additional enforcement powers (which has been delayed) and amendments to the UK Corporate Governance Code (on which a consultation closed in September).