Regulation Action Plan: Corporate Reporting

The Chancellor today set out the progress that has been made to deliver on the Government’s vision for ensuring regulators and regulation support growth. The Government have published “Regulation Action Plan—Progress Update and Next Steps”, setting out how the Government are going further to realise the vision we set out in the action plan in March 2025.

This progress update was accompanied by a package of specific reforms, in which the Government commit to reducing the annual administrative burden of regulation on businesses by £5.6 billion by the end of this Parliament. It also outlines the actions already taken to meet this target, including that six months after we announced our action plan, we have already identified and announced £1.5 billion in gross savings, which will contribute to the target to reduce the regulatory administration burden by 25% by the end of this Parliament.

My Department has undertaken critical work to reduce the regulatory burden on business. We have already:

increased the monetary size thresholds for micro, small, medium and large-sized companies by approximately 50%, enabling up to 132,000 companies to benefit from lighter-touch requirements; and we are eliminating duplicative or redundant reporting requirements from the director report and director remuneration report and policy, delivering £185 million in administrative savings for businesses every year.

launched a call for evidence on improving the UK’s licensing regime for the hospitality sector, following the recommendations of my Department’s licensing taskforce.

issued a strategic steer to the Competition and Markets Authority setting out how Government expect the CMA to support economic growth across all aspects of its activity. In parallel, to support growth, investment and business confidence, the CMA is embedding the four principles of pace, predictability, proportionality and process across all its work.

These actions are based on direct feedback from businesses about how certain regulations act as barriers to their success. This feedback is captured in the 2024 business perceptions survey, which I have published today. As part of the actions set out by the Chancellor in our progress update on the regulation action plan, my Department will:

run a series of policy sprints across specific sectors to identify regulatory barriers which affect companies with innovative business models and high potential scale-ups. We will also deliver a range of regulatory deep dives, looking across each sector of the economy and delivering strategic reforms that best support business.

consult in the coming weeks on proposals to provide greater certainty for businesses on whether transactions will be subject to merger control, proposals to ensure remedies are regularly reviewed, and changes to how the CMA makes decisions in mergers and markets investigations.

work with the CMA as it launches two business surveys during this financial year, aimed at gathering valuable insights and further strengthening its engagement with the business community.

bring forward a consultation on specific reform proposals to the opt-out class action regime to strengthen predictability and cost-effectiveness, and ensure effective consumer protection.

deliver in partnership with the Financial Reporting Council to clarify the UK corporate governance code guidance, making it clear that the payment of non-executive directors in shares is appropriate, enhancing the ability of UK listed companies to attract the highest calibre of talent from across the global stage.

commission the Investment Association to discontinue its public register, which tracks shareholder dissent, thereby removing duplication with UK corporate governance code requirements.

We are committed to going further and improving the regulatory landscape for businesses. A key part of the package is my Department’s plans to modernise and simplify the UK’s corporate reporting framework. This includes legislative changes and an ambitious and holistic consultation planned for next year. Together, these measures could save UK businesses around £230 million per year in reporting costs.

The legislative changes, which we aim to bring forward as quickly as possible, will implement two significant exemptions, to lift up to 51,000 thousand companies from unnecessary reporting obligations, as well as removing the requirement to produce a director’s report for all companies required to produce one. The changes we intend to make are:

first, the Government will aim to exempt most medium-sized private companies from the need to produce a strategic report as part of their annual report and accounts. This means that medium-sized businesses that can benefit from existing exemptions will no longer need to prepare narrative reporting, so they can focus on running their business, rather than producing information that is disproportionate to their scale and ownership model.

secondly, the Government will aim to exempt wholly owned subsidiaries from the need to produce a strategic report where their disclosure is included in the annual report of a UK parent. This will eliminate duplicative reporting within corporate groups.

thirdly, the Government will aim to remove the requirement for any company to produce a director’s report as part of their annual report and accounts. This report is often seen as a cluttered, compliance-driven document that has accumulated numerous disclosures over time, which offers little useful insight for investors. Through the removal of the director’s report, we will remove redundant and duplicative reporting, building on the changes that came into force earlier this year https://www.legislation.gov.uk/uksi/2024/1303/contents/made However, some useful reporting requirements, including reporting on energy and emissions, will be retained and moved elsewhere in the annual report.

These reforms are anticipated to benefit up to 44,000 medium-sized private companies, and around 7,000 subsidiary companies, who will no longer be required to produce strategic reports. Approximately 440,000 companies will no longer need to compile a director’s report.

In October 2024, the previous Secretary of State for Business and Trade announced plans to consult in 2025 on measures to simplify and modernise the UK’s non-financial reporting framework. Stakeholder engagement over the summer indicated that only reviewing non-financial reporting would fall short of what is needed. Businesses, investors and professional bodies have urged the Government to adopt a holistic approach in order to consider the annual report and accounts in their entirety.

The Government have listened and expanded the scope of their reforms, now framed as the Modernisation of Corporate Reporting programme. A broad consultation will be delivered in 2026. To meet what industry has asked for, we will co-design reforms covering remuneration reporting, corporate governance reporting, and the financial reporting framework, as well as improving regulatory alignment across reporting frameworks, and we will consider how corporate reporting should function in a digital age.

This broader initiative reflects a commitment to far-reaching reform, aiming to restore company reporting to its original purpose, and providing concise, decision-relevant information for investors and creditors, while removing unnecessary burdens on business.

The Government will continue to improve regulation in the UK, ensuring that it enables growth and does not unduly hold back investment.

To drive progress, I have also published “Unlocking Business: Reform Driven by You”, a business questionnaire, to gather direct insight from firms on where regulation is creating unnecessary burdens. This is a chance for businesses, investors, representative organisations and charities to tell us which regulations, forms, compliance processes and regulators are imposing the undue or unnecessary burdens, so we can deliver a pro-business programme of regulatory reforms.

The Government will continue to put industry at the heart of this programme, working with regulators and Parliament to ensure that the regulatory system protects consumers and supports competition, but also encourages new investment, innovation and growth.

The full regulation action plan progress update and business questionnaire are available on gov.uk.

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