UK government proposes mandatory disclosures and financial penalties for modern slavery reporting

On 30 June 2026, the UK Government introduced the Immigration and Asylum Bill into the House of Commons (the “Bill”). Part 5 of the Bill proposes significant amendments to the section 54 Modern Slavery Act 2015 (“MSA”) reporting regime, introducing mandatory disclosures, financial penalties and new reporting obligations for public authorities. The Bill’s second reading took place on 13 July 2026.

Section 54 of the MSA (see our Quick Guide) currently requires commercial organisations with an annual turnover of £36 million or more to prepare and publish an annual slavery and human trafficking statement (known as a “modern slavery statement”). While initially considered a novel piece of legislation when it was first enacted, the section 54 transparency requirement has long been criticised for lagging behind international peers and for lacking an effective enforcement mechanism. The sole existing sanction for non-compliance is a Secretary of State injunction in the High Court, a power we are not aware of having ever been used.

The proposed changes have been a long time in the making. Following a 2019 public consultation, the UK Government committed to “an ambitious package of measures to strengthen and future-proof the Modern Slavery Act’s transparency legislation”. An October 2024 House of Lords Select Committee report and a July 2025 Joint Committee on Human Rights report have both subsequently recommended strengthening section 54, alongside mandatory human rights due diligence and forced labour import bans. The Government broadly agreed in its October 2025 response, though its commitments remained largely statements of intention. The changes contemplated by the Bill are largely aligned with those earlier commitments.

Key takeaways

• The Bill, if adopted in its current form, would make the content of modern slavery statements mandatory. In-scope organisations would be required to report against prescribed topics set out in a new Schedule 4ZA to the MSA, including risk assessments, policies, due diligence processes, training, and effectiveness measures.

• Modern slavery statements would need to include an accuracy declaration where the signatory would be required to declare that the statement is accurate to the best of their knowledge and belief. Parent undertakings would be permitted to approve and sign statements on behalf of subsidiaries.

• Modern slavery reporting would be extended to public authorities above a financial threshold to be set in secondary legislation.

• A financial penalty regime would be introduced for non-compliance, with fines of up to the greater of £1 million or 1% of the organisation’s total turnover.

• The existing six-month publication deadline, currently set out in statutory guidance only, would become a statutory requirement. Organisations may also be required to submit statements electronically to the Secretary of State.

• The Bill does not go so far as to mandate human rights due diligence on supply chains, despite previous recommendations, including from the Joint Committee on Human Rights and the Independent Anti-Slavery Commissioner (“IASC”). The Government is still considering this as part of its wider review of the UK’s approach to responsible business conduct.

The proposed amendments

Mandatory statement content

The Bill would move section 54 from the six suggested reporting areas (fleshed out in non-binding statutory guidance recently updated by the Home Office) to a prescribed disclosure model set out in a new Schedule 4ZA (introduced by clause 44 and set out in Schedule 5 to the Bill). 

Much of the prescribed content aligns with these existing suggested areas and the updated guidance, and those already reporting under similar international regimes (e.g., Australia, Canada and California) are subject to comparable mandatory disclosure requirements. The change is therefore an evolution rather than fundamental shift in the substance of expected disclosures, although those disclosures now have added weight behind them.

The mandatory disclosures would cover: 

• the entity’s structure, operations and supply chains; 

• steps taken to identify and mitigate slavery and human trafficking risks (or an explanation of why no assessment has been carried out); 

• policies and due diligence processes; 

• training made available to staff and, so far as reasonably available, to staff in supply chains; and 

• an assessment of effectiveness measured against appropriate performance indicators. 

For several topics, organisations would have three options: 

(i) make the substantive disclosure; 

(ii) provide a positive statement that the relevant risk does not exist; or 

(iii) state that no action has been taken and give reasons why.

Approval, certification and the accuracy declaration

Under the existing section 54(6), modern slavery statements must already be approved by the board of directors (or equivalent) and signed by a director (or equivalent). Clause 45 of the Bill would retain and build on these requirements.

First, parent undertakings would be permitted to approve and sign statements on behalf of subsidiary undertakings. Although group-level reporting is common practice, statements have previously been required to be approved and signed by each individual reporting entity. This change is helpful, as many multinational groups have multiple entities in scope and this will streamline the sign-off element. This approach also aligns with that under Australia's Modern Slavery Act 2018, though notably the Australian regime requires consultation between the entities covered by a joint statement, ensuring a degree of engagement and buy-in across group members.

Second, statements would be required to contain a declaration by the signatory that the statement is accurate to the best of their knowledge and belief. The existing signature and approval requirements already ensure a degree of engagement at senior level, and this declaration builds on this. It echoes the approach under Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act, which requires reports to include an attestation of board approval signed by a member of the governing body. The declaration may further focus minds and lead to more rigorous scrutiny from the board during the approval and sign-off process, with those responsible for preparing statements likely to face additional questions.

Extension to public authorities

Clause 46 would introduce a new section 54ZA, extending the duty to prepare a modern slavery statement to public authorities with a total budget above a threshold to be set in secondary legislation. The Bill defines “public authority” as a person with functions of a public nature, with some exemptions.

Publication and submission

Clause 47 would introduce a new section 54ZB, consolidating the publication and submission requirements. 

Organisations with a website would continue to be required to publish the statement with a prominent homepage link. 

The Secretary of State would be empowered to mandate electronic submission, likely to the existing voluntary modern slavery statement registry. 

The existing six-month publication deadline, currently in statutory guidance only, would be placed on a statutory footing.

Financial penalties

Perhaps the most significant change proposed by the Bill is the introduction of financial penalties for non-compliance. Clause 49 would introduce a new section 54ZD, empowering the Secretary of State to make regulations providing for financial penalties for failure to comply with the duties under the regime “without reasonable excuse”.

The amount of any penalty – which will only be able to be imposed after a warning notice has been issued – would not exceed the higher of £1 million or 1% of the organisation’s total turnover (or, in the case of a public authority, 1% of its total budget). 

Fines for non-compliance, particularly those tied to turnover, should help focus minds and drive engagement with compliance. However, the practical impact will ultimately turn on how actively the regime is enforced, and the detail of the secondary legislation shaping the enforcement approach will be something to watch closely.

The wider context: mandatory human rights due diligence

The Bill strengthens section 54 but stops short of mandating human rights due diligence on supply chains. 

The IASC has publicly criticised this omission. In a policy brief on the Bill published on 3 July 2026, the IASC stated that while the transparency strengthening is welcome, the UK “has fallen behind our international partners and is becoming a dumping ground for forced labour goods”.

In December 2025, the IASC published model legislation that would go significantly further, including a duty to prevent serious human rights harms (with a due diligence defence), a forced labour import ban, and fines of up to 5% of turnover. 

Concerns around forced labour in particular have been further underscored by recent international developments, including a US trade investigation into the effectiveness of trading partners in combatting forced labour. The investigation determined 60 trade partners are failing to effectively prevent the import of goods made with forced labour. This includes Canada, which was determined to have an existing regime but not effectively enforce it and has since introduced Bill C-35, which would replace the current regime with a more targeted model focused on high-risk goods and enhanced supply chain tracing requirements. The UK was found to have imposed a partial regime preventing the importation of certain forced labour goods. Whether strengthening what is fundamentally a disclosure-based regime in the UK will be seen as sufficient in the face of this conclusion – and broader growing scrutiny – is something that should be kept under review.

On 17 June 2026, a separate Private Members’ Bill, the Commercial Organisations and Public Authorities Duty (Human Rights and Environment) Bill, was introduced in the House of Lords by Baroness Young of Hornsey. That Bill would impose a duty to prevent human rights and environmental harms, with a requirement to conduct due diligence and backed by civil and criminal liability, director liability (including imprisonment), and penalties of up to 10% of global turnover. However, Private Members’ Bills without Government backing rarely succeed and in its current form it is doubtful that this Bill would be passed (as with the prior version of the Bill introduced in 2023).

The Government has launched a review into the UK’s approach to responsible business conduct, including mandatory due diligence, through its Office for Responsible Business Conduct, though at present there is little sign of appetite to go beyond a reporting-based regime.

What should businesses do?

The move to mandatory disclosures is well overdue but is likely to be an evolution rather than a revolution for businesses already in scope. 

Much of the prescribed content aligns with the existing section 54 suggested areas, the recently updated statutory guidance, and the requirements of similar international regimes. Businesses using the voluntary International Reporting Template prepared by the UK, Australian and Canadian Governments in July 2025 may find that its broader scope substantially aligns with the expanded mandatory content proposed by the Bill. 

That said, there are areas where businesses should focus their attention:

• Effectiveness reporting - The most challenging area is likely to be effectiveness, often the least mature and least disclosed-against area. Businesses will need to develop (or continue to develop) appropriate KPIs to track performance.

• Board engagement - The new accuracy declaration requirement will sharpen focus on modern slavery statements at board level. Those responsible for preparing statements should expect more rigorous scrutiny from the board during the approval and sign-off process.

• Enforcement risk - While fines tied to turnover will focus minds, the practical impact will turn on how actively the regime is enforced. Businesses should monitor the secondary legislation shaping the enforcement approach.

• Wider regulatory & stakeholder convergence - The MSA changes do not exist in a vacuum. Courts, investors, parliamentary committees, consumers and the media are all increasingly scrutinising responsible business practices. Adding into the mix a regulatory regime backed by financial penalties means the business case for robust modern slavery compliance programmes is ever-growing.

Next steps

The Bill – which covers much more than just section 54 – is at an early stage of the parliamentary process. Its progress should be closely monitored. 

Key details, including the enforcement procedures and the electronic submission requirements, will be set out in secondary legislation.

For more information on modern slavery reporting and supply chain due diligence, see our Quick Guide, our CSDDD materials and our materials on Business & Human Rights.