What reforms to the Modern Slavery Act mean for organisations

The Immigration and Asylum Bill (the Bill), introduced on 30 June 2026, would transform the UK’s modern slavery reporting regime from a largely discretionary, unenforced transparency exercise into a prescriptive compliance obligation backed by significant financial penalties. For in-scope organisations (commercial entities with £36 million or more in annual global turnover carrying on business in the UK, plus certain public authorities), this means a fundamental shift in the governance, resourcing and board-level attention required for modern slavery reporting.
 
The reforms address long-standing criticism that section 54 of the Modern Slavery Act 2015 (MSA) is a “toothless tiger” and are widely seen as an interim step towards broader mandatory human rights which due diligence legislation and possible forced labour import bans. The Bill is currently at Public Bill Committee stage, with the Committee expected to report back by 3 November 2026 and enforcement expected from the 2027 reporting year.

Prescriptive “comply or explain” reporting obligations

The central reform is a shift to mandatory, detailed reporting requirements through a new Schedule 4ZA to the MSA, adopting a “comply or explain” model: organisations must provide specified information or state that they have not taken particular steps and explain why.

Mandatory information would include:

• Structure, operations and supply chains
• Risk identification
• Risk mitigation and due diligence
• Policies
• Training
• Effectiveness and key performance indicators (KPIs)
• Assessment of effectiveness in ensuring slavery and human trafficking are not occurring, with reference to appropriate KPIs

This framework significantly raises expectations: entities disclosing an absence of policies, due diligence or training may face heightened stakeholder, regulatory and commercial scrutiny, even though the MSA remains formally focused on transparency rather than a duty to prevent harm.

Enhanced approval, certification and timing requirements

The Bill calls for certain key changes. For example:

• Statements must be approved by the board and signed by a director (or equivalent) only after the end of the relevant financial year, with the date of approval specified. A parent company may approve statements on behalf of its subsidiaries.
• Statements must include a formal certification, in the form of a declaration signed by a director (or equivalent), verifying that the statement is accurate to the best of their knowledge and belief. Directors (or their equivalent) will therefore be required to have sufficient insight into operations and supply chains to sign in good faith.
• Statements must be published “as soon as reasonably practicable” and within six months of the end of the financial year, codifying existing government guidance on a statutory footing.
• The Bill also empowers the Secretary of State to require submission of statements to a central registry, similar to those in Australia and Canada, facilitating benchmarking and comparative scrutiny.

Extension of obligations to public authorities

The Bill extends slavery and human trafficking reporting obligations to public authorities meeting to-be-specified financial thresholds, covering the same prescriptive content requirements as for commercial organisations. Public bodies will face increased pressure to demonstrate thorough due diligence in their procurement, which is expected to translate into more demanding contractual provisions and supplier assessments for companies seeking public sector contracts.

Financial penalties and enforcement

At present, the Secretary of State may seek an injunction requiring compliance, but this power has never been exercised, and there is no mechanism to impose fines. The Bill would introduce a new financial penalties framework. Pursuant to the new Bill, the Secretary of State would have the power to impose civil penalties for failure to comply “without reasonable excuse”, with the maximum penalty being the greater of 1% of the organisation’s total turnover (total budget for public authorities) or £1 million.

The existing ability to seek injunctive relief is retained. The reference to “reasonable excuse” suggests scope for proportionality, but organisations should expect increased scrutiny of both the existence and quality of their statements and underlying practices.

Interaction with other legislative proposals and international developments

The Bill sits alongside a wider landscape of evolving regulation across multiple jurisdictions, including:

• A Private Member’s Bill in the UK proposing a duty on companies and public authorities to prevent human rights and environmental harms, including mandatory due diligence and potential criminal liability for modern slavery offences.
• The EU’s Corporate Sustainability Due Diligence Directive (CS3D), which will require in-scope companies to undertake risk-based due diligence on human rights and environmental impacts, phasing in from 2027 for the largest companies and applying fully to all in-scope companies by 2029.
• The EU Forced Labour Regulation (applying from December 2027) and the U.S. Uyghur Forced Labor Prevention Act, introducing import bans linked to forced labour risks.
• Australia’s announced plan to introduce a criminal offence for companies with annual revenue above AUD$100 million that fail to prevent modern slavery, with a defence based on reasonable preventative steps.

The UK’s proposed reforms remain focused on mandatory disclosure rather than a direct duty to prevent modern slavery, but the more prescriptive regime and penalties are clearly aligned with broader international efforts towards substantive due diligence.
 

Timing and transitional arrangements

Current indications are that:

• The Committee stage is expected to conclude by 3 November 2026, with Royal Assent followed by secondary legislation, including transitional provisions.
• Given the scale of changes and the need for organisations to implement new measures, the earliest enforcement date is expected to be for statements relating to financial years commencing in 2027.

Critically, because reporting obligations relate to steps taken during the relevant financial year, organisations’ policies, procedures, risk assessments and training must be in place and operational during that period – not only at the point of publication.

Practical steps for organisations and public authorities

As a government-backed proposal, the Bill should be treated as a credible indicator of the direction of travel. Entities with UK-touching operations and public bodies likely to be in scope should use this lead time to prepare by taking certain steps.

• Reviewing current statements against the categories that will become mandatory (structure, supply chains, risk identification, policies, due diligence, training and effectiveness) and identifying gaps.
• Mapping operations and supply chains to identify modern slavery risks, including higher-risk geographies, sectors and business models.
• Strengthening policies and due diligence processes for suppliers, contractors and other business partners, including contractual requirements, onboarding checks and ongoing monitoring.
• Designing or expanding training programmes on modern slavery, tailored to different staff groups and, where appropriate, supply chain partners.
• Establishing KPIs and effectiveness measures to assess modern slavery risk mitigation efforts and support future reporting.
• Adjusting governance and board-level oversight, including processes for parent entities to gather information from subsidiaries and ensure sufficient assurance for director accuracy declarations.
• Implementing document retention and evidential audit trails to support the accuracy of director declarations, given the increased personal accountability created by the certification requirement.
• Preparing for more demanding public sector procurement requirements, with private sector entities positioning themselves to demonstrate effective modern slavery controls.
• Monitoring the Bill’s progress through Committee and any subsequent secondary legislation for confirmation of the public authority financial thresholds, central registry mechanics and transitional detail.

Conclusion

The proposed amendments represent a substantial strengthening of the UK’s modern slavery reporting regime: more prescriptive content, mandatory “comply or explain” disclosures, director‑level accuracy declarations, clearer publication deadlines, a new central registry mechanism, extension to public authorities and meaningful financial penalties.

Although formal enforcement will not apply until financial years commencing 2027 (with penalties likely to bite only once those statements are published, up to six months after year-end), organisations will need to implement enhanced policies, processes and controls well before then. In light of the wider international trends towards mandatory human rights due diligence and forced labour measures, these reforms should be seen as a step towards a more demanding regulatory environment in which modern slavery risks are treated as a core governance and compliance priority.

Client Alert 2026-157