The government has announced that it is changing the small company threshold for regulatory purposes in relation to staff numbers, which, it says, could remove 40,000 businesses from certain reporting regulations.
Currently businesses with less than 50 staff on average face much simpler regulatory requirements than those businesses who exceed this staff number.
The government’s recent decision applies from Monday 3 October and extends the definition of small business for regulatory purposes to those with up to 500 employees. This will apply to all new regulations under development, and to those under current and future review. It comes as part of a package aimed at stimulating growth for businesses by cutting red tape.
According to a statement from the Prime Minister’s office the move “will [release] businesses from future bureaucracy and the accompanying paperwork that is expensive and burdensome for all but the largest firms.”
However, unions are already warning that sparing firms from reporting on gender pay gaps and similar elements may, whilst cutting costs, also cloud accountability.
We have yet to see clarification of any impact on the thresholds that currently determine the reporting and audit obligations of small and medium-sized companies, plus the specific timing of any changes, though it is clear that the impact could be far reaching.