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Reporting obligations removed for 40,000 businesses

The UK government has announced future plans to remove reporting requirements for businesses with fewer than 500 employees.

Under the previous legislation, only businesses with fewer than 50 employees were free of reporting obligations. The new changes will affect more than 40,000 businesses across the UK. 

Depending on the impact of the changes, the government may look to increase the threshold in the future to include companies with fewer than 1,000 employees.

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The government announcement of the policy framed the changes as a positive for businesses, who will be "freed from future bureaucracy and the accompanying paperwork that is expensive and burdensome for all but the largest firms". 

Although the TUC expressed concern the changes would affect how companies reported on their gender or ethnicity pay gap data, a spokesman for the Government Equalities Office said: "The law has not changed. The threshold for employers reporting gender pay gap data remains at 250 or more employees."

Yet concerns remain over whether businesses would look to cut staff or divide up their company in other ways in order to come under the 500-employee threshold.

Posting on Twitter, John Carruthers said: "De-regulation of companies with fewer than 500 employees. What could go wrong? Any company just over 500 might look to shed staff, so job losses. Where does health and safety fit into this? So many questions and concerns."

Martin Tiplady, CEO of Chameleon People Solutions, said measures should be put in place to stop businesses taking advantage of the new rules. 

He told HR magazine: "Any reduction in the amount of red tape for small businesses is welcome especially when one considers the amount of time such measures takes currently. But I do worry that the new definition of small business – can 500 employees really be regarded as small? – means that there will be some abuses in what most would regard as significantly sized businesses.

"I do believe that some form of protocol is needed to not let these businesses off a hook so easily. Nothing heavy or complex, just something that keeps their discipline in the areas that matter."

This article was updated on 7 October.