Modern Slavery Statement Requirements: What UK SMEs Must Know

The modern slavery statement requirements under the UK's Modern Slavery Act 2015 catch many SMEs off guard. Not because the law applies to them directly -- for most, it does not -- but because their customers act as if it does. If you supply goods or services to a large UK business, you have almost certainly been asked whether you have a modern slavery statement. The answer matters more than you might expect.

Here is what the law actually requires, who it applies to, what a compliant statement must contain, and why businesses well below the threshold are increasingly producing one anyway.

The Modern Slavery Act 2015, Section 54

Section 54 of the Modern Slavery Act 2015 requires commercial organisations that carry on business in the UK and have an annual turnover of £36 million or more to publish a slavery and human trafficking statement for each financial year.

The statement must describe the steps the organisation has taken during the financial year to ensure that slavery and human trafficking are not taking place in any part of its own business or its supply chains. If the organisation has taken no such steps, the statement must say so. There is no exemption for inaction -- only for transparency.

The £36 million threshold refers to total turnover. For groups of companies, the relevant figure is the combined turnover of the group, not individual subsidiaries. A subsidiary with £5 million in revenue is in scope if its parent group exceeds £36 million. This catches more businesses than the headline number suggests.

The six content areas

Section 54(5) specifies six areas that a statement "may" include. In practice, the government registry and most procurement frameworks treat these as expected content. A statement that omits them looks incomplete.

1. Organisation structure, business, and supply chains. Describe what your business does, where it operates, and who your suppliers are. Sector, geography, and workforce composition all matter here.

2. Policies in relation to slavery and human trafficking. State whether you have a standalone modern slavery policy, or whether modern slavery is covered within broader policies (code of conduct, supplier code, ethical sourcing policy). Specify what those policies require.

3. Due diligence processes. Explain how you assess and manage modern slavery risk. This covers supplier audits, risk assessments, contractual clauses, and any third-party tools or databases you use to screen suppliers.

4. Risk assessment and management. Identify the parts of your business and supply chains where the risk of modern slavery is highest. Geography, sector, and workforce type are typical risk indicators. A UK office-based firm sourcing IT equipment from Southeast Asia has a different risk profile from a food manufacturer using UK-based seasonal labour.

5. Key performance indicators (KPIs). Quantify your efforts. Common KPIs include: percentage of suppliers assessed, number of supplier audits completed, training completion rates, and number of reported concerns investigated.

6. Training. Describe what training your staff receive on modern slavery, particularly procurement teams, HR, and anyone who manages supplier relationships or recruitment.

A statement published on the government registry that covers all six areas, signed by a director, and updated annually will satisfy most buyers' due diligence requirements.

The government registry

Since March 2021, the UK government has operated a modern slavery statement registry at modern-slavery-statement-registry.service.gov.uk. Organisations meeting the £36 million threshold are expected to publish their statements on this registry, though registration is not yet legally mandatory (legislation to mandate it has been delayed).

The registry is publicly searchable. Buyers, investors, and journalists use it to check whether businesses have filed statements and what those statements contain. An absent or outdated entry is visible to anyone who looks.

For SMEs below the threshold, the registry is not relevant for filing. But it is useful for research -- you can see how your larger customers structure their own statements, which gives you a template for what they expect from suppliers.

Group turnover rules

The £36 million threshold applies to "total turnover" as defined by Section 54(3). For corporate groups, this means the consolidated turnover of the ultimate parent and all subsidiaries. The Home Office's transparency in supply chains guidance confirms that subsidiaries are in scope if the group exceeds the threshold, even if each subsidiary individually falls below it.

This has a practical consequence: if your business is acquired by or merges with a larger group, you may suddenly be in scope even though your own revenue has not changed. Conversely, if you are a standalone company with £10 million turnover, the Act does not apply to you directly.

"Directly" is the key word.

Why SMEs below the threshold still face modern slavery questions

The Act creates a direct obligation on businesses above £36 million. But those businesses have their own supply chain obligations under Section 54(5)(c) -- due diligence processes. Demonstrating due diligence means assessing suppliers. Assessing suppliers means asking questions. The questions flow downstream regardless of the supplier's size.

In practice, modern slavery is now a standard section in virtually every supplier sustainability questionnaire. A typical buyer questionnaire includes three to five modern slavery questions:

• Do you have a modern slavery statement or policy?
• How do you assess modern slavery risk in your supply chain?
• Have you identified any instances of modern slavery in the past 12 months?
• Do you provide modern slavery training to relevant staff?
• Do your supplier contracts include modern slavery clauses?

If you answer "no" to all five, you are flagged as a higher-risk supplier. That does not mean you lose the contract immediately, but it affects your score on the buyer's supplier assessment matrix. Over time, buyers consolidate toward suppliers who can evidence compliance.

What a proportionate response looks like for an SME

You do not need to produce a 20-page statement with a dedicated compliance team. A proportionate approach for a UK SME with turnover below £36 million includes:

A one-page modern slavery policy. State that your business is committed to preventing modern slavery, describe the steps you take (even if basic), and name the person responsible. Review it annually.

A supplier clause. Add a modern slavery clause to your standard terms and conditions or supplier agreements. It does not need to be elaborate: "The Supplier shall comply with the Modern Slavery Act 2015 and shall not engage in, or knowingly support, any form of slavery, servitude, forced or compulsory labour, or human trafficking."

Basic risk awareness. Identify which of your suppliers operate in higher-risk sectors or geographies. The Global Slavery Index and the Home Office's country guidance can help. You do not need formal audits for every supplier -- a risk-based approach that focuses scrutiny on the highest-risk relationships is both proportionate and defensible.

Staff training. Brief your procurement team and anyone who manages recruitment on the indicators of modern slavery. The government's guidance for businesses includes a useful checklist. A 30-minute annual briefing is sufficient for most SMEs.

Record-keeping. Document what you have done. A supplier risk assessment spreadsheet, training attendance records, and a log of any concerns raised and how they were handled give you evidence to reference when questionnaires arrive.

How to handle the questionnaire question

When a customer's ESG questionnaire asks "Do you have a modern slavery statement?", there are three honest answers depending on your situation:

If your turnover exceeds £36 million: "Yes -- our statement is published on the government registry at [link] and covers financial year 20XX/XX." Attach the statement.

If your turnover is below £36 million but you have a policy: "We are below the Modern Slavery Act reporting threshold (£36M turnover) and are not legally required to publish a formal statement. However, we have a modern slavery policy that covers [brief summary]. See attached."

If you have nothing in place yet: "We are below the reporting threshold and do not currently have a formal modern slavery statement. We are developing a modern slavery policy and expect to have it in place by [date]." Then follow through.

The second answer is significantly better than the third. The gap between them -- drafting a one-page policy, adding a supplier clause, running a basic risk assessment -- is a few hours of work. For a detailed walkthrough of how to respond to supplier ESG questionnaires, including evidence requirements, see the step-by-step guide.

Upcoming changes to watch

The UK government has signalled its intention to strengthen Section 54 enforcement. Proposed amendments -- which were included in the draft Modern Slavery (Amendment) Bill but have not yet been enacted as of early 2026 -- would make filing on the government registry mandatory, introduce civil penalties for non-compliance, and require statements to cover specific mandatory topics rather than using the current "may include" language.

If these changes pass, the £36 million threshold would remain but the consequences of non-compliance would sharpen considerably. Businesses that already have a solid statement and supporting policies will be well-positioned. Those that have been publishing vague, one-paragraph statements will need to improve.

For SMEs below the threshold, the direct regulatory impact remains minimal. But the indirect impact -- through customer questionnaires driven by strengthened enforcement on larger businesses -- will grow.

---

AnswerVault stores your modern slavery policy, risk assessments, and training records alongside all your other ESG evidence, so you can pull the right answers instantly when questionnaires arrive. Try AnswerVault free to get started.

---

Sources

1. Modern Slavery Act 2015, Section 54 -- legislation.gov.uk/ukpga/2015/30/section/54. Establishes the transparency in supply chains obligation.
2. Home Office Transparency in Supply Chains Guidance -- gov.uk/government/publications/transparency-in-supply-chains-a-practical-guide. Practical guidance including the group turnover rules.
3. Modern Slavery Statement Registry -- modern-slavery-statement-registry.service.gov.uk. The government's public registry for statements filed under Section 54.
4. Global Slavery Index -- walkfree.org/global-slavery-index. Country-level estimates of modern slavery prevalence, useful for supplier risk assessments.