ISO & Compliance Blog

Modern Slavery Act Compliance for Supply Chains: What’s Changing in 2026

For a decade, the Modern Slavery Act 2015 had a reputation problem: everyone agreed it mattered, but almost nothing happened if you ignored it. That’s about to change. A new Bill working through Parliament is set to turn a largely symbolic reporting duty into a regime with real financial consequences — and the ripple effects will reach far beyond the large companies it directly targets.

Modern Slavery Act compliance is shifting from a box-ticking exercise to something with real teeth. Here’s what’s actually required today, what’s changing, and what it means whether you’re a large business or a small supplier caught in someone else’s compliance chain.

In this article:
– What the Modern Slavery Act currently requires
– Why enforcement has been so weak — until now
– The Immigration and Asylum Bill 2026: what’s changing
– Why smaller suppliers can’t ignore this
– Practical steps for compliance

What the Modern Slavery Act Currently Requires

Section 54 of the Act is the core obligation businesses need to know about. In the UK, companies are subject to the reporting obligations set out in section 54 of the Modern Slavery Act 2015, and the largest commercial organisations — those with a turnover of £36 million or more — must produce and publish an annual modern slavery and human trafficking statement. That statement should set out the steps taken in the last financial year by an organisation to ensure that slavery and human trafficking are not taking place in its business or supply chain.

The threshold and scope are precisely defined: it applies to a body corporate or partnership that carries on a business, or part of a business, in the UK, that supplies goods or services and has an annual turnover of £36 million or more.

Why Enforcement Has Been So Weak — Until Now

This is the part that’s about to change dramatically. For a decade, the Act has been criticised as a paper tiger. In practice, the MSA has little bite: there are no mandatory requirements on statement content and no penalty for non-compliance. The requirements were vague enough that a business could technically comply while doing very little of substance.

The Home Office did try to raise standards through guidance rather than legislation. An updated Transparency in Supply Chains guidance introduced a more structured approach, categorising expected disclosures into two tiers, where Level 2 statements are more detailed, and the level classification is intended to reflect an organisation’s maturity in relation to managing modern slavery. But guidance isn’t law, and without penalties attached, take-up was inconsistent.

The Immigration and Asylum Bill 2026: What’s Changing

This is where things get serious. On 30 June 2026, the UK Government introduced proposed amendments to section 54 via the Immigration and Asylum Bill, and if enacted, these provisions would implement significant changes to the UK’s modern slavery reporting regime, including making the content of slavery and human trafficking statements more prescriptive, requiring disclosures on risk assessment, policies, due diligence processes, training and effectiveness, and introducing a new financial penalties regime for non-compliance.

The headline change is financial exposure that didn’t exist before. The Bill prescribes mandatory statement content, introduces a hard six month publication deadline, extends the regime to public authorities, and creates a financial penalty of up to 1% of turnover or £1 million (whichever is higher).

This isn’t happening in isolation. These reforms arrive as global enforcement intensifies, with Australia introducing criminal liability and the US threatening tariffs over forced labour concerns — the UK is catching up to a much tougher international standard, not inventing one from scratch.

It’s also worth noting the reform is politically likely to proceed. Given the government’s parliamentary majority, such reform seems a realistic prospect, though organisations should monitor the Bill’s progress and use this window to assess whether their modern slavery policies, procedures, governance and reporting controls are ready for this shift.

Why Smaller Suppliers Can’t Ignore This

If your turnover sits below £36 million, the direct legal statement requirement doesn’t apply to you — but treating that as the end of the story is a mistake many SMEs make. Any business that supplies into a large organisation’s supply chain will increasingly face Modern Slavery due diligence questionnaires, document requests and contractual obligations from those larger customers, regardless of their own turnover.

The reality on the ground is blunt: procurement teams in SMEs and mid-market businesses are discovering that “our turnover is below the threshold” is not, in practice, a sufficient answer when a major customer asks what you have done to check your suppliers. As larger companies face tougher penalties and more prescriptive disclosure requirements themselves, they’ll inevitably push more due diligence pressure down onto their supply chains to protect their own statements.

The consequences of getting this wrong aren’t limited to in-scope companies either. Getting this wrong carries real consequences: reputational damage if suppliers are found to have exploitative practices, contractual liability with customers who require compliance warranties, and — for in-scope organisations — the possibility of Home Office scrutiny and public naming in enforcement communications.

Practical Steps for Compliance

Whether you’re directly in scope or a supplier feeling the indirect pressure, here’s where to focus:

If your turnover is at or approaching £36 million:
– Start treating your statement as a substantive compliance document, not a formality — the days of a thin, generic statement are numbered.
– Build in the disclosures the new guidance already expects: risk assessment, due diligence processes, training, and how you measure effectiveness.
– Get board-level sign-off processes in order now, since the Bill’s proposed six-month publication deadline leaves little room for delay.
– Budget for the possibility of a 1% of turnover penalty becoming real — this changes the internal case for investing properly in compliance.

If you’re a smaller supplier below the threshold:
– Expect due diligence questionnaires from larger customers to become more frequent and more detailed, not less.
– Keep a simple record of your own supply chain — who you source from, and any obvious risk areas (sectors, regions, subcontracting layers).
– Consider a short, voluntary statement even if not legally required — it demonstrates good faith to customers who ask.
– Review your contracts for modern slavery warranties or compliance clauses your customers may already be inserting.

For everyone:
– Keep an eye on the Immigration and Asylum Bill’s progress through Parliament — the reporting deadline, content requirements, and penalty regime could all be locked in within the next year.
– Don’t wait for the law to force your hand. Businesses that build genuine due diligence processes now will be far better placed than those scrambling to retrofit compliance once penalties apply.

The Bottom Line

The Modern Slavery Act is shifting from a box-ticking exercise to a regime with real financial teeth — and that shift will be felt well beyond the large companies directly in scope. If you supply into bigger businesses, or you’re approaching the £36 million threshold yourself, now is the time to get ahead of it rather than wait for a customer questionnaire or a change in the law to force the issue.

If you’d like support reviewing your modern slavery compliance, building a proper due diligence process, or preparing for the incoming reforms, CAW Consultancy helps UK businesses turn regulatory pressure into practical, manageable action.

Get in touch with CAW Consultancy today for a free, no-obligation consultation — visit https://www.cawconsultancy.co.uk to find out how we can help you stay compliant and confident.