SECR exemptions

The short answer — no blanket exemption

There is no general exemption from SECR. The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 20181 (SI 2018/1155), effective from 1 April 2019, provide three targeted statutory reliefs plus a group-level exemption for subsidiaries.

The three reliefs are the low energy user route (40,000 kWh or less of UK energy)1, the “seriously prejudicial” exemption1, and the “not practical to obtain” qualification1.

Each removes some or all of the detailed disclosure — none removes the obligation to say something.

Entities that are genuinely outside SECR — unquoted companies and LLPs below the two-of-three size thresholds3 — are not “exempt”; they are simply out of scope and need make no statement.

The distinction matters because the reliefs carry disclosure conditions and out-of-scope status does not.

The four relief routes at a glance

SI 2018/11551 structures the reliefs around a consistent principle: the annual report must account for what is missing.

The table above summarises each route; the sections below take them in turn.

All four routes presuppose the entity is in SECR scope in the first place — a quoted company under Companies Act 2006 section 3854, or a large unquoted company or LLP meeting the two-of-three test36.

Whether SECR applies at all is covered in Is SECR mandatory? and the thresholds guide.

Low energy user — the 40,000 kWh relief

An entity that consumed 40,000 kWh (40 MWh) or less of UK energy in the reporting period need not make the detailed SECR disclosures1. The 40 MWh test covers electricity, gas and transport fuel combined1 — not each source separately.

The relief is conditional on a statement.

The Directors’ Report (or Energy and Carbon Report for LLPs6) must state that the entity is a low energy user and that the energy and carbon information is omitted on that basis1.

An in-scope entity that simply says nothing is non-compliant with the Directors’ Report content requirements5.

The DBT Environmental Reporting Guidelines2 note that the threshold is designed for entities with genuinely minimal energy footprints.

Typical candidates are holding companies with no operational activity, small professional-services entities within large groups, and asset-management LLPs with limited physical operations.

The “seriously prejudicial” exemption

Directors may omit energy and carbon information if they consider that its disclosure would be seriously prejudicial to the interests of the company1.

Where the exemption is used, the report must state that the information is omitted and why1.

The judgement sits with the directors, but it is exceptional by design.

The DBT Environmental Reporting Guidelines2 frame it as a narrow carve-out for genuinely sensitive information — not a route for avoiding unwelcome numbers or preparation effort.

Because the omission statement is itself public9, a “seriously prejudicial” claim invites scrutiny.

Directors relying on it should document the specific prejudice identified and the board’s reasoning at the time of approval5.

The “not practical to obtain” qualification

Where it is not practical to obtain some or all of the energy and carbon information, the report must state what is omitted and why1.

This is a qualification on the disclosure duty, not an exemption from it — the entity discloses everything it practically can.

Typical cases include a mid-year acquisition with no historical energy records, landlord-controlled sites where consumption data is unavailable, or missing transport fuel records in a first reporting year2.

The DBT Guidelines2 expect entities to explain the gap and improve coverage in later periods.

The qualification is period-specific.

A gap that was credibly “not practical” to fill in year one becomes progressively harder to justify in years two and three, because the entity has had time to put measurement arrangements in place2.

The group / subsidiary exemption

Subsidiaries covered by a parent’s group SECR report need not report individually, provided they are included in the group’s energy and carbon disclosure1.

In practice, most UK groups disclose once, at parent level, covering all in-scope group members.

The exemption is conditional on actual coverage.

A subsidiary that meets the SECR thresholds3 in its own right and is not included in the parent’s group disclosure must report in its own Directors’ Report15.

Groups should document which entities the consolidated figures cover2.

The exemption changes where SECR content appears, not when accounts are filed.

Each subsidiary still files its own annual accounts on its own deadline under Companies Act 2006 section 4429 — see the SECR deadline guide for the filing mechanics.

UK energy only — the built-in relief for unquoted entities

Unquoted companies and LLPs report UK energy use and associated Scope 1 and 2 emissions only1.

Quoted companies report global Scope 1 and 2 emissions and energy use14.

This geographic boundary operates as a structural relief for unquoted entities with international operations — overseas consumption is outside the disclosure entirely1.

It also means an in-scope unquoted entity whose UK energy use is at or below 40,000 kWh can claim the low energy user relief even if its global footprint is large1.

The thresholds guide sets out the full disclosure content for each of the three entity types, and the compliance guide covers how to assemble the data.

What claiming a relief still requires

Every relief under SI 2018/11551 is a disclosure about a non-disclosure.

The practical requirements when claiming any of the three statutory reliefs:

• State the omission in the Directors' Report or Energy and Carbon Report — low energy user status, seriously prejudicial grounds, or impracticality, as applicable [1]
• Explain the basis — the low energy statement identifies the 40,000 kWh ground [1]; the other two reliefs require the report to say why the information is omitted [1]
• Keep the evidence — energy workings for the 40 MWh test, board reasoning for a seriously prejudicial claim, and the data-gap explanation for impracticality [2]
• File on time — the exemption statement travels with the annual accounts under Companies Act 2006 section 442 [9]; claiming a relief does not defer the filing

Directors approve the Directors’ Report as a whole5, so an unsupported exemption claim is a Directors’ Report compliance problem, not merely an environmental-reporting one.

The enforcement framework is covered in Is SECR mandatory?

Who is simply out of scope — no statement needed

Out-of-scope status is different from exemption.

An entity outside SECR scope has no SECR obligation and makes no statement1.

The main out-of-scope categories:

• Unquoted companies and LLPs below the two-of-three test — not exceeding two of: turnover £36m, balance sheet total £18m, 250 employees [3] [6]
• Entities that are not UK-incorporated companies or LLPs — SECR attaches to the Companies Act 2006 and LLP reporting frameworks [1] [5]
• Unquoted entities with respect to non-UK energy — overseas consumption sits outside the disclosure boundary [1]

Quoted companies cannot be out of scope on size grounds — Companies Act 2006 section 3854 puts every quoted company in scope regardless of size1.

The full qualification mechanics, including the two-year rule, are in the SECR thresholds guide.

Entities below the mandatory thresholds may still disclose voluntarily.

The DBT Environmental Reporting Guidelines2 encourage voluntary SECR-format disclosure, which large customers increasingly request through supply-chain questionnaires.

The 2025 size-uplift trap — becoming “medium-sized” is not a SECR exit

The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 20247 (SI 2024/1303) raised the general Companies Act size thresholds for financial years beginning on or after 6 April 2025 — “large” for accounts purposes now starts above £54 million turnover / £27 million balance sheet.

The SECR thresholds did not move.

Schedule 7 to SI 2008/410, which carries the SECR size test, was left unchanged8 — so SECR still applies on the £36m / £18m / 250 two-of-three basis38.

A company reclassified as medium-sized for accounts purposes has not thereby left SECR.

Companies in the £36–54 million turnover or £18–27 million balance-sheet band are the ones at risk of dropping the disclosure by accident8.

The full analysis, including a side-by-side table of the accounts and SECR thresholds, is in the SECR thresholds guide.

No exemption via UK SRS — SECR continues alongside

Adopting or preparing for UK SRS does not exempt anyone from SECR.

UK SRS S1 and S2 were published by DBT on 25 February 202610, and FCA CP26/5 (30 January 2026) proposes UK SRS S2 as mandatory for in-scope listed companies from financial years beginning 1 January 202711, with the FCA policy statement expected in autumn 202611.

SECR continues unchanged alongside that regime110.

Entities in scope of both will comply with both — see SECR and UK SRS for how the two regimes interact, and ESOS vs SECR for the parallel energy-audit regime with its own separate thresholds.

For the wider SECR cluster — thresholds, deadline, compliance steps and mandatoriness — start from the SECR section hub.

Frequently asked questions