Following months of delays and uncertainty, the Government has confirmed that small businesses in the UK will be required to file balance sheet and profit and loss (P&L) accounts with Companies House.
The new changes will impact small companies and micro-entities from 1 April 2028. However, following significant lobbying, the original plan to require full accounts details to be published on Companies House has been dropped.
Instead, these businesses will be able to opt out of publication on the public register, according to Companies House, which said that the change addressed “concerns from the business and investment community around the privacy and commercial risks for smaller companies of disclosing this information.”
At the moment, no details have been provided about the opt-out process, but the Government has promised to provide further guidance to companies that are affected.
Although the information won’t be available publicly to those who opt-out, it still will need to be reported and can be used by HMRC, Companies House and the polices and other crime agencies to identify fraud or financial misconduct.
The end of abridged accounts and other changes
The previous option of filing abridged accounts will be abolished. This type of accounting is disliked by many small businesses due to the requirement to obtain formal shareholder approval, aggregate vital figures into broad, ambiguous categories and the complications it can add to the process.
The new reforms will also require all UK-registered companies to file their annual accounts with Companies House using commercial software that utilises the Inline eXtensible Business Reporting Language (iXBRL) format.
This also applies to companies that use third-party agents or accountants to file their annual accounts and means that the existing web and paper-based filing systems will be closed for accounts filings in April 2028.
This reform comes a year later than previously planned to help businesses prepare for the change.
Whilst this affects the submission of annual accounts, other Companies House web filing services will remain in use including updates to director details and confirmation statements.
Beyond these major changes, the new reforms will also see component parts of the filed accounts and reports to all be filed in unison and a strengthened eligibility statement requirement for all companies claiming an audit exemption.
Finally, Companies House has confirmed that it will set a limit on the number of times a company can shorten its accounting reference period. This will require secondary legislation to be enacted, which is expected in the future, ahead of the reforms in 2028.
Time to prepare for the changes to accounts filing
Companies now have 21 months to prepare for these new changes to the accounting rules. While this may seem some way off, it is only equivalent to a full accounting period, plus an additional nine months.
If you need help preparing for these reforms in April 2028, please speak to our team for guidance.