In the latest announcement from Companies House, a change in the way in how UK companies will file the annual accounts. Whilst this has been on the agenda for a while now, finally we have some clarity on these changes and that they will take effect from April 2028.
These changes are all part of improving the transparency and quality of data on the register.
What does this mean?
One of the main changes will be for the requirement for micro and small companies to submit and profit and loss account with Companies House, whereas currently they can submit minimal information, this basically consists of a balance sheet and very limited notes. Unfortunately this is now coming to an end.
As from April 2028 Micro and small companies must file a profit and loss account, just as a larger company needs to do.
Fortunately small and micro companies will be able to opt out of having their profit and loss account on the public register.
Another change will also be to remove the option of filing abridged accounts for small companies. This will result in more transparency and consistent reporting for small companies.
Also from April 2028 Companies will only be able to file their accounts by using commercial software which will be in iXBRL format. This means that web and paper filing will no longer be available. This change will only be for filing of accounts, therefore other documents such as confirmation statements can continue to be filed through their web services.
My thoughts
From my perspective it makes sense not to have on the public record commercially sensitive information which all stakeholders will see. The restriction to having the profit and loss on the public record is a good move. Whilst I appreciate having the transparency has its benefits, it does raise questions as to how much visibility small businesses should be expected to make available compared to larger corporations.
The move to software only filing is no surprise, with the recent changes to the digitalisation of tax reporting this does make sense.