Small companies: preparing for accounts reforms 

Companies House reforms to the company accounts rules will come into force on April 2028 – a year later than anticipated - impacting small companies and micro-entities.

The reforms implement measures under the wide-ranging Economic Crime and Corporate Transparency (ECCT) Act 2023 to improve transparency and accuracy on the public register. It will change how companies report information and set out what is required when filing annual accounts at Companies House.

While companies within scope have nearly two years to prepare – there is just one full accounting year to go. It is important for businesses to start factoring in the potential time and costs involved in reviewing and adapting their existing procedures, to ensure they will be able to comply with the new rules.

Companies House has set out how it will implement the measures, giving companies significant time to understand what is required.

Who will the new measures impact?

The upcoming reforms apply to small companies (those with a turnover of up to £10.2m; up to £5.1m on its balance sheet; no more than 50 employees); and micro-entities (turnover of up to £632,000; £316,000 or less on its balance sheet; up to 10 employees)

Key points

· All companies will be required to file profit and loss accounts in the same way as larger companies already do

· Accounts will have to filed at Companies House via commercial software (providers are listed here)

· Web and paper routes for filing will close from 1 April 2028

· There will be no option to file abridged accounts (simplified financial statements)

Exceptions

In a recent change to the implementation process, small companies and micro-entities will now be able to opt out of having their profit and loss accounts published on the public register. Further details on how this will work in practice will follow.

Importantly, opting out will not prevent the authorities from having access where it suspects fraud, financial crime and tax evasion; and anyone providing false or misleading information to Companies House could be prosecuted.

Small companies, micro entities and their advisers are urged to keep alert to further guidance on complying with the new rules.

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