Firm News | 24.06.26

Important Changes to Companies House Accounts Filing Rules

Important changes to Companies House accounts filing rules: what businesses need to know

The Government has announced important changes to the way companies file their annual accounts with Companies House under the Economic Crime and Corporate Transparency Act 2023 (“ECCTA”).

These reforms are designed to improve transparency and help tackle economic crime.  Following feedback from businesses and professional advisers, the Government has confirmed a change to the timetable and at the time of writing the changes will now take effect from April 2028, rather than April 2027.  This extension is intended to give companies more time to prepare.

Overview of the key changes

Once the reforms come into force, companies will need to comply with a number of new requirements, including:

• Small companies and micro-entities will need to file profit and loss accounts with Companies House.
• All companies will be required to file accounts using approved commercial software.
• Accounts will need to be submitted in a standard digital format known as “iXBRL”.
• The option to file abridged accounts will be removed.
• Companies claiming an audit exemption will need to provide a clearer statement confirming they are eligible.
• All parts of a company’s accounts and supporting reports will need to be filed together.
• Restrictions will be introduced on how often companies can shorten their accounting period.

These changes are intended to make the information on the public register more consistent and reliable.

New start date: April 2028

Although these reforms were previously expected to begin in April 2027, the Government has now confirmed a one-year delay to April 2028.

This additional time is intended to help companies, accountants and software providers prepare for the new system.  In practice, most businesses will have at least one full accounting year, plus additional time, to adapt.

Profit and loss accounts for smaller companies

One of the most significant changes is the requirement for small companies and micro-entities to file profit and loss information.

However, in response to concerns about commercial sensitivity, the Government has confirmed an important safeguard: while profit and loss accounts must be filed with Companies House, smaller companies will be able to opt out of having this information published publicly.

This means that, in some cases, financial performance information may not appear on the public register.  Full details of how this opt-out will work will be set out in future guidance the Government produces.

It is important to note that even where information is not published publicly, it will still be available to Companies House, HMRC and law enforcement agencies.

Companies that prefer greater transparency will still be able to allow publication, which may assist with securing finance or building trust with stakeholders.

Mandatory software filing

From April 2028, all companies will be required to file their accounts using commercial software.  Paper filing and Companies House web-based accounts filing services will no longer be available.

Accounts will need to be submitted in iXBRL format, which is a structured digital reporting format already used for tax purposes.

Companies will still be able to use accountants or filing agents, provided they use compliant software.

A list of approved software providers is expected to be made available on GOV.UK to assist businesses in choosing suitable systems.

Removal of abridged accounts

The option to file abridged accounts will be removed for all companies.

This is intended to ensure that Companies House holds more complete and consistent financial information, and to reduce the risk of misuse of simplified reporting options.

Audit exemption: stronger requirements

Where companies claim an exemption from audit, directors will need to provide a clearer confirmation that the company is entitled to rely on that exemption.

This is intended to improve the accuracy of filings and support enforcement where incorrect exemptions are claimed.

Directors should take care to ensure that eligibility for audit exemption is properly reviewed before filing.

Accounting period changes

The Government also intends to limit how often companies can shorten their accounting reference period.

In general terms, where a company wishes to shorten its accounting period more than once in a five-year period, it will need to provide a business reason.

This is intended to reduce unnecessary changes and improve consistency in financial reporting.

Directors’ reports

Although earlier versions of the legislation referred to new requirements for Directors’ Reports for small companies, the Government has now confirmed that this requirement will be removed as part of wider reforms to modernise corporate reporting.

What businesses need to know

Although the changes do not take effect until April 2028, it would be sensible for companies to begin preparing in advance.

In particular, businesses may wish to:

• Check whether their current accounting systems can produce iXBRL-compliant accounts;
• Speak with their accountants or software providers about future filing requirements.
• Review their position regarding audit exemptions;
• Consider whether publication of profit and loss information may have any commercial impact; and
• Keep an eye out for further guidance from Companies House, particularly regarding the opt-out process.

How we can be of assistance

These reforms represent a significant change in the way UK companies report financial information.  While the additional time to prepare is welcome, early planning will help ensure a smooth transition when the new requirements take effect.

This article does not constitute legal advice and should not be relied on as such.  If you would like specific legal advice, or require any assistance, then please get in touch on 020 4549 2460 or 01380 733300 | commercial@wansbroughs.com