News

The Government has confirmed further changes to the way companies file their accounts with Companies House.

From 1 April 2028, small companies and micro-entities will need to file profit and loss accounts with Companies House.  The changes form part of wider reforms under the Economic Crime and Corporate Transparency Act 2023, which are designed to improve the accuracy and transparency of information held on the companies register.

The reforms were originally expected to come into force from April 2027, but implementation has now been delayed by one year.  This gives companies more time to prepare, with one full accounting year plus nine months before the changes take effect.

What is changing?

At present, many smaller companies file reduced information at Companies House.  For some businesses, this means key trading information, such as profit and loss details, is not filed on the public register.

From April 2028, small companies and micro-entities will be required to file profit and loss accounts with Companies House, bringing them more in line with larger companies.

However, following concerns from businesses and professional bodies, the Government has confirmed small companies and micro-entities will be able to opt out of publishing their profit and loss accounts on the public register.

This means the information will still need to be filed with Companies House, but businesses should have the option to prevent it from being publicly available.  Companies House, HM Revenue and Customs (HMRC) and law enforcement agencies will still have access to the information to help tackle fraud, economic crime and tax evasion.

Further details on how the opt out process will work are expected in due course.

Why does this matter?

For many small businesses, the most sensitive part of the accounts is the profit and loss account.  It shows information about turnover, costs and profit, which some business owners may prefer not to make public for commercial reasons.

The option to opt out of publication should offer some reassurance.  However, the filing requirement itself still represents a significant change.

Businesses will need to make sure their accounts are prepared in the correct format, filed on time and supported by accurate bookkeeping records.  Directors should also understand that even where the profit and loss account is not published publicly, it will still be available to Companies House, HMRC and law enforcement.

Software only filing

Another important change is the move to Software only accounts filing.

From April 2028, all UK registered companies will need to file their accounts using commercial software in iXBRL (Inline eXtensible Business Reporting Language) format.  Companies House web and paper-based accounts filing routes will close from this date.

This will apply to companies that file their own accounts, as well as those that use an accountant or agent.

For businesses still using manual records, spreadsheets or paper-based processes, this is a key point to plan for.  Accounting records will need to be accurate, up to date and suitable for digital filing.  Leaving this until the filing deadline is likely to create unnecessary pressure.

Additional changes will include:

The reforms will also remove the option to file abridged accounts.

Abridged accounts have previously allowed some small companies to prepare and file accounts with less detail, where shareholders agreed.  From April 2028, this option will no longer be available.

Companies claiming audit exemption will also need to provide a strengthened eligibility statement, confirming they meet the relevant conditions.

In addition, Companies House will require the component parts of the accounts and reports to be filed together, rather than separately or in an incomplete way.

There will also be changes to limit the number of times a company can shorten its accounting reference period.

What should businesses do now?

Although April 2028 may feel some time away, businesses should start preparing now.

The first step is to understand whether your company falls within the small companies or micro-entities regime and what filing requirements will apply to you.

You should also review how your bookkeeping and accounts are currently prepared.  If you still rely on paper records, spreadsheets or manual processes, this is a good time to consider whether your systems will be suitable for Software only filing.

Businesses should also make sure their registered email address at Companies House is correct and monitored.  Companies House has confirmed it will contact companies by their registered email address with information about the changes and available guidance.

For directors, the changes are also a useful reminder to review internal financial reporting.  Accurate, regular bookkeeping will make year end accounts preparation smoother and reduce the risk of problems when the new rules take effect.

How we can help

These changes will affect many small companies and micro-entities.  While the option to opt out of public publication should help protect commercially sensitive information, businesses will still need to file more detailed accounts with Companies House.

Our team is here to support you with bookkeeping, accounts preparation, software, tax compliance and practical advice to help you prepare with confidence.

If you would like to understand how these Companies House changes may affect your business, or you need support reviewing your current accounts process, please get in touch with our team on 01228 711888.  We will be happy to help.

Speak to our team