Small companies and micro entities will face significant changes to how they file their accounts from April 2028, following confirmation that the next phase of the Companies House reforms will go ahead.
The headline change is that small companies and micro entities will be required to file a profit and loss account with Companies House, alongside a number of other changes affecting Companies House annual accounts filings.
The changes will affect businesses that qualify as small companies or micro entities under the Companies Act thresholds, including many owner managed businesses across the UK.
Sam Butler, Partner at Hawsons, said: "The rules may not take effect until 2028, but now is the right time for businesses to review their filing processes and accounting software. Early preparation will make the transition much smoother when the changes arrive."
What are the Companies House changes in 2028?
Under reforms introduced through the Economic Crime and Corporate Transparency Act 2023, Companies House will introduce a number of new filing requirements.
These include:
- Small companies and micro entities being required to file a profit and loss account with Companies House.
- Mandatory electronic filing of accounts for all companies via approved software.
- The withdrawal of paper filing and Companies House's web based accounts filing service for annual accounts.
- The removal of abridged accounts.
- A strengthened eligibility statement for companies claiming audit exemption.
- A requirement to file all components of annual accounts and reports together.
- Restrictions on how often companies can shorten their accounting reference period.
These Companies House reforms form part of wider changes aimed at improving transparency, modernising company reporting and helping tackle economic crime.
These changes will apply to businesses that meet the relevant small company or micro entity criteria. A company is generally considered small if it meets at least two of the following conditions for two consecutive periods: turnover of £15 million or less, a balance sheet total of £7.5 million or less, and 50 employees or fewer.
How will the new Companies House accounts filing requirements affect small companies?
For many businesses, the most significant change is the requirement to file a profit and loss account with Companies House.
While these accounts will need to be submitted from April 2028, the Government has confirmed that small and micro companies will be able to opt out of having this information published on the public register. The mechanics of how this will work for small companies is yet to be confirmed by Companies House.
Companies House, HMRC and law enforcement agencies will still have access to the information where it is filed.
What should businesses do now?
Although the changes are still some time away, there are several practical steps businesses can take now:
- Review how your accounts are currently prepared and filed.
- Check whether your software or accountants software will support the new filing requirements.
- Consider whether the publication of profit and loss information could create commercial sensitivities for your business.
- Keep an eye on further guidance from Companies House, particularly around how the publication opt out process will work.
- Speak to your accountant about any changes that may be needed to your reporting processes.
Changes to Companies House annual accounts filing
All companies will need to file annual accounts using commercial software from April 2028, as Companies House's paper and web based filing systems for accounts submissions will be withdrawn.
Many businesses already use suitable software, but those relying on manual processes should review their systems well before the deadline.
Looking ahead
While the changes do not take effect until April 2028, businesses should use the time available to review their reporting processes, software and filing arrangements.
If you would like to discuss how these Companies House reforms could affect your business, our team would be happy to help.
