Millions of UK small companies will face significant changes to the way they file their annual accounts from April 2028, as Companies House presses ahead with reforms introduced under the Economic Crime and Corporate Transparency Act.
The most widely discussed change is that many small and micro companies will no longer be able to keep their profit and loss account private. Instead, it will need to be filed with Companies House alongside the balance sheet, making more financial information publicly available than is currently the case.
The reforms are designed to improve corporate transparency, tackle economic crime and give Companies House stronger powers to verify and scrutinise company information.
However, accountants say another change could have an equally significant impact on some businesses.
Alongside the additional disclosure requirements, Companies House is also moving to mandatory software-only filing. Paper accounts and many existing online filing routes will be withdrawn, with companies expected to submit accounts using compatible software or through an accountant.
For businesses that already use cloud accounting software, the transition is expected to be relatively straightforward. But directors who prepare and file their own accounts manually, or rely on older filing methods, may need to change how they meet their annual filing obligations.
Michael McCullion, Managing Director of Bright Ideas Accountancy, believes most businesses won’t need to change the way they keep their financial records.
“The good news is that most companies won’t need to change how they keep their books day to day. The biggest adjustment will be how accounts are filed with Companies House, particularly for directors who currently prepare and submit accounts themselves.”
The changes will affect a large proportion of UK companies. According to Companies House, there are well over five million companies on the register, with the vast majority qualifying as small or micro entities.
While businesses will still need to prepare a profit and loss account for tax purposes, many have not previously been required to file it publicly. From 2028, that position changes for many companies, reducing the amount of financial information that can remain private.
Christian Hickmott, Managing Director of Integro Accounting, says businesses should avoid focusing solely on the additional disclosure requirements.
“The headline about filing profit and loss accounts has attracted most of the attention, but for many small companies the bigger change is the move to software-only filing. Businesses that still prepare accounts manually or rely on older filing methods should start planning well before 2028.”
The new rules are expected to apply to accounting periods beginning on or after 1 April 2028, giving companies time to prepare before the first affected accounts are due.
Although 2028 may seem some way off, businesses that currently use spreadsheets, paper records or older filing processes may benefit from reviewing their systems well in advance. Those who already file through an accountant using modern accounting software are likely to notice far less disruption when the new regime comes into force.
The reforms form part of the government’s wider overhaul of Companies House, which also includes identity verification for directors and people with significant control, stronger enforcement powers and enhanced checks on information submitted to the register. Together, the measures are intended to improve confidence in the accuracy of UK company information while making it more difficult to misuse corporate structures for fraud or other criminal activity.
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