The way companies file their financial accounts is soon set to undergo a significant change.
UK registered companies currently have a degree of flexibility when filing their annual accounts, with options to submit accounts directly through Companies House online service, by post, or by an accountant or using accounting software.
However, as part of the reforms introduced by the Economic Crime and Corporate Transparency Act 2023, Companies House is moving towards a fully digitalised filing regime, aiming to improve transparency and enhance the quality of financial information on the register.
These changes are due to come into effect from the 1st of April 2028, giving companies 21 months to prepare.
From that date, all annual accounts must be filed using commercial software in inline extensible Business Reporting Language (iXBRL) format. Companies House will no longer be accepting accounts filed through its web-based service or on paper, although these filing routes will remain available for certain other statutory and non-account filings, including confirmation statements and updates to director details.
As part of wider efforts to modernise the filing process, software-only accounts are being introduced to make company filings more efficient and secure. The change aims to establish a single, digital method for submitting annual accounts, helping businesses reduce costs, improve traceability and support more sustainable reporting practices.
Reforms for small company filing
The Economic Crime and Corporate Transparency Act 2023 also introduces a number of important changes for small and micro-entity companies.
Most notably, small companies will no longer be permitted to prepare and file abridged accounts. Abridged accounts are a simplified form of submission for small companies’ annual accounts. They contain fewer balance sheet disclosures and enable businesses to keep certain financial information private from the public view. Under the new reforms, small companies will be required to file a profit and loss account as part of their annual accounts.
While these profit and loss accounts will need to be provided to Companies House, small companies and micro entities will have the option to opt out of this information being published on the public register (although the process for exercising this opt-out is yet to be confirmed).. Where a company opts out of publishing its profit and loss accounts, Companies House, law enforcement and HMRC will still have access to help identify and tackle fraud, economic crime and tax evasion
Changes to accounting reference periods
The legislation also introduces further restrictions on a company’s ability to shorten its accounting reference period. Companies wishing to shorten their accounting reference period more than once within a five-year period will be required to provide a business reason for doing so.
The change is designed to reduce the potential misuse of accounting periods and strengthen the integrity of the corporate reporting framework.
What’s next?
To give companies more time to prepare, this package of accounts reforms will now come into effect from April 2028, rather than the originally scheduled April 2027. Businesses should review their current accounting and filing process now, to ensure they are prepared for these upcoming changes and understanding any additional reporting obligations that may be applicable to them.
Find out more about the upcoming changes and our corporate team on our website.
