The Government has confirmed the timetable for its long-awaited overhaul of UK accounts filing rules and small businesses have just over 21 months to get ready.
From 1 April 2028, small companies and micro-entities will be required to file both a balance sheet and a profit and loss (P&L) account with Companies House.
Until now, many smaller businesses have been able to avoid disclosing P&L information, so the change represents a meaningful shift in transparency requirements.
An opt-out for smaller businesses
One of the more contentious aspects of the original proposals was the prospect of P&L accounts being visible to anyone searching the public register. Following sustained lobbying from business groups, that element has been scaled back.
Companies House has confirmed that small businesses will be able to opt out of having their accounts published on the public register, citing concerns about the commercial and privacy risks of disclosure for smaller firms.
The opt-out does not, however, remove the reporting obligation entirely. Filed information will still be accessible to HMRC, Companies House and law enforcement agencies for the purposes of identifying fraud or financial misconduct. Further guidance on the opt-out process is expected but has not yet been published.
An end to abridged accounts and other changes
The reforms will abolish the option to file abridged accounts, which many small businesses have long found burdensome.
The format requires formal shareholder approval, compresses key figures into broad categories and can complicate the overall filing process. Its removal is unlikely to be widely mourned.
From April 2028, all UK-registered companies will also be required to submit annual accounts digitally using commercial software compatible with the Inline eXtensible Business Reporting Language (iXBRL) format. This applies whether accounts are filed directly or through an agent or accountant.
The current web and paper-based filing options will close for accounts submissions at that point, though other Companies House services, such as confirmation statements and director updates, will continue to operate as normal.
The April 2028 date is already a year later than originally planned, partly to give businesses adequate time to adapt.
Additional changes include a requirement for all components of a set of accounts to be filed together rather than in stages, a tightened eligibility statement for companies claiming an audit exemption and, subject to secondary legislation, a cap on how many times a company can shorten its accounting reference period.
Act now, not later
Although the deadline to comply may feel far away, it equates to roughly one full accounting period and plus nine additional months.
For businesses that rely on agents or accountants to handle their filing, early conversations about software and the changes to their current filing processes are important.
If you would like guidance on how these reforms affect your business, get in touch with our team.
