The measures set out in the Economic Crime and Corporate Transparency Act will improve transparency by making more financial information available to the public.
Changes to accounts filing will not be introduced in April 2027. The reforms are still under review and a final decision will be announced shortly. Companies will receive at least 21 months’ notice to prepare.
Filing accounts by software only
In the future, all accounts will need to be filed using commercial software.
This change will allow more efficient and secure filings for companies, and will be a critical step towards improving the quality of the data on the register. Software-only accounts filing will create a single, cost-effective, sustainable and traceable way to file.
The legislation lays the foundation for Companies House to require companies to file accounts in a digital format. To comply with these changes, all companies will need to find a suitable software product before web-based and paper filing options are no longer available.
This applies to directors who file accounts themselves, and companies who use third party agents or accountants to file their annual accounts.
Most companies can make the change now as commercial software is already available. There are many software providers who offer a range of accounting packages to prepare and file accounts.
Changes to small company filing options
Micro-entities will be required to file a copy of their balance sheet and profit and loss account.
Small companies will be required to file a copy of balance sheet, directors’ report, auditor’s report (unless exempt) and profit and loss account.
Companies will no longer be able to prepare and file ‘abridged’ accounts.
Claiming an audit exemption
Any company claiming an audit exemption will need to give an enhanced statement from their directors on the balance sheet.
Directors will need to specify which exemption is being claimed, and confirm that the company qualifies for the exemption.
Accounting reference periods
A company will have to provide a business reason if they want to shorten the period more than once within 5 years.
