The government has now confirmed that the changes will go ahead from April 2028, giving companies and accountants more time to prepare.
For most small businesses, this won’t require immediate action today, but it is worth understanding what’s coming so there are no surprises later.
What’s changing?
1. All companies will need to file accounts using software
The days of paper filing and basic online filing services are gradually coming to an end.
Companies House is moving towards a fully digital filing process, with accounts being submitted through approved software.
For many businesses already using cloud accounting systems, this may not feel like a major change. For those still relying on manual processes, it could mean reviewing how accounts are prepared and submitted.
2. Small companies and micro-entities will need to file a Profit & Loss account
This is the change that has generated the most discussion.
Currently, many small companies can file abbreviated information at Companies House.
Under the new rules, small companies and micro-entities will be required to submit a profit and loss account as part of their annual accounts filing.
The good news is that the government has listened to concerns about commercial sensitivity.
Companies will be able to opt out of having their profit and loss account published on the public register, although the information will still be available to Companies House and HMRC.
3. Abridged accounts are disappearing
The option to file abridged accounts will be removed as part of the reforms.
The aim is to create greater consistency and transparency across company filings while helping tackle fraud and economic crime.
Why is this happening?
These reforms form part of the Economic Crime and Corporate Transparency Act.
The government’s objective is to improve the quality of information held at Companies House, increase transparency and help combat fraud and economic crime.
While there has been criticism about increased administration and compliance costs, the reforms are now moving forward with a revised implementation date.
What should business owners do now?
There’s no need to panic.
April 2028 is still some distance away.
However, now is a good time to:
- Ensure your bookkeeping is up to date
- Consider moving towards cloud accounting software if you haven’t already
- Keep accurate profit and loss records throughout the year
- Speak to your accountant about how the changes may affect your company
Good bookkeeping has never been about compliance alone.
When your numbers are organised and up to date, changes like these become far less daunting.
Businesses that already have clear financial records and digital systems in place are likely to find the transition much smoother than those trying to reconstruct their accounts at year end.
Like any voyage, it’s easier to adjust course gradually than wait until you’re heading straight into the rocks.
If you’d like to understand how these changes could affect your business, I’d be happy to help you chart the course.
