Software-only filing and more disclosures – Major changes for small companies
If you run a limited company, it is important to be aware of some major changes coming to the way company accounts are filed.
These changes are part of new legislation, the Economic Crime and Corporate Transparency Act (the Act), and they will affect small companies and micro-entities across the country.
Some of the reforms are already in motion, and others will come into force over the next couple of years.
Accounts filing will go fully digital by April 2027
From 1 April 2027, all company accounts will need to be filed using commercial filing software.
Companies House will be closing its current web-based and paper filing routes for accounts submissions.
This means:
- You will no longer be able to submit accounts manually or via the Companies House website.
- All accounts will need to be filed digitally, using compatible software.
Most businesses already file this way, so in many cases this won’t require a major change.
However, if you currently file your own accounts manually or online without specialist software, you will need to plan ahead.
Simpler accounts options are being phased out
From April 2027, the option to file abridged or filleted accounts will be removed.
This is part of a drive to improve transparency and make more company information publicly available.
Here is a summary of what will be required going forward:
- Micro-entities will need to file a full balance sheet and profit and loss account
- Small companies must file their balance sheet, profit and loss account, directors’ report and (if required) auditor’s report
Although micro-entities won’t need to prepare a directors’ report, they will no longer be able to exclude the profit and loss account from the version filed at Companies House.
While some business owners may be concerned about commercially sensitive information being made public, these changes are part of a wider effort to tackle economic crime and improve corporate accountability.
More detail required in the accounts
From January 2026, small companies using FRS 102 Section 1A will also be required to include more financial disclosures in their accounts. These cover areas like:
- Revenue recognition
- Leasing
- Provisions and contingencies
- Tax (both current and deferred)
- Related party transactions
Although these are primarily accounting standards changes (separate from the legislation), they will increase the amount of information included in the financial statements, especially for small entities.
Audit exemption – Additional declaration needed
The rules on audit exemption are also changing. While more small companies will be able to claim exemption (due to an increase in the thresholds), directors will now need to:
- State which exemption they are claiming, and;
- Confirm that the company qualifies
This declaration must appear on the face of the balance sheet and is in addition to the existing requirement to confirm that members have not requested an audit.
Changing your accounting year? One time only (almost)
If your company wants to shorten its accounting reference period, this can now generally only be done once every five years.
If you need to shorten it again within that period, you will have to provide a business reason, and Companies House will decide whether to grant permission.
These changes might seem a way off, but it is worth getting sorted now and to make sure that you will be ready when the new rules kick in.
Not sure what these changes mean for your business and need help picking the right software? Speak to us today for professional support.
