Small companies will need to file profit and loss accounts from 2028, creating new opportunities for professional bookkeepers.
The government has confirmed that it will proceed with the Companies House accounts reforms introduced through the Economic Crime and Corporate Transparency (ECCT) Act 2023, including measures that will significantly change how small businesses prepare and file their accounts.
The most significant changes for small companies and micro-entities are:
- Small companies and micro-entities will be required to file profit and loss accounts with Companies House, bringing them into line with other companies.
- All companies will be required to file their accounts with Companies House using commercial software.
The reforms were originally expected to come into force from April 2027 but have now been delayed until April 2028, giving businesses additional time to prepare.
ICB believes these changes could create significant opportunities for professional bookkeepers. Businesses that have previously prepared and filed their own accounts may increasingly seek professional support to ensure their financial information is accurate, compliant and capable of withstanding greater scrutiny.
The government says the reforms form part of wider efforts to improve corporate transparency and tackle economic crime. Following a pause in implementation last year, Companies House says it has undertaken extensive engagement with stakeholders, including professional bodies, before deciding to move forward with the changes.
To address concerns raised during consultation, the government has announced two concessions:
- Small companies and micro-entities will be able to opt out of having their profit and loss accounts published on the public register. Details of how this process will work have not yet been confirmed.
- The implementation date has been postponed from April 2027 to April 2028, providing businesses with one full accounting year plus nine months to prepare.
ICB Co-Founder and President Garry Carter said:
"Although government believes that enhanced accounts reporting will significantly reduce fraud, ICB remains sceptical about how effective the measure will be in practice. We continue to have concerns that the reforms risk becoming a snoopers' charter, making information available that could be used by competitors rather than providing meaningful protection against economic crime."
As members heard from HMRC's Head of Small Business and Personal Taxpayers, Kevin Hubbard, during a recent MLR Monday webinar, government is actively exploring ways to reduce the UK's tax gap, which is estimated at almost £40 billion and is believed to be heavily influenced by small business non-compliance.
ICB recognises that members and their clients may have questions about the practical implications of these reforms. We will continue to work closely with Companies House and HMRC and will provide guidance, communications and supporting materials as implementation progresses.
Further information:
• Read the written ministerial statement by Minister McDougall
• Read the news story on GOV.UK
• Visit our Changes to UK Company Law website