The government has confirmed that small and micro companies will be required to file profit and loss accounts with Companies House from 2028, under changes to the UK’s corporate reporting framework.
The measure forms part of the wider reforms being introduced under the Economic Crime and Corporate Transparency Act, which is expanding the powers of Companies House and increasing scrutiny of information held on the public register.
While the requirement to file profit and loss accounts has attracted attention in its own right, it represents just one element of a broader programme intended to improve the accuracy, reliability and transparency of company information in the UK.
What Has Been Announced?
Under the reforms, qualifying small and micro companies will be required to file profit and loss accounts with Companies House from 2028.
At present, many smaller businesses benefit from simplified filing requirements that allow them to place less financial information on the public register than larger companies. The new rules will increase the amount of information submitted to Companies House and form part of a wider move towards enhanced corporate transparency.
The changes are expected to affect millions of companies across the UK and represent one of the most significant reforms to small company reporting requirements in recent years.
How the Current Rules Work
The existing reporting regime allows eligible small and micro entities to take advantage of reduced disclosure requirements.
Although companies are required to prepare financial information for tax and accounting purposes, much of that information does not currently appear on the public Companies House register. In particular, many small companies are not required to file a profit and loss account as part of their publicly available accounts.
The rationale has historically been that smaller businesses face different compliance pressures from larger organisations and that a simplified reporting framework helps reduce administrative burdens while maintaining appropriate levels of corporate accountability.
From 2028, that position will change. Profit and loss information will become part of the filing requirements for small and micro companies, increasing the level of financial information available through Companies House.
Part of a Wider Companies House Reform Programme
The new filing requirements sit within a much broader package of reforms that is transforming the role of Companies House.
Historically, Companies House has operated primarily as a filing registry, receiving and publishing information submitted by companies. The Economic Crime and Corporate Transparency Act gives the registrar significantly greater powers to improve the quality of information on the register. Those powers include the ability to query information, require supporting evidence and reject documents that appear inaccurate, inconsistent or potentially misleading.
Alongside these changes, Companies House is introducing identity verification requirements for directors, people with significant control and others involved in company filings. The government is also moving towards a fully digital filing environment as part of its modernisation programme.
What Could the Changes Mean for Businesses?
For affected companies, the most immediate consequence will be the need to file additional financial information as part of their annual reporting obligations.
Businesses, advisers, lenders, suppliers and other stakeholders may have access to a more detailed picture of a company’s financial performance than is currently available through the register.
The reforms may also increase scrutiny of company filings more generally. As Companies House exercises its new powers, directors can expect greater emphasis on the accuracy and consistency of information submitted on behalf of their companies.
Some business groups have raised concerns about increased compliance obligations and the disclosure of information that has historically remained outside the public register. Others argue that more reliable and comprehensive company information will improve trust in the UK’s corporate framework and support efforts to combat fraud and economic crime.
What Happens Next?
The profit and loss account filing requirement is not expected to take effect until 2028, giving businesses and advisers time to prepare for the new regime.
Further Companies House reforms will continue to be rolled out in stages over the coming years, including identity verification requirements and additional measures designed to strengthen the integrity of the corporate register.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
