Prepare for changes to filing accounts – Daily Business Magazine

Forthcoming Companies House reforms are due to come into effect, says NICOLA CAMPBELL

Businesses should prepare for significant changes to how company accounts are prepared and filed as a series of reforms begin to take effect. Companies House changes, alongside new UK GAAP requirements for presenting financial statements that are due to come into force this year, mean many businesses are already entering a period of adjustment.

The newly announced reforms will require all companies to file accounts using commercial software in iXBRL format, with paper and web-based filing options being phased out.

Smaller companies and micro-entities will also be required to file profit and loss accounts, although they will be able to opt out of publishing this information on the public register.

Other measures include strengthened audit exemption statements, a requirement to file all components of accounts together and tighter restrictions on how often a company can shorten its accounting reference period.

The combination of changes means it is important for businesses to plan ahead.

These latest reforms represent a shift in how companies prepare and submit their accounts. Many businesses are already working through changes to UK GAAP, the standardised set of rules and procedures for compiling and presenting financial statements.

Now, the new Companies House changes represent another development that will need to be built into their processes over the next couple of years.

The reforms, introduced under the Economic Crime and Corporate Transparency Act 2023, are intended to improve transparency and modernise company reporting. Implementation has been delayed until April 2028, giving businesses additional time to prepare.

The extended timeline is helpful, but it is important that companies use this time to get ready. Moving to software-only filing will be a change for businesses that have traditionally relied on paper or web-based systems, particularly where third-party advisers are not involved in the submission process.

While smaller businesses will have the option to keep profit and loss information off the public register, they will still need to file it. Directors will have to actively opt out of disclosure to avoid giving away information from a commercially sensitive perspective. They remain responsible for ensuring their company meets its filing obligations.

Businesses that take early steps to review their systems, speak to advisers and understand the new requirements are likely to find the transition more straightforward.

We encourage companies to use the time available to assess whether their current processes and software are fit for purpose and to seek advice where needed, so they are fully prepared ahead of the changes coming into effect.”

Nicola Campbell, partner and head of accounts and business advisory services in Azets’ Glasgow office

For more information, visit www.azets.co.uk

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