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Profit and loss accounts to be filed with Companies House from April 2028
On 9 June, Companies House confirmed that from April 2028 small companies and micro-entities will be required to file profit and loss accounts with Companies House, but with the option of not making them publicly available on the register.
The requirement for small and micro-entities to file profit and loss accounts is part of a wider package of accounts reforms. These reforms were brought in through The Economic Crime and Corporate Transparency Act (‘the Act’), which became law in October 2023. Among other things, the Act provides the Registrar of Companies with more powers to query, reject, remove and annotate information on the public register. The objective of these additional powers is to ensure corporate transparency.
The Act itself is a large piece of legislation which will require around 50 statutory instruments to fully implement it. Consequently, it is being implemented in phases and the government has anticipated that all of the Act’s provisions will be fully implemented by 2028 (although timelines are always to be viewed as being tentative).
Opinions on whether small and micro-entities should be required to file profit and loss accounts are divided. Those in favour argue that making profit and loss accounts publicly available is the price to pay for the benefit of limited liability that is afforded to companies. Those against argue that filing profit and loss accounts risks commercially sensitive information being made publicly available which could be detrimental to small and micro-entities.
In the summer of 2025, Companies House sent out an email confirming that small and micro-entities would be required to deliver profit and loss accounts from April 2027 and that accounts filings would need to be in iXBRL format. The inevitable uproar that ensued forced the government to pause these proposals, citing various reasons including:
- concerns raised about commercially sensitive information being placed in the public domain
- the need to ensure an appropriate balance between corporate transparency and business privacy
- unnecessary burdens for businesses which go against the spirit of the government’s pledge to reduce administrative burdens by some 25% during the current Parliament.
Consequently, the government put these reforms on hold while it engaged in further stakeholder consultation. In pausing these reforms, the government also confirmed that it would provide companies with at least 21 months’ notice of any further changes.
A less onerous regime?
Unsurprisingly, the filing of profit and loss accounts for small and micro-entities came back to the surface on 9 June 2026. Companies House confirmed this will be effective from April 2028 and those accounts must be filed using commercial software in iXBRL format.
In addition, Companies House web and paper-based filing routes will be closed for accounts filings.
The government has made two changes from the original reforms.
As has been widely reported, small and micro-entities will be able to opt out of having their profit and loss accounts published on the public register. This decision was made in response to concerns from business and the investment community around the commercial risks for small companies of having this information publicly available, as well as the potential impact on investment opportunities.
There are currently no details on how the opt-out regime will work and I would anticipate that many small and micro-entities are planning take advantage of it. The government has stated that companies who wish to enjoy the benefits of publication, such as improved access to finance and enhanced transparency, can still do so.
Where the small or micro-entity opts out of publishing their profit and loss accounts, Companies House, law enforcement and HMRC will still have access to that information. In terms of HMRC, it has always had access to the full accounts in any event so there is no change where that is concerned.
The Economic Crime and Corporate Transparency Act includes a requirement for a small company to file a directors’ report. In a change to the original reforms, this requirement has now been dropped as part of the Modernising of Corporate Reporting programme. The government announced that the requirement for any company to produce a directors’ report as part of its annual report and accounts will eventually be removed.
The directors’ report for a small company adds little, if any, weight to the financial statements so I suspect this will not be missed when it is eventually repealed. Micro-entities preparing financial statements under the micro-entities’ regime (ie FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime) have not had to include a directors’ report since 2016, so there is no change where those entities are concerned.
The Act also contains a provision for the removal of the option to abridge Companies Act accounts. The announcement on 9 June 2026 confirms that this will go ahead and there will no longer be an option for companies to prepare abridged accounts.
This was always going to be the case where the Act was concerned and, in some respects, is probably a welcome compromise given the government is allowing small and micro-entities to opt out of having their profit and loss accounts made publicly available.
The option to prepare abridged accounts does require unanimous shareholder consent each year. This could prove arduous for some small companies given that many businesses which were medium-sized are now reclassified as small following the increase in company (and group) size thresholds for accounting years commencing on or after 6 April 2025.
Shortening an accounting period
Currently, a company can shorten its accounting period as often as it wishes. This ‘loophole’ has often been used as a way of obtaining additional time to file the company’s accounts where the original filing deadline may not be met for whatever reason.
The reforms are expected to align the shortening of an accounting period with that of lengthening one – ie once every five years. It is likely that special permission would need to be obtained to shorten an accounting period more than once within a five-year period once this provision in the Act is enacted.
Audit exemption statement
There will be a strengthened eligibility statement for all companies that claim an audit exemption. This statement will identify the exemption being taken and will confirm that the company is eligible to apply it.
Summary
To help address various concerns, the government is introducing two changes summarised as below.
- opt out of profit and loss publication: small and micro-entities will be able to opt out of having their profit and loss accounts published on the public register. Details of how smaller companies can opt out of publication will be confirmed in due course
- postponed timings: Implementation of these reforms will now come into effect from April 2028, rather than April 2027. This will provide companies with additional time to prepare with one full accounting year, plus nine months (21 months) to get ready.
Conclusion
The requirement to file profit and loss accounts at Companies House is an issue that has opinions divided. However, for those that are against having profit and loss accounts available for public inspection, the latest announcement may provide some comfort.
Accounts reform is the third (and final) major package of measures being introduced by the Act and more details on this issue will be published as we become aware of them.
More information