Small and micro companies will be required to file profit and loss accounts with Companies House from 2028 under government reforms designed to improve corporate transparency and strengthen the fight against economic crime.
The change forms part of the wider Economic Crime and Corporate Transparency Act reforms, which are transforming the role of Companies House and increasing scrutiny of company information. While implementation remains some time away, the announcement signals a significant change for millions of small businesses that have historically benefited from simplified reporting requirements.
What Has Changed?
The government has confirmed that qualifying small and micro companies will need to file profit and loss accounts with Companies House from 2028.
Currently, many smaller companies can prepare profit and loss information for accounting and tax purposes without placing that information on the public register. The new rules will increase the amount of financial information submitted to Companies House and available through company filings.
The reform sits alongside a wider package of changes intended to improve the quality and reliability of information held on the UK company register.
Which Businesses Will Be Affected?
The changes apply to limited companies.
The new requirement is expected to affect millions of owner-managed businesses across the UK.
Small companies and micro entities that currently benefit from reduced filing requirements are likely to see the greatest impact. Family businesses, personal service companies and other privately owned limited companies that have become accustomed to simplified reporting rules may need to adjust their reporting processes once the reforms take effect.
Sole traders and traditional partnerships operate under different reporting rules and are not affected in the same way.
What Could the Changes Mean for SMEs?
For many businesses, the immediate impact will be relatively limited because profit and loss accounts are already prepared as part of the annual accounts process.
The more significant change is that additional financial information will form part of Companies House filings. This may increase the importance of maintaining accurate bookkeeping records throughout the year and ensuring accounts are prepared correctly before submission.
Lenders, suppliers and other organisations that rely on Companies House information may also have access to a more detailed picture of a company’s financial position than is currently available.
Business groups have raised concerns that the reforms could increase compliance costs and place additional reporting obligations on smaller companies. Others argue that more complete financial information may improve confidence in the register and help reduce opportunities for fraud and abuse.
Part of a Wider Companies House Reform Programme
The profit and loss account requirement is only one element of a much larger programme of reform.
Companies House has already begun introducing new powers that allow it to challenge information, request supporting evidence and reject filings that appear inaccurate or inconsistent.
Director and People with Significant Control (PSC) identity verification requirements are also being rolled out, while the government continues to move towards a fully digital filing environment.
Taken together, the reforms represent the most significant overhaul of Companies House in decades.
What Should Businesses Do Now?
The new filing requirement is not expected to take effect until 2028, so there is no immediate action required.
However, businesses should use the transition period to review accounting processes, maintain accurate financial records and ensure company information remains up to date.
Directors should also keep track of wider Companies House reforms, particularly identity verification requirements and other compliance changes that are being introduced ahead of the 2028 reporting deadline.
While the profit and loss filing requirement has attracted attention, it is best viewed as part of a broader shift towards greater scrutiny of company information. For SMEs, good record keeping and strong compliance processes are likely to become increasingly important as the Companies House reform programme continues.
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 Limited - a Marketing & Content Agency for the Professional Services Sector.
