Small Company Thresholds:
- Turnover of no more than £15 million.
- Balance sheet total of no more than £7.5 million.
- 50 employees or less.
What’s changing?
- Companies House filings will need to be done using third party commercial software (in iXBRL format) – this has implications for those who still rely on WebFiling, paper filing, or manual year-end processes for dormant or small subsidiaries etc.
- All companies will need to file a profit & loss statement as well as a balance sheet. (although some can opt out of their P&L being filed publicly). They are expected to have the option to opt out of publication of that profit and loss information on the public register, but the detailed opt-out process has not yet been confirmed. The aim of this is to ensure records a company files with Companies House and HMRC align more closely.
- The option to file abridged accounts is being removed. This supports the drive for consistency in company information but may be a concern if financial information that is publicly available could be sensitive.
- Audit exemption declarations will need to be strengthened. The rules here can be complex – you’ll need to prepare an enhanced statement and be sure all the conditions are met.
- The number of times you can shorten your accounting period is being limited. A company will have to provide a business reason if they want to shorten the period more than once within 5 years. This means timing decisions should be considered carefully.
How would acting now benefit my business?
Many small business owners may not realise what the changes mean for their business – it is easy to assume your accountant will handle it. For others managing company secretarial and governance work as part of a wider role, capacity may also be limited.
For many companies, this will be easy to push down the priority list – but acting early makes transition smoother – and planning now can add real value to your business.
It will:
✔️ Improve accuracy and reliability of your financial data.
✔️ Help you make better informed business decisions.
✔️ Modernise processes to enhance efficiency.
✔️ Help protect your business from errors, inconsistencies and financial crime.
What steps should I be taking?
- Move to compliant software – you need to find the right one that best supports your business.
- Consider your eligibility for/desire to opt out of the public profit & loss filing register once the process is confirmed – Companies House and HMRC will still be able to see it.
- Check your accounting, tax and Companies House records are consistent, accurate and up to date.
- If you claim audit exemption, identify the specific exemption relied on and ensure you have supporting evidence for the enhanced directors’ statement.
- Speak with your accountant about tax planning, given the reducing flexibility around shortening accounting reference periods.
Are there other regulatory changes I need to think about?
Yes. The accounts reforms sit alongside a wider programme of Companies House and governance reform. Other changes include:
- director and person with significant control (PSC) verification checks are being phased in
- requirements for companies to maintain an appropriate registered office address and registered email address
- for companies applying the UK Corporate Governance Code, the Provision 29 material controls declaration framework
How Bridgehouse can help
Bridgehouse provides expert support to help limited companies:
- prepare for Companies House filing reforms and regulatory change, ensuring you realise the benefits for your business
- find the right software for filing accounts in a compliant format
- review entity management processes and statutory compliance arrangements
- keep company information, records and filings accurate, consistent and up to date.
- conduct Director verification checks
We do not provide tax or financial advice.
