Life just got a lot harder for small companies and micro-entities reporting their figures

The ever-helpful UK government has come up with another wheeze to make more admin for businesses already under the cosh.

From 2028, small companies and micro-entities will be required to file profit and loss accounts with Companies House.

It removes the option for companies to file abridged accounts.

This is despite many in the government being quoted as saying that this would not happen, as concerns grew about the ability of smaller concerns to cope with such reporting requirements.

It appears that the only concession won by the doubters was that there will be an option of not making the P&L account publicly available.

On this, the government said: "Allowing small companies and micro-entities to opt out of publishing their filed profit and loss accounts addresses concerns from the business and investment community around the privacy and commercial risks for smaller companies of disclosing this information."

However, just in case we thought we might be getting away with something, the mandarins added: "Where a company opts out of publishing its profit and loss accounts, Companies House, law enforcement and HMRC will still have access to help identify and tackle fraud, economic crime and tax evasion."

Other measures within the initiative include a requirement that all component parts of the filed accounts and reports all be filed together, and a reduction in the number of times a company can shorten its accounting reference period.

The rules were meant to come into effect next year, but have been pushed back to April 2028. This means all companies will have one full accounting year, plus 9 months (21 months) to get ready.

What's more, the government also announced that filings will have to be completed via commercial software and that paper-based filing systems will be closed. The format required for the software is the easily remembered Inline eXtensible Business Reporting Language (iXBRL). This is the format used by commercial software firms.

This applies to companies that file their own accounts and those who use third party agents or accountants to file their annual accounts.

This new initiative is all part of the accounts reforms measures set out in the Economic Crime and Corporate Transparency Act 2023 (ECCT 2023).

The idea is based upon these four main ambitions:

• improve the transparency, accuracy and reliability of data on the companies register;

• inform business decisions;

• modernise practices in line with other countries;

• tackle economic crime.

Industry figures are currently digesting what this actually means for companies and how much work it will add for business owners, but few have welcomed the news.

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