Small business owners have received some welcome news about forthcoming Companies House filing reforms.
From 1 April 2028, small companies and micro-entities will have to file a profit and loss account with Companies House. However, following widespread concerns about privacy and commercial sensitivity from UK SMEs and their advocates, they will be able to opt out of having that information published on the public register.
This represents an important change in direction and some common sense being applied. The original reforms raised concerns that competitors, customers and suppliers could gain access to commercially sensitive information about smaller businesses. Companies House says the revised approach responds to feedback from the business and investment community while preserving access to information needed to tackle fraud and economic crime.
It is important to distinguish filing from publication. Eligible companies will still have to submit their profit and loss account. If they choose the publication opt-out, Companies House, HMRC and law-enforcement bodies will retain access; the information will simply not be available for public inspection. Companies House has not yet confirmed how businesses will exercise the opt-out.
The reforms have also been postponed by 12 months and will now take effect from April 2028 rather than April 2027. From that date, companies will have to file their annual accounts using commercial software. Existing web and paper filing routes will close, and the option to prepare and file abridged accounts will be removed. The postponement gives businesses and their advisers more time to prepare.
The change strikes a more sensible balance between corporate transparency and the legitimate privacy concerns of owner-managed businesses. Small companies should nevertheless review their accounting software and year-end processes well before the deadline.
Further details are available from Companies House and the ICAEW. As the practical opt-out procedure is still being developed, businesses should watch for further guidance before the rules take effect.
Written by Sean Hackemann, founder of Specialist Accounting Solutions. Sean works with owner-managed businesses that need outsourced finance support, management accounts, cash flow forecasting and senior finance input without hiring a full-time finance director.
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