UK Companies House Reforms – Transforming iXBRL Tagging and Reporting

In February 2022, the UK Government proposed changes to financial reporting to expand the role and powers of its executive agency, Companies House. These reforms, designed to improve the quality of financial reporting in the UK, represent a significant shift in the UK’s financial reporting landscape. Let’s delve deeper into the UK Companies House reforms and how they have transformed iXBRL tagging and reporting. 

Digital Transformation for UK Companies House

In line with international best practices and to support the needs of the dynamic 21st century, the UK government published the White Paper with a series of proposed changes. According to these reforms, company accounts must be filed with the Companies House in a digital format using Inline Extensible Business Reporting Language (iXBRL). 

Currently, companies that comply with iXBRL in the UK do it according to the HMRC mandate. Moreover, they can submit the annual reports to HMRC within 12 months.

However, as per the new reforms, companies must submit annual reports to the Companies House in iXBRL format by a proposed timeline of Q1 2025. The deadline for reports in digital iXBRL format is 9 months.

The Effect of Reforms on Financial Reporting

The UK Government’s reforms related to financial information have significantly changed the financial reporting situation. Here’s how:

• The amendment to the Companies Act requires companies to prepare and submit a single set of accounts with the mandatory use of iXBRL. Companies will also be required to fully tag the information in their accounts. These tags are machine-readable, making the information easier to compare and check. 
• Small companies will now be required to file their profit and loss accounts and director’s reports. However, micro-entities required to file their profit and loss accounts are not mandated to prepare or file a director’s report. 
• Dormant companies must file an eligibility statement, providing an additional layer of compliance.

With these reforms, the Companies House aims to welcome a new era of digitisation and transparency in financial reporting.

Next Steps

With iXBRL tagging and digital reporting becoming the norm, companies must prepare to embrace these changes. Though this digital transition may present challenges, the benefits, like improved transparency and efficiency, cannot be ignored. If you are wondering how to transition to iXBRL reporting smoothly, DataTracks can be the right choice! 

DataTracks, the global leader in compliance reporting, is the right partner for businesses to move from a 12-month to a 9-month timeline of annual report submission. With an experience of 19 years of preparing over 400,000 compliance reports for more than 28,000 clients, the professionals at DataTracks can help companies file error-free compliance reports with Companies House. So what are you waiting for? Get in touch with us TODAY at +44 (20) 36088035 or email @ enquiry@datatracks.co.uk.

Frequently Asked Questions

1. What are the UK Companies House reforms?
In February 2022, the UK Government proposed changes to financial reporting to expand the role and powers of Companies House. These reforms aim to improve the quality of financial reporting in the UK.

2. What is the primary goal of these reforms?
The reforms aim to enhance the quality and transparency of financial reporting by mandating digital submissions using Inline Extensible Business Reporting Language (iXBRL).

3. When will companies need to comply with the new iXBRL filing requirements?
Companies must submit annual reports in iXBRL format to Companies House by Q1 2025. The deadline for these digital reports is 9 months from the end of the financial year.

4. How do these reforms affect the preparation of company accounts?
Companies are required to prepare and submit a single set of accounts using iXBRL, fully tagging the information to ensure it is machine-readable and easily comparable.

5. Are there specific changes for small companies and micro-entities?
Yes, small companies must now file their profit and loss accounts and director’s reports. Micro-entities are required to file profit and loss accounts but are not mandated to file a director’s report.

6. What new requirement is there for dormant companies?
Dormant companies must file an eligibility statement, adding an extra layer of compliance.

7. What are the benefits of these reforms for companies?
The reforms promote greater transparency and efficiency in financial reporting, making it easier to compare and verify information.

8. How can companies prepare for the transition to iXBRL reporting?
Companies should start preparing for digital reporting by understanding the requirements and setting up systems to handle iXBRL tagging and submissions.

9. How can DataTracks help with the transition to iXBRL reporting?
DataTracks, a global leader in compliance reporting, can assist companies in smoothly transitioning to iXBRL reporting, ensuring error-free compliance reports with Companies House. With 19 years of experience and over 400,000 compliance reports prepared, DataTracks is the right partner for your digital reporting needs.

10. How can I get in touch with DataTracks for assistance?
Contact DataTracks today at +44 (20) 36088035 or email enquiry@datatracks.co.uk for expert assistance with your compliance reporting.