Companies House Filing: Understanding the Proposed Changes
ECCTA is set to modernise UK accounts filing. While the timeline is yet to be confirmed, DataTracks provides compliant solutions to help you prepare ahead of the mandate.
What May Be Changing?
The measures outlined in the Economic Crime and Corporate Transparency Act (ECCTA) aim to enhance transparency by making more financial information publicly available. Reforms across four main areas of accounts filing are currently under review, and these will be considered once the changes take effect:
- Software-only filing: It is intended that all accounts be submitted using commercial software. Paper and online filing may no longer be available.
- Small company filing options: Simplified requirements for small and micro-entity businesses are being considered, including the possible elimination of abridged accounts.
- Audit exemption statements: When seeking an audit exemption, enhanced director statements on the balance sheet may be required.
- Accounting reference periods: New limits on how frequently a corporation can shorten its accounting reference period are being considered.
Software-Only Filing
Once mandated, all accounts will need to be filed using commercial software. This change will allow more efficient and secure filings and is a critical step towards improving the quality of data on the register. Software-only filing will create a single, cost-effective, sustainable, and traceable way to file.
This applies to:
- Directors who file accounts themselves
- Companies that use third-party agents or accountants to file their annual accounts
Commercial filing software solutions are available for organisations looking to adopt a more streamlined and digital filing approach. Although the timeline for any mandatory transition is still under review, evaluating software options early can help support a smoother transition if and when changes are introduced.
Changes To Small Company Filing Options
Filing options for small and micro-entity companies are being streamlined. Companies will no longer be able to prepare and file ‘abridged’ accounts.
Micro-entities must file:
- Balance Sheet
- Profit and Loss Account
Small companies must file:
- Balance Sheet
- Profit and Loss Account
- Directors’ Report
- Auditor’s Report (unless exempt)
Claiming An Audit Exemption
Under the proposed reforms, any company claiming an audit exemption may be required to include an enhanced statement from their directors on the balance sheet. Once the changes take effect, directors are expected to:
- Specify which exemption is being claimed
- Confirm that the company qualifies for the exemption
Accounting Reference Periods
Under the proposed amendments, Companies House is considering limiting the number of times a firm can shorten its accounting reference period. Once the adjustments are implemented, a corporation may be required to present a business rationale if it desires to shorten the time more than once during a five-year period.
This suggested amendment is intended to prevent manipulation of filing deadlines.
Why Start Preparing Now?
Commercial Software Is Available
Most accounts may now be filed using software, and Companies House encourages businesses to consider making the transition as soon as possible. While the proposed reforms requiring mandatory software-only filing are still being reviewed, with no final decision yet published, shifting early may help your organisation prepare for any future mandates.
DataTracks offers compliant solutions for digital account filing, allowing you to start the process at your own pace.
Full Accounts Expertise
DataTracks supports organisations of all sizes: small, micro-entity, medium, and large. Whether you need to submit a balance sheet, profit and loss, directors' report, or auditors' report, DataTracks can help you prepare at your own pace. This means you are ready ahead of any future mandate. The proposed reforms for mandatory software-only filing are still under review, with no final decision yet. However, most account types can already be filed digitally. DataTracks can help you prepare - ensuring you are ready ahead of any future mandate.
Compliant iXBRL Tagging
DataTracks supports organisations of all sizes with compliant iXBRL tagging solutions. Our proprietary tagging engine is built for UK GAAP - including FRS 101, FRS 102, and FRS 105 as well as IFRS taxonomies, ensuring your accounts are accurate and accepted first time, whatever your size or reporting needs.
At Least 21 Months' Notice
DataTracks supports organisations of all sizes in staying ahead of regulatory change. The government has indicated that companies will be given at least 21 months to prepare once a final decision is announced. DataTracks will monitor any developments and guide you on the next steps, whatever your size or reporting requirements.
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Is the April 2027 deadline for Companies House digital filing still in place?
Not at this stage. The UK government has indicated that changes to accounts filing will not be introduced in April 2027. The reforms are still under review and a final decision is expected to be announced in due course. Once confirmed, companies are expected to receive at least 21 months’ notice to prepare before any changes take effect.
What does software-only filing mean for my company?
Once mandated, all accounts submitted to Companies House would need to be filed using commercial software. Paper filing and the current web-based filing route are suggested to be eliminated based on a revised timeframe that has yet to be announced. This is expected to apply to both directors who submit accounts themselves and businesses that hire accountants or third-party agents.
Can I still file abridged accounts for my small or micro-entity company?
Yes, current filing rules continue to apply until the new requirements are formally introduced. Once mandated, abridged accounts are proposed to no longer be accepted, based on a revised timeline that is yet to be announced. At that point, micro-entities would be expected to file a balance sheet and profit and loss account, while small companies would be expected to file a balance sheet, directors’ report, auditors’ report (unless exempt), and profit and loss account.
What accounts does a small company need to file under the new rules?
Small companies will be required to file:
- Balance Sheet
- Profit and Loss Account
- Directors’ Report
- Auditor’s Report (unless exempt)
What is the new requirement for companies claiming an audit exemption?
Once mandated, and subject to a revised timeline that has yet to be published, any company requesting an audit exemption is expected to provide an upgraded statement from its directors on its balance sheet. At that stage, directors are expected to indicate which exception is being sought and confirm that the company is eligible for it.
What is changing about accounting reference periods?
Under the proposed reforms, Companies House is considering limiting how frequently a company can shorten its accounting reference period. Once mandated and based on a revised timeline which is yet to be announced, a company may need to provide a business reason if it wishes to shorten the period more than once within a 5-year window. These changes were originally scheduled to come into effect in April 2027, but Companies House has confirmed that the reforms are still under review and implementation will be delayed.
Can I start using compliant software now, before the mandate?
Yes. While the timeline for any mandatory transition is still under review, organisations may choose to adopt software-based filing now. Companies House guidance notes that software filing offers several practical benefits, including:
- Faster and more secure delivery
- Automatic confirmation when a filing is accepted or rejected
- A reduced risk of late filing penalties
DataTracks provides compliant solutions and services that support accounts preparation and filing in line with UK requirements, whatever your size or reporting needs.
Why is the government making these changes?
The proposed changes form part of the Economic Crime and Corporate Transparency Act (ECCTA), which aims to improve transparency by making more financial information publicly available. Once mandated, software-only filing is intended to support a fully digital filing service, help prevent economic crime, and align the UK with international best practices.
How will I know when the changes are confirmed and when they take effect?
The government has indicated that companies will be given at least 21 months’ notice once a final decision has been reached on the revised timeline. When an official announcement is made, DataTracks will keep clients informed of any updates and provide guidance through the transition.
Get Ready Before the Mandate
Most accounts can already be filed digitally today. When the mandate is confirmed, DataTracks will be ready to support your transition.
