UK businesses must prepare now ahead of corporate filing overhaul

Gary Gray, company secretarial services expert at Pinsent Masons, was commenting ahead of a sweeping reform aimed at modernising reporting. Under the changes, UK-registered companies and LLPs, including dormant entities, will be required to file their accounts using commercial software from 1 April 2027.

Gray said: “Although the deadline is not until April 2027, businesses are advised to begin preparing now. This may include reviewing their current filing processes, consulting with their accountants, and exploring compliant software options to ensure they are ready.”

The change marks the end of Companies House’s current web and paper filing options for accounts. The move is part of a broader digital transformation strategy to improve transparency, reduce fraud, and streamline regulatory compliance. Whether companies file their accounts directly through an agent or accountant, the use of approved software will be mandatory.

One of the most significant changes is the mandatory inclusion of profit and loss information for small companies and micro-entities. Previously, these businesses could file abridged accounts, omitting detailed financial performance data. However, from April 2027, the option to file abridged accounts will be removed, ensuring a more consistent and transparent financial picture across all company sizes.

Additionally, companies will now be required to prepare and file only one set of statutory accounts. This replaces the current system where different formats might be submitted to different government departments, aiming to reduce duplication and potential inconsistencies.

For dormant companies, while they can still file dormant accounts, they must now include a statement confirming their eligibility for audit exemption. This added layer of verification aims to prevent misuse of dormant status.

All accounts submitted via software must be tagged using iXBRL (Inline eXtensible Business Reporting Language), a global standard for digital financial reporting. iXBRL tagging enables automated analysis and improves data accuracy, making it easier for regulators and stakeholders to interpret financial information.

The reforms also address a long-standing “loophole” in the current legislation. “The loophole allows companies to gain more time to file account without incurring a late filing penalty by shortening the company’s accounting period end-date,” said Gray.

Under the new rules, companies will only be allowed to shorten their accounting period once every five years. This aligns the rule with that for extending the accounting period end date. Any request to shorten the period more than once within five years will require a valid business justification, such as aligning with a parent or subsidiary company’s financial year. This aligns the rules with those already in place for extending the accounting period. The other rules relating to changing the accounting period end date remain the same.

Accountants and software providers are expected to play a crucial role in supporting the transition. The government has indicated it will work closely with stakeholders to ensure a smooth rollout, including providing guidance and a list of approved software solutions well ahead of the 2027 deadline.