If you run a small business, there’s an important change to Companies House filing requirements on the horizon.
From 1 April 2028, most small companies and micro-entities will need to submit a profit and loss (P&L) account to Companies House as part of their annual accounts.
The good news? Following significant feedback from the accountancy profession and business community, your profit and loss account won’t automatically become public. Instead, businesses will be able to choose whether that information is published on the Companies House register.
Although the changes are still nearly two years away, now is the time to understand what they mean and start preparing.
Why are the rules changing?
The changes form part of the Economic Crime and Corporate Transparency Act 2023 (ECCTA), one of the biggest reforms to Companies House in over 180 years.
The aim is to improve the accuracy of company information, tackle economic crime and give Companies House greater oversight of UK businesses.
Until now, many small companies have been able to file abbreviated information, meaning only a balance sheet appeared on the public register. From April 2028, Companies House will require more detailed financial information to be submitted.
What will change?
From 1 April 2028, small companies and micro-entities will need to:
- File a full profit and loss account alongside their balance sheet
- Submit accounts digitally using commercial software in iXBRL format
- Stop using abridged accounts, as this option will no longer be available
One significant change from the original proposals is that businesses will be able to opt out of making their profit and loss account publicly available. Companies House, HMRC and relevant law enforcement agencies will still have access to the information, but your competitors and the wider public will not unless you choose to make it visible.
The Government is expected to provide further guidance on exactly how the opt-out process will work.
Should you keep your profit and loss account private?
There isn’t a one-size-fits-all answer.
For many owner-managed businesses, keeping financial information private will be the obvious choice.
You may wish to avoid sharing:
- Turnover
- Gross profit margins
- Directors’ remuneration
- Overall profitability
This can be particularly important in competitive markets or where your accounts closely reflect your personal income.
However, transparency can also have advantages.
Some businesses choose to publish more financial information because it can:
- Demonstrate financial strength
- Increase confidence with lenders and suppliers
- Support investment or acquisition discussions
- Help when bidding for larger contracts
The right decision will depend on your business, your sector and your future plans. Businesses will remain able to share their financial information with stakeholders directly, even if they opt out of making the information public at Companies House.
More than just a filing change
While much of the attention has focused on the profit and loss account, there are wider changes that businesses shouldn’t overlook.
The move to software-only filing means paper accounts and Companies House’s online filing service will disappear for annual accounts.
If you’re already working with your accountant digitally, the transition is likely to be straightforward. Businesses relying on older processes may need more preparation.
The removal of abridged accounts will also require changes to the way some companies prepare and file their year-end accounts.
What should businesses do now?
Although the new rules don’t take effect until April 2028, there is plenty of time to prepare.
Over the next 21 months, business owners should:
- Understand whether the new filing rules apply to their company
- Review whether digital filing processes are already in place
- Consider whether publishing profit and loss information would benefit or disadvantage the business
- Discuss the options with their accountant well before the first filing deadline
Leaving these decisions until accounts are due is likely to create unnecessary pressure.
How Wilson Partners can help
For most businesses, these changes won’t alter how your accounts are prepared. They will change how they’re filed and require you to make an informed decision about what information appears on the public register.
We’ll be working closely with our clients over the coming months to explain the new requirements, ensure filing processes are ready and help each business decide whether opting out of public disclosure is the right approach.
If you’d like to understand how these changes could affect your business, speak to your usual Wilson Partners contact or get in touch with our team.
The earlier you start planning, the easier the transition will be.
