Changes to Small Company Accounts: What You Need to Know - No U-turn Yet 🚦

Small companies: get ready to file fuller accounts from April 2027, but keep an eye on possible changes ahead.

There’s been a lot of noise lately about whether new Companies House rules for small businesses will actually go ahead. While these changes are still scheduled to take effect from 1 April 2027, there’s now credible talk that the government may reconsider. Nothing has changed yet in law, but there is time for a U-turn before that date. Here's what’s planned, what the rumours say, and how you should prepare in the meantime.

Digital-only filing via software

From April 2027, all companies must file their accounts using commercial software. Paper submissions or web-uploaded PDFs will no longer be accepted for accounts (though other filings like annual confirmation statements are not affected).

What to do: Make sure your bookkeeping and accounts software is ready. If you're still stumbling along with paper or PDF accounts, now is the time to work with a modern accountant. Not only will your filings be compliant with the new legislation, but a good accountant will also provide strategic tax advice, suggestions to improve your business systems, and plenty more.

More detail for small company accounts

At present, many small companies file ‘abridged’ or restricted accounts. From April 2027, this will change:

• Micro-entities will still file a balance sheet BUT also a profit & loss account

• Small companies will need to file:

  • A full profit and loss account

  • A directors’ report

  • An auditor’s report, unless exempt

Abridged accounts will no longer be allowed, and these additional documents will become part of the public record at Companies House.

Audit exemption statement becomes mandatory

If you’re claiming audit exemption, you’ll need to include a clear statement on the balance sheet confirming the exemption and that your company qualifies. This applies to both micro and small entities.

If you’re a client, don’t worry we’ll be sure this disclosure is included within your accounts.

Changes to how often you can shorten your year-end

Right now, you can shorten your accounting reference date as often as you like. Under the new rules, you’ll be limited to once every five years unless there’s a good business reason.

What’s the latest on the possible U-turn?

In early July, AccountingWEB and The Guardian both reported that government sources were considering dropping or delaying the new rules. However, a close ally of the Business Secretary said the reforms might not align with plans to reduce red tape for small businesses.

However:

• No legislation has been passed to reverse the changes

• Companies House guidance has not changed

• The April 2027 date still stands…for now

So while there is now a window of possibility that things might change, it hasn’t happened yet. For now, it’s safest to plan as though the reforms will go ahead.

What this means for small business owners

This is a real shift towards more transparency and tighter controls. The key actions for small companies are:

Talk to your accountant, or get one!
Start planning for compliant accounts production and understand what will need to change.

Understand what you’ll need to publish
Profit and loss figures, directors’ reports and audit information will all become public.

Get audit exemption wording right
You’ll (your accountant will) need to state clearly on the balance sheet how and why you're exempt.

Be cautious with changing year-ends
Future changes to your accounting period will need justification if done more than once in five years.

Our take

This is a rare situation where the law has already changed, but the political power behind it might be shifting. There is still plenty of time for the government to amend or delay these changes, and we’ll be keeping a close eye on it for you.

But for now, businesses should assume that the rules are coming in 2027. Getting prepared won’t go to waste, even if the timeline shifts.

Need help?

We use a 'best in class' accounts production software and so are prepared for these changes, and we will be speaking with our clients who manage Limited Companies to ensure they are confident in what needs to be filed.

If you’re unsure what this means for your business, feel free to get in touch with us. Better to plan now and adjust later than be caught out close to the deadline.

Author: Nick Bromley FCCA, founder of Nick Bromley Accountancy Ltd. We help small businesses stay compliant, confident and financially healthy.