CHANGES TO FILING SMALL COMPANY ACCOUNTS WITH COMPANIES HOUSE
Companies House is changing Small Companies Filing Options! Since 22nd September 2022 the Economic Crime & Corporate Transparency Bill has been making its way through parliament. The changes set out for the bill will improve transparency by making more information available to the public. This will help tackle economic crime and provide more information for enforcement agencies. As part of this package of reform we are streamlining the accounts filing options available to small and micro companies.
Why Profit & Loss requirements are changing.
Public disclosure is a requirement for all companies. In return companies have the protection of limited liability. During our consultation phase, the accountancy profession, credit sector law enforcement bodies and some individuals suggested that the minimal disclosure that small companies are allowed to make does not give a level of transparency that is sufficient to get limited liability protection.
A small or micro company that prepares abridged or full accounts for its members does not have to file a copy of its Profits & Loss accounts and/or the Directors’ Report with Companies House. This minimal level of disclosure has the potential to appeal to fraudsters wishing to present a false image of the company. Improving transparency and having better quality information will make it easier to spot fraud when it happens and will also help to support business growth.
What the changes mean for small and micro companies
To simplify our framework, we will be reducing our account filing options to just two: micro entities and small companies. Under the new measures the option for abridged accounts will be removed. Having fewer options will help to avoid confusion and reduce costly mistakes.
Under this new framework all small companies, including micro entities, will be required to file their Profit and Loss accounts. Having key information such as profit & loss available on the public register will help creditors and consumers make better informed decisions. It will also improve the value of the information on the register for users.
The details and format of the Profit & Loss accounts filing will be set out in the second legislation. This is being developed in consultation with business and accountancy groups. We will keep you updated on its development and time scales.