From 1^st April 2027, all companies will have to file their annual accounts using software. New reporting requirements will also be introduced. This is yet another financial blow to business owners, following the announcement of plans to close both Companies House and HMRC’s free filing services earlier this year.

What Changes are Coming?

All companies will be required to submit their annual accounts using commercial software (such as Xero and Capium). As such, both the web and paper-based filing systems used by Companies House will be closed. Whether you submit your accounts yourself, or through an accountant, you must use accounting software from 1^st April 2027.

Furthermore, profit and loss accounts will become mandatory for small and micro-entity companies from this date. Previously, an exemption was in place that allowed the smallest businesses to submit simplified accounts (known as abridged accounts) where the main document was the balance sheet, rather than the profit and loss. The removal of abridged accounts will lead to further preparation time, costing these businesses more to submit their accounts.

It is important to note that no changes are currently planned to change the services for confirmation submissions and director information updates. However, directors and people with significant control (PSCs) are now required to verify their identity with Companies House.

Why are these Changes Happening?

These filing changes are being introduced as part of the Economic Crime and Corporate Transparency Act 2023. The use of software is intended to reduce errors and formatting issues, as they will be prepared to government specifications. Online filing is also more secure than paper filing as there is less risk of accounts being tampered with or being lost in the post.

Having profit and loss information available for all companies on the Companies House register is believed to improve access to credit for small businesses and micro-entities, as this will be available for lenders to assess. It is also expected to prevent money laundering as these businesses will have to disclose more information.

What do I Need to Do Before the Changes Take Place?

Before these changes occur, you will need to select the accounting software you wish to use going forward. There are many options to choose from so it can feel quite overwhelming. GOV.UK offer a tool to help you find software that works best for the type of accounts you need to submit. The software will be able to generate reports, which include the profit and loss if you have not had to create one yourself before.

Are There Any Further Changes Planned?

Companies House are planning to implement further changes after April 2027 but have not announced any details yet. You can follow our blog to keep up to date with future updates.

I’m Worried About the Changes – Can You Help?

At WKM, we understand that changes to filing can be stressful, particularly for small businesses. If you are unsure about using software for your accounts, please do not hesitate to contact us for advice. You can also find further information about software and cloud accounting on our website.