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Authors
Under section 441 of the Companies Act 2006 (CA 2006), all UK registered companies have a duty to file annual accounts with Companies House, even if their company is dormant or not trading. Currently, companies can file their accounts online using Companies House’s various web-based systems for filing accounts or send paper accounts by post.
From 1 April 2027, Companies House has confirmed that their web and paper-based systems for account filings (including the dormant accounts web service) will no longer be available. All companies will need to file their annual accounts using commercial software from that date forward.
As part of the wider reforms under The Economic Crime and Corporate Transparency Act 2023 (ECCTA), the shift to software filing is part of Companies House’s wider agenda to improve the accuracy and quality of data held on its register. Companies House comments that software-only filing of accounts “will create a single, cost-effective, sustainable and traceable way to file”, leading to reduced errors and formatting issues, and ultimately ensuring that economic crime can be detected and prevented more effectively.
This article sets out next steps for companies impacted by the changes to the filing of company accounts, as well as other changes under ECCTA which will come into force on the same date relating to small and micro-entity company accounts, claiming audit exemptions and accounting reference dates.
Software-only filing of accounts
Who will this affect?
All companies filing accounts on or after 1 April 2027 will need to file these using commercial software. This will apply whether you are a director filing your own accounts or whether a third party (for example, an accountant or agent), files on your behalf.
How do I prepare?
If you already file your accounts using commercial software, then you do not need to take any further action.
However, if you currently use one of Companies House’s web-based systems or file your accounts by post, you will need to find a suitable software product to use before the web-based and paper-filing options are no longer available. Companies House has published guidance on GOV.UK to help companies make the switch to software filing and provide support throughout the transition.
Most companies can make the change now as there are many commercial software providers who offer a range of accounting packages to prepare and file accounts. You can find a list of these here: Find software for filing company accounts – GOV.UK
If a third party files your accounts, we recommend that you speak with them to ensure that they are using a suitable software product ahead of when the changes are implemented.
Small company filing options
Companies House has also announced that the filing options for small and micro-entity company accounts will also be streamlined from 1 April 2027, including the following changes:
- profit and loss accounts will be required for small and micro-entity companies, in addition to the balance sheet. Small companies will also be required to file the directors’ report and auditor’s report (unless exempt);
- removing the ability to prepare and file ‘abridged’ accounts;
- an enhanced statement on the balance sheet regarding audit exemptions (unless exempt) will be required, including which exemption is being claimed and a confirmation that the company qualifies for the exemption
Making more financial information available to the public is expected to allow for transparency and accountability and enhance conditions for accessing credit, including trade credit lending, as well as attract those who wish to do business with a company. The risk of deliberate misuse of minimal disclosure options to hide money laundering and other fraudulent activity is also expected to be reduced.
In addition, the filing obligations for small companies and micro-entities are currently within the same section of the CA 2006, however, under ECCTA, the CA 2006 will divide the requirements into two sections (443A and 444), which aims to make the filing requirements easier for companies to understand.
Accounting reference periods
At present, you can change your accounting reference date (ARD) by shortening an accounting reference period as often as you like. However, Companies House will be restricting the number of times ARDs can be shortened, with companies required to provide a business reason if they want to shorten the period more than once within 5 years. This is similar to the restrictions already in place for extending ARDs.
How can Michelmores assist?
- We want to help our clients navigate the changes introduced by the implementation of the ECCTA. We will continue to monitor the developments and publish further updates on our ECCTA Hub as and when the Government announces new measures.
- Michelmores has a dedicated Corporate Services team led by experts in company law and corporate governance. The team will be happy to speak with you if you want to know more about the forthcoming Companies House reforms or how ECCTA will affect your company or organisation.