Plans to tighten Companies House filing rules look set to be paused, as ministers aim to reduce regulatory burdens on UK businesses.
Originally due to take effect from April 2027, the changes would have required small and micro companies to submit profit and loss accounts for the first time. These businesses currently benefit from exemptions allowing them to file abridged accounts.
The reforms, part of the Economic Crime and Corporate Transparency Act 2023, also included a shift to mandatory digital filing using iXBRL-compliant software. Paper accounts and certain online filing methods would no longer be accepted.
The goal was to improve data quality and reduce fraud. But business groups raised concerns over the extra cost and disruption for small firms, who would need to purchase specialist software or pay agents to file on their behalf.
Some warned that the added transparency could let competitors scrutinise margins and weaken negotiating positions.
The government now appears to be rethinking the reforms, in line with its new industrial strategy that targets a 25% cut in red tape.
The Federation of Small Businesses welcomed the news, calling it a “relief” for company directors who support better data but fear being undermined by over-regulation.
Companies House had already written to firms advising them to prepare for the changes. It described software filing as vital for improving accuracy and speeding up processing times.
However, critics such as Transparency International UK argue scrapping the reforms would be a backwards step for corporate accountability.
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