From April 2028, the way UK companies file their annual accounts with Companies House will change significantly. Small companies and micro-entities will have to deliver profit and loss accounts, abridged accounts will disappear, and filing will move to commercial software only.
What has the government confirmed?
On 9 June 2026, the government announced that it will proceed with a package of accounts reforms under the Economic Crime and Corporate Transparency Act 2023. According to the government’s announcement, the aim is to improve the accuracy of the data held on the companies register.
The changes had originally been expected from April 2027. The announcement moves the start to April 2028 and says companies will get “one full accounting year, plus 9 months (21 months) to get ready”. Companies House says it will contact all companies through their registered email address.
In summary, the confirmed changes are:
| Change | What it means |
|---|---|
| Profit and loss filing | Small companies and micro-entities must file a profit and loss account, as other companies already do |
| Abridged accounts | The option to file abridged accounts is removed |
| Software-only filing | Accounts must be filed in iXBRL format using commercial software |
| Audit exemption | A strengthened eligibility statement for companies claiming an audit exemption |
| Components filed together | All parts of the accounts and reports must be delivered together |
| Accounting reference period | Companies will be able to shorten their period fewer times |
Why does profit and loss filing matter so much?
The reforms exist because smaller companies have not been required to deliver a profit and loss account to the register. A balance sheet is a snapshot of what a company owns and owes on one date. It says little about whether the business made money during the year.
A profit and loss account fills that gap. It shows income, costs and the resulting profit or loss over the period. Anyone reading a filing, whether a supplier, a lender or a journalist, can then see how the business traded and not just what it held on the final day.
This is the same distinction explored in why revenue and profit tell different stories. A balance sheet alone cannot show whether growing sales are turning into profit.
The longer lead time matters because the closure of web and paper filing comes with no gradual phase-in. A company that has not sorted out its software route by the start date would have no fallback channel for its accounts. Giving businesses a full accounting year plus nine months is the government’s answer to that risk, and it gives accountants and software providers time to prepare as well. Readers who follow smaller companies should also expect a period in which filings look different from year to year, as some companies adopt the new format early and others wait until the deadline.
Will the profit and loss account be public?
Not necessarily. According to the government’s announcement, small companies and micro-entities will be able to opt out of publishing their profit and loss accounts on the public register. The same announcement says companies that opt out will still provide the information to Companies House, to law enforcement and to HMRC.
The mechanics are not yet settled. The government says that “details of how smaller companies can opt out of publication of profit and loss will be confirmed in due course”. Until that guidance is published, it is not possible to say how the opt-out will work, whether it will be a one-off choice or made each year, or how a reader of the register will be able to tell that a filing has been withheld.
What does software-only filing involve?
From April 2028, according to the announcement, all UK registered companies must file their accounts in iXBRL format using commercial software. This includes companies that file through an accountant or other agent. Companies House’s web and paper-based systems will close for accounts filings.
iXBRL is a format that tags figures within a document so that computers can read them. The practical result is that filed accounts become data as well as documents, which makes it easier to compare companies at scale.
Web filing will stay available for other filings, such as confirmation statements, so the change applies only to accounts.
For the smallest companies, this means a decision about how accounts will be prepared. Some will already use accounting software that can produce a filing. Others currently use the free web service and will need an alternative before the closure.
What disappears: abridged accounts and thin audit-exemption claims
Abridged accounts let some small companies file a reduced version of their accounts. The announcement confirms that the option is being removed. Small companies will have to file the fuller set of documents, and the government’s company accounts factsheet says small companies will need to file a profit and loss account and a directors’ report. Micro-entities keep the option not to prepare a directors’ report, according to the same factsheet.
Audit exemption is also tightened. Companies that claim an exemption from audit will need to file a strengthened eligibility statement. The factsheet explains that directors must name the exemption relied on and confirm that the company qualifies for it. That puts a clearer, signed-off claim on the record.
A worked example: what a new filing could reveal
The arithmetic below is illustrative only and does not describe any real company.
Imagine a micro-entity with a year of trading shown in a simple profit and loss account:
- Turnover: £800,000
- Cost of sales: £500,000
- Gross profit: £800,000 − £500,000 = £300,000
- Overheads: £220,000
- Operating profit: £300,000 − £220,000 = £80,000
The gross margin is £300,000 ÷ £800,000, or 37.5%. The operating margin is £80,000 ÷ £800,000, or 10%.
Under the current approach, a balance sheet alone might show modest cash and some stock, with nothing to say whether £800,000 of sales was a good year or a poor one. With a profit and loss account, a reader can see margins directly and compare them with the previous year. If overheads rose to £260,000 while sales held steady, operating profit would fall to £40,000 and the margin to 5%. That is the sort of change that the wider story in a company’s accounts is built from.
Does this affect how companies respond to pressure?
Possibly, but indirectly. When costs rise or demand shifts, companies tend to adjust operations before strategy, and the effect shows up first in margins. If more small companies file profit and loss accounts, and do not opt out of publication, those margin changes become visible earlier to lenders and suppliers deciding whether to extend credit.
The effect depends on how many companies choose the opt-out. If many do, the public register will show less than the headline change suggests, even though regulators and HMRC receive the full picture.
What should readers do with this now?
There is time, and the details are incomplete. A sensible approach is to treat the following as open questions rather than settled facts:
- The opt-out process. How companies opt out, and what the public register will show, remains to be confirmed.
- Software choices. Companies that currently use web filing will need an alternative route by April 2028.
- Accounting reference periods. Companies that sometimes shorten their period should check the final rules, as the number of times a company can do so is being reduced.
- Official communication. Companies House says it will write to companies by email, so keeping the registered email address up to date is worthwhile.
Conclusion: more data, with a privacy valve
The 2028 reforms make filed accounts fuller, more consistent and easier to analyse. Profit and loss figures, no abridged shortcuts and tagged data all point towards a register that tells readers more about how small companies actually perform. The opt-out is the open question, because it will determine how much of that information the public ever sees.
This article is general information, not personalised financial advice. Rules, dates and rates change, so check the latest official guidance.
Sources: GOV.UK
