April 2028 – Profit & Loss mandatory for Small Companies

April 2028 – Profit & Loss mandatory for Small Companies

After months of delay, the government has decided to go ahead with balance sheet and profit and loss (P&L) filing for small companies and micro-entities from 1 April 2028, but with a major caveat after intense lobbying against the plans.

While it has been confirmed that businesses will have to file more detailed accounts, smaller businesses will not be required to have their full accounts published on Companies House for public view on the register.

Small companies and micro-entities will be able to ‘opt out of publication’, Companies House confirmed.

The decision to permit companies to opt out of the public register is seen as a major win for the small business community.

Companies House said: ‘Allowing small companies and micro-entities to opt out of publishing their filed profit and loss accounts addresses concerns from the business and investment community around the privacy and commercial risks for smaller companies of disclosing this information.’

Another change will see the end of abridged accounts, which will no longer be allowed.

However, it has been confirmed that the government will not go ahead with the plan for small companies to file a director’s report as part of their annual report and accounts.

Bringing filing into the digital age, all companies will have to file accounts using commercial software from April 2028, although this has been delayed by a year from the original date.

This applies to companies who file their own accounts and those who use third party agents or accountants to file their annual accounts. It is important to note that the web and paper-based filing systems will be closed for accounts filings from this date.

Under the new rules, companies will also have to provide a ‘strengthened eligibility statement for all companies claiming an audit exemption’.

Another change will see a limit on the number of times a company can shorten its accounting reference period with changes to secondary legislation required.

The minister for small business, acknowledged the strong resistance to the original plan, which would have required total disclosure by the earlier date of April 2027.

‘This sparked some concern about the impact some of the reforms might have on businesses,’ he said. ‘As a result, we paused implementation to take time to engage with a range of stakeholders.’

‘We have listened carefully to stakeholders’ concerns and after some consideration have taken the decision to proceed with the reforms, but with two changes.’

Companies House will contact all companies via their registered email address to tell them about these changes and signpost available guidance.

Details of how smaller companies can opt out of publication of P&L will be confirmed in due course.

Where a company opts out of publishing its profit and loss accounts, Companies House, law enforcement and HMRC will still have access to help identify and tackle fraud, economic crime and tax evasion.