The way Limited companies file their accounts is set to change, with new legislation that received royal assent in October 2023. The changes are expected to take effect in phases to allow for a smooth transition and this process will begin shortly, so in this article we’ll look at what this means for your small business.
What is changing?
The changes are a result of the Economic Crime and Corporate Transparency Act, which is intended to improve the quality of the data held by Companies House, improve transparency and empower them to tackle economic crime.
Here’s a brief list of the changes:
It will be compulsory for all small companies to file profit and loss accounts
Accounts will need to be filed digitally – it won’t be possible to file any other way
Identity verification will be introduced for anyone setting up, running, or controlling a company
Companies House will be given power to check, remove, or decline information
They will also have more powers to challenge suspicious information and cross-check with other public and private sector bodies
The Government hopes that these measures will stop fraudulent companies being registered and give businesses confidence that the information on the register is genuine.
What this means for small Limited companies
Limited companies must file accounts to Companies House every year, and under this legislation this will only be possible using approved software, making paper filing a thing of the past.
You will also no-longer have the option to file “abridged accounts” without a directors’ report and profit and loss statement.
Profit and loss statements must already be filed with HMRC, but they will now also need to be provided to Companies House as well. It’s not yet clear how detailed these accounts will need to be.
What action do you need to take?
Your accountant should understand your particular business and how it will be affected by these changes, so in the first instance it’s best to discuss it with them. You can also expect them to update you as and when these changes take effect.
If you have questions of if we can help in any way, please call our expert team on 01296 468483 or email info@orangegenie.com.