Profit and Loss Filing Shake-Up: Government U-Turn on the Horizon?
It’s been a whirlwind week in the world of company reporting.
At the beginning of July, Companies House confirmed sweeping new requirements that would see small companies and micro-entities filing profit and loss (P&L) accounts from April 2027. But, just days later, those plans may already be facing the axe.
What Was Announced?
Initially, Companies House issued guidance stating that from 1 April 2027:
Small companies (with turnover under £10.2m, balance sheet total under £5.1m, and fewer than 50 employees) will no longer be able to file abridged accounts.
Instead, they would need to submit a full profit and loss account in line with Financial Reporting Standards.
Micro-entities would also be subject to new requirements, although specific details were still pending.
Additionally, from the same date, all company accounts would have to be filed using commercial software.
The aim was to increase transparency, reduce economic crime and support better business decision-making by putting more financial information on the public record.
A Swift Change of Direction?
However, according to reports by AccountingWEB and The Financial Times, the government may now be reconsidering. Despite Companies House pushing ahead and briefing stakeholders on 1 July about the new regime, it seems the Department for Business and Trade is not so sure.
When pressed, the Department would only confirm that it is their “intention” to require P&L accounts to be filed — and even that is subject to “forthcoming regulations”. This vague language has cast serious doubt over whether the policy will survive the next round of legislative decisions.
Sources close to Business Secretary Jonny Reynolds reportedly told the Financial Times that the policy “would not happen” under his leadership, as it conflicts with the government’s goal of reducing regulatory burdens on business.
What This Means for Businesses
For businesses and their advisers, the news brings more questions than answers. At Zyla Accountants, we’ve been watching the ECCTA reforms closely, and this development adds to a growing sense of uncertainty.
Only months ago, Companies House launched registration requirements for authorised corporate service providers. This marked a significant step in the wider push for identity verification and anti-fraud measures. From autumn 2025, identity checks will become mandatory for all directors and people with significant control, with further reforms for third-party filers due by spring/summer 2026.
Against that backdrop, the backpedalling on P&L filing is hard to square.
A Divisive Debate
The original proposals triggered a lively debate. Many small business owners and accountants expressed concerns that making financial data publicly available would expose them to unfair scrutiny, potentially giving competitors access to sensitive commercial information.
Others argued that the reforms would help crack down on fraudulent activity and improve trust in UK corporate data. Transparency advocates, regulators and anti-money laundering groups had generally welcomed the direction of travel.
But now, with the government signalling it may abandon the plans, it seems the debate will continue. And if an official announcement does confirm the policy is being scrapped, it will mark a significant departure from the path Companies House had been confidently pursuing.
Where Do We Go From Here?
At the time of writing, no formal announcement has been made. The Department for Business and Trade maintains it is focused on avoiding “undue burdens” for businesses, but the lack of clarity is troubling.
What looked like a clear-cut compliance change just a week ago now feels uncertain. For accountants, software providers and small businesses, that means more ambiguity as we plan ahead.
We’ll continue to monitor developments closely and will keep our clients updated on any concrete changes.
If you'd like to discuss how these potential changes could affect your business or need help navigating the evolving Companies House landscape, please get in touch with the team at Zyla Accountants.
Sources:
AccountingWEB
The Financial Times
Companies House
Department for Business and Trade
All information correct as of July 2025.