Government Delays Small Company Filing Reform Beyond 2027 – A Missed Opportunity for Greater Transparency?

The government has confirmed that proposed reforms to company accounts filing; originally due to take effect from April 2027; have been delayed, with no new implementation date currently set. This follows stakeholder feedback raising concerns about additional administrative burden on small businesses.

The reforms, introduced under the Economic Crime and Corporate Transparency Act 2023, were designed to modernise Companies House filing, improve data quality, and strengthen transparency in the UK business environment. However, following review, the government has stated that changes to accounts filing are “under review” and that businesses will be given at least 21 months’ notice before any new requirements take effect.

In practical terms, this means that for the foreseeable future, current small company and micro entity filing options will remain unchanged. Plans to mandate digital; only accounts filing, remove abridged accounts, and require small companies to file full profit and loss accounts at Companies House have been postponed; and may potentially be shelved altogether.

What were the proposed changes?

Had the reforms proceeded in 2027, they would have introduced:

• Mandatory digital filing of accounts at Companies House
• Abolition of abridged accounts
• Micro entities filing both a balance sheet and profit & loss account
• Small companies filing balance sheet, profit & loss account, directors’ report and auditor’s report (if applicable)

The stated aim was to improve transparency, reduce fraud, and strengthen the reliability of the Companies House register.

The case for delaying reform

There are understandable reasons why the government has paused implementation:

Pros of the delay

• Reduces additional compliance costs for small businesses
• Avoids forcing businesses into new software systems prematurely
• Gives time for clearer guidance and better implementation planning
• Prevents overburdening growing businesses during a fragile economic climate

We recognise that many business owners are already navigating rising costs, recruitment pressures, and complex regulatory change. A rushed rollout of new reporting systems could have created disruption without delivering immediate value.

We also acknowledge that directors’ reports often become boiler-plate documents, offering little meaningful insight into the business. Removing or simplifying this requirement could, in principle, reduce unnecessary paperwork.

But is this a backward step for transparency?

From our perspective at MJH Accountants, there is also a strong argument that delaying these reforms represents a missed opportunity to improve commercial transparency.

Limited companies benefit significantly from limited liability; a powerful protection for shareholders and directors. In return, it is only fair that creditors, suppliers, customers, and other stakeholders can access sufficient financial information to assess a company’s credibility before engaging.

Currently, micro entity and abridged accounts often provide minimal insight. The absence of a publicly filed profit and loss account means:

• Creditors struggle to assess trading performance
• Suppliers lack visibility over financial stability
• Potential partners have limited data for due diligence

This can undermine trust in the wider business environment; and ironically can disadvantage well-managed businesses that would welcome the opportunity to demonstrate financial strength.

Greater transparency does not need to mean greater burden; but well-designed digital filing and clearer reporting standards could ultimately raise confidence in UK companies as a whole.

What happens next?

The government has confirmed that reforms remain “under review” and that any future changes will come with at least 21 months’ notice. For now, existing filing rules remain in place for small companies and micro entities.

We will continue to monitor developments closely and advise clients well in advance of any future change.

Our view

At MJH Accountants, we support proportionate reform; reducing unnecessary bureaucracy where it adds no value. However, we also believe that improved financial transparency benefits the broader business ecosystem. When used correctly, financial reporting is not just a compliance exercise; it is a trust signal.

The challenge ahead is striking the right balance: protecting small businesses from excessive burden, while ensuring the market has access to meaningful financial information. We hope future proposals achieve both.