Included in the Bill are reforms to address how and what information companies report when filing their annual accounts with Companies House. These measures are designed to simplify and increase transparency of reporting by companies, particularly small companies and micro-entities, where the existing filing framework will be been streamlined.
Under the proposals in the Bill:
- the option to prepare and file abridged accounts will be removed;
- the option for small companies to omit their profit and loss account and directors’ report from the filed accounts will be removed;
- micro-entities will be required to file their profit and loss account but the option to not prepare a directors’ report will be retained; and
- companies claiming an audit exemption will be required to include a statement by the directors on the face of the balance sheet confirming which exemption is being taken and to confirm that the company qualifies for the exemption.
The Bill also introduces additional requirements regarding company formation and names, confirmation statements and identity verification of persons with significant control. It grants additional powers to Companies House (for example over company registration, investigation and enforcement) and tightens registration and transparency requirements on limited partnerships.
Further changes are intended to be made at a later date using existing legislative powers or powers being passed through the Bill, including mandating digital filing and full tagging of financial information in iXBRL format and reducing the number of times a company can shorten its Accounting Reference Period.
The government has not indicated an effective date for the Bill and it will not take effect until it obtains Royal Assent at the earliest.
A copy of the press release, full Bill and fact sheets are available on the Government website.