The Economic Crime and Corporate Transparency Act 2023 will, amongst other things, simplify and increase transparency of reporting by companies, particularly small companies and micro-entities.

Under the Act:

• 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;
• there are powers to make regulations to restrict publication of some of the information within small and micro-entity profit and loss accounts, which are expected to be the subject of further consultation – the full P&L still being filed; 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.

It is expected that there will be further announcements from Companies House and The Department for Business and Trade (DBT) as to when these changes will be introduced. The Act also paves the way for filing of accounts at Companies House to become fully electronic, removing the ability to file hard copy.

The Act 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, verification, investigation and enforcement) and tightens registration and increases transparency requirements on limited partnerships.

A copy of the press release, full Act and fact sheets are available on the Government website.  Impact assessments are available on the government website here.