The impending implementation of the Economic Crime and Corporate Transparency Bill will necessitate businesses to ready themselves for notable alterations in the way Companies House operates. One pivotal change within this reform package dictates that all small companies, including micro-entities, must submit their profit and loss accounts.
The Government expects the changes to “improve transparency” and help tackle economic crime by making more financial information available to the public and enforcement agencies.
‘Change not expected to be overly burdensome’
A Government spokesman said: “Having key information such as turnover and profit or loss available on the public register will help creditors and consumers make better-informed decisions.
“It will also improve the value of the information on the register for users.
“The lack of detail in small and micro-accounts has made it impossible to confirm eligibility to file under a specific regime and claim audit exemptions.
“It has also made it difficult for lenders and creditors to determine the creditworthiness of small businesses. This can deter them from offering finance which hinders small business growth.
“As small and micro-entity companies are already required to file a copy of their annual accounts to HMRC, we do not anticipate this change to be overly burdensome.”
Other accounts-related changes
Other changes to filing accounts will include the removal of a paper-filing option for most companies and the requirement for a company relying on an audit exemption to provide an additional statement by the directors on the balance sheet and limiting the number of times a company can shorten its annual reporting period.
The detail and format of the profit and loss account filings will be set out in secondary legislation. This is currently being developed in consultation with business and accountancy groups.
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