Government plans on company reporting currently point in two directions at once. On the one hand, some regulations are due to tighten from April 2027. On the other, the latest announcements suggest a move towards reducing the burden for smaller companies. As a result, it can be hard to see how all these small company reporting changes fit together in practice.
Below is a summary of what is on the table and how it affects company reporting.
Changes planned from April 2027
The current intention is that from 1 April 2027:
- Both micro-entities and small companies will have to file a profit and loss account.
- Small companies will have to file a director’s report.
- Companies will no longer be able to prepare and file abridged accounts.
If implemented as planned, these changes would increase the level of detail that many smaller companies need to file at Companies House. Therefore, even simple sets of accounts may become more visible to anyone who chooses to review them.
Loosening some requirements
However, the Chancellor, Rachel Reeves, has recently announced that red tape is to be cut for small- and medium-sized businesses.
The Chancellor has said that the requirement to submit a director’s report to Companies House will be removed for all companies. Some aspects of the director’s report will not simply disappear. Instead, they will be reallocated elsewhere in a company’s financial statements.
In addition, medium-sized private companies will no longer need to produce a strategic report as part of their annual reporting.
While any reduction to the administrative burden is welcome, there are concerns that the latest plans do not go far enough to deliver a genuinely simpler regime. These competing announcements mean that small company reporting changes still feel uncertain for many business owners.
Thresholds for company size
The size thresholds for corporate reporting were increased by approximately 50% as recently as April this year. Despite that, the Chancellor has also announced further increases.
For a company to be classed as either a micro-entity or a small company, it must be below two of three thresholds for:
- Turnover
- Balance sheet total
- Average number of employees
For accounting periods commencing on or after 6 April 2025, the thresholds are currently as follows:
| Micro-entity | Small company | Medium-sized company | |
| Turnove | £1 million | £15 million | £54 million |
| Balance sheet | £500,000 | £7.5 million | £27 million |
| Employees | 10 | 50 | 50 |
Micro-entities benefit from reduced reporting requirements, which can make annual compliance more straightforward. Small companies may qualify for audit exemption, which can significantly reduce costs.
Companies House accounts guidance can be found here
These proposals are still evolving and can be confusing in practice, particularly for growing companies moving between size categories.