Changing rules on company reporting for small businesses

What is currently planned for 2027?

Under the proposals due to take effect from 1 April 2027:

• Micro-entities and small companies will need to file a profit and loss account
• Small companies will be required to file a director’s report
• Abridged accounts will no longer be permitted

At the same time, comments from the Chancellor, Rachel Reeves, indicate a shift towards easing the compliance load faced by small and medium-sized companies.

Areas where requirements may be reduced

The Chancellor has said that companies will no longer need to file a director’s report at Companies House. Some of the information normally found in the report will instead be presented elsewhere within the financial statements.

Medium-sized private companies will also be relieved of the need to prepare a strategic report. While any reduction in administration is welcome, there are concerns that the latest announcements may not go far enough to offset the tightening expected in 2027.

Updated size thresholds

Earlier this year, reporting thresholds increased by roughly 50 percent. Further changes have now been announced for accounting periods beginning on or after 6 April 2025. To be classed as a micro-entity or a small company, a business must fall below two out of three criteria: turnover, balance sheet total and average number of employees.

New thresholds from April 2025

Micro-entities continue to benefit from lighter reporting requirements, and small companies may still be able to make use of audit exemption. Companies House offers full guidance for those who need more detail here.

Partner Royal Deb comments: “The direction of travel on reporting is confusing for many clients, with tightening in some areas and loosening in others. These changes are significant and will affect planning for future year ends. Reviewing your company’s size status early is sensible so that you understand what will be required and avoid unexpected compliance pressures.”

If you are unsure how these reporting changes affect your company, or you would like help planning ahead of the new thresholds and filing rules, our team can guide you through the options. Get in touch with your usual Forrester Boyd adviser or speak to our corporate reporting specialists today.