Small company accounts: what changes in April 2028 and what you should be doing now

On 9 June 2026, the government confirmed what many in the profession had quietly assumed might never happen. From 1 April 2028, the way that small companies and micro-entities file their annual accounts with Companies House will change fundamentally, and the changes are more significant than the headline figures suggest.

If you are a director or company secretary of a small or micro-entity company, this is not a story to park for next year. Twenty-one months sounds like a long runway. It is not.

What is actually changing?

The reforms, which flow from the Economic Crime and Corporate Transparency Act 2023 (ECCTA), introduce three headline changes for small companies and micro-entities.

First, profit and loss accounts must now be filed with Companies House. This is the most contested element of the package. The requirement was originally scheduled for April 2027, was then reported to have been shelved following pressure from business groups, and has now been confirmed - delayed by a year, but proceeding. Companies can opt out of having that information visible on the public register, so it will not be accessible by competitors or the general public, although details on how to opt out are still to be confirmed. It will, however, still be available to government bodies and law enforcement. If your board has not yet had a conversation about what that means in practice, now is the right moment to have it.

Second, all companies must file their annual accounts using commercial software in iXBRL format. iXBRL (Inline eXtensible Business Reporting Language) is a digital tagging standard that makes financial data machine-readable as well as human-readable. The existing Companies House web-filing service and paper-based filing routes will close for accounts from April 2028. They will remain available for other statutory filings, such as confirmation statements and director updates, but accounts must go through commercial software.  Companies that already have to provide tagged accounts to HMRC should be able to leverage this tagging and avoid additional work when providing tagged accounts to Companies House. However it’s worth noting that the submissions are separate as typically accounts are submitted to HMRC alongside the CT600 tax return.  

Third, the option to file filleted or abridged accounts is being removed entirely. Small companies and micro-entities that have historically relied on filleted or abridged accounts, stripping back what they share with the register, will need to file their full statutory accounts going forward. This means filing a balance sheet, profit and loss account and the full auditor’s report (unless exempt). This is a step up from companies currently being able to include a note in their accounts confirming that a clean audit opinion has been issued.   

A less-discussed but practically significant change is a new restriction on how frequently a company can shorten its accounting reference period. Shortening will now be limited to once in every 5 years, bringing it in line with the rules for lengthening an accounting period and companies will have to provide a business reason if they want to shorten the period more than once in this new 5 year period The restriction on shortening accounting reference periods closes what has sometimes been used as a backdoor route to delay filing, in keeping with ECCTA's wider aim of ensuring the register reflects accurate, timely financial information.

Finally, any company claiming an audit exemption will need to give an enhanced statement from their directors on the balance sheet. Directors will need to specify which exemption is being claimed, and confirm that the company qualifies for the exemption. This additional statement is intended to act as a deterrent to criminal activity and to provide additional enforcement evidence. This will be of particular relevance to directors when approving the accounts and company secretaries should ensure approval of the audit exemption is minuted appropriately.

A moment of honesty about the burden

For many small companies, these changes represent a genuine additional burden. The government delayed the reforms by a year specifically because of concerns raised by accountants, business groups, and directors about the practical impact on smaller businesses. Those concerns were legitimate.

The move to iXBRL filing in particular is not trivial. iXBRL tagging is a skilled, time-consuming process that adds time and costs to the accounts preparation workflow.

• Companies that currently file their own accounts directly through Companies House web-filing will find that route closed and will need to find an alternative solution. 
• Those that use accountants will need to confirm that their advisers are able to support iXBRL tagging, and have appropriate commercial software to submit the accounts to Companies House. 

It’s very important to understand that this tagging process needs to be built into the preparation timeline, not bolted on at the end.

The cost of compliance will rise and is a real consequence of the reforms, and it is worth acknowledging rather than glossing over.

It’s not just small companies that are affected by the requirement to file accounts in iXBRL format online – to be clear, this requirement will apply to all companies, regardless of size and formation, and regardless of whether you file the accounts yourself, or through a third party. That means there could be real cost implications for some large and medium sized companies, including LLPs or unlisted PLCs, and in particular where a group has a large and complex subsidiary structure, the impact could well be challenging, time consuming and costly.

Despite all the challenges outlined above, the policy objective behind these changes is one we broadly support. Greater transparency, more reliable financial data on the register, and reduced opportunities for financial crime and fraud are things that good governance demands. The ECCTA reforms as a whole represent a shift towards meaningful director accountability, and the accounts changes are part of that picture. The discomfort of compliance is not a reason to resist; it is a reason to plan.

It’s worth noting that companies with transferable securities admitted to trading on UK regulated markets (e.g. the main market of the London Stock Exchange or Aquis Stock Exchange) have had to file tagged accounts through the National Storage Mechanism for a number of years now, so these companies won’t be affected by these changes.

In good news

ECCTA had originally included a requirement for small companies to file a Directors' Report. However, as part of the Government's Modernising of Corporate Reporting programme, the government has announced that this requirement will no longer apply – so small companies will continue not needing to produce a Directors’ Report.

Five practical steps to take now

1. Review your current accounts preparation and filing process. Understand how your accounts are currently prepared and how they reach Companies House. If you, or your accountant, currently use web-filing or paper submission for accounts, that route closes in April 2028. Do not assume your existing arrangements are compliant - confirm it.

2. Check your software. If you use commercial accounting software, verify that it supports direct API submission to Companies House and automated iXBRL tagging. Not all software is equally capable, and not all providers will have completed their integrations by the time the deadline arrives. Companies House have published a tool to find software suitable for the type of accounts you’re filing – you can access that here: https://www.gov.uk/software-company-accounts. Review this early and do not assume that because your software handles other filings, it will handle iXBRL accounts submissions without additional set-up or cost.

3. Bring forward your target sign-off date for accounts. This is a step that is easy to overlook but genuinely important. iXBRL tagging is not instantaneous — it takes time to apply correctly, review, and validate. If your board currently approves accounts close to the statutory filing deadline, that timeline will need to move. Build the tagging process into your calendar and set an internal sign-off date that gives your advisers adequate time to produce and check the tagged version before submission. A late discovery that your accounts need significant rework to tag correctly is a very avoidable problem.

4. Discuss the profit and loss opt-out now. The option to keep your profit and loss account off the public register needs to be actively exercised - it is not the default. Your board should consider whether to use it, understand the process for doing so (once details on this are published), and make sure that decision is properly recorded. Bear in mind that the information will still be accessible to HMRC, Companies House, and law enforcement, regardless of whether you opt out of public disclosure.

5. Begin identity verification if you have not already done so. The identity verification regime under ECCTA is live for new appointments and in its transition phase for existing directors. If your directors have not yet completed identity verification, address this now. Companies House accuracy expectations have tightened, and this is a separate compliance obligation sitting alongside the accounts changes that carries its own deadline pressure.

What this means for boards

For boards of small companies, the temptation is to treat this purely as an accountant's problem. It is not. The directors are responsible for approving the accounts and for ensuring the company meets its statutory filing obligations. The shift to iXBRL, the removal of abridged or filleted accounts, and the mandatory profit and loss account filing all require directors to understand what is changing, to provide adequate time and resource for compliance, and to confirm, in advance of April 2028, that their company's arrangements are fit for purpose.

A governance framework that functions only when nothing changes is not a strong foundation for a company. The purpose of good governance is precisely to anticipate change, prepare for it, and ensure the organisation continues meets evolving obligations without scrambling at the last moment.

If any of this raises questions about your company's current position or how to approach the transition, please do get in touch. Our company secretarial team works with companies of all sizes on statutory compliance and would be happy to help you think through what these changes mean in practice.

Georgina Gearing Bell is a Senior Manager in the Company Secretarial team at Law Debenture, specialising in listed investment trusts and financial services clients.