The UK Companies House is changing the way annual accounts are filed. Companies House reform dictates that all smallest companies will be required to file profit and loss accounts, and annual accounts electronically.
Accountants and bookkeepers could be facing the transition to compliance software as well as a new approach to preparation of accounts. It is also essential to educate clients about the changes and get them on board.
This article explains what the changes mean for most businesses. The following article will explain the changes to Companies House, who is affected by them, and how you can comply with them.
How do company accounts need to be filed under the new rules?
In order to meet the new company house free filing requirements, there are two parts:
A company account must be filed using software – Company Accounts and Tax Online or Companies House’s web-based service.
Small businesses, including micro-entities, will have to file profit and loss accounts.
For every company, this will be a sensual solution. Larger companies that are currently able to only use paper filing are included in this category. Small and micro businesses do not currently have to file profit and loss accounts. In an effort to streamline filing options and standardise company accounts records, Companies House will no longer accept abridged accounts for small companies and micro entities.
Companies and practitioners could be affected by the additional accounts-related changes. For information on the changes to UK company filing requirements, check out the Companies House guidance at gov.uk.
What is the purpose of changing the filing requirements at the company house?
Recently, Companies House has seen a spike in fraudulent activity. Companies House will benefit from the changes because they will enhance transparency and the quality of information on the register. Fraudulent activity and economic crime will be easier to detect.
As a result of limited disclosure of information, fraudsters have been able to pose as companies on Companies House’s register. Creditors and consumers can make better informed decisions when small companies and micro entities file profit and loss accounts and director reports.
What is the expected implementation date for Companies House changes?
It has not yet been confirmed when filing requirements will change. Join the e-mail list to receive updates on the reform of Companies House.
The transition to software filing will take time, so don’t worry. Now is the time to inform your colleagues and clients about the changes to Companies House filing before they become mandatory.
What businesses will be affected by these changes?
In order to submit software filings, clients using Cato are required to switch from paper filing to online filing through Companies House.
Software filing is already available to the following companies
- Dormant
- Micro entity
- Small
- Full, unaudited
- Community interest companies
Companies House is developing software solutions for company types that cannot currently use software. All types of companies will eventually be required to file software.
What happens if businesses don’t comply with these changes?
Company accounts cannot be filed without software. In order to be ready for the changes when they come into effect, HMRC encourages businesses to adopt compatible software now.
Without software, you won’t be able to submit your annual accounts to Companies House. Despite the fact that penalties aren’t yet confirmed for changes, companies will likely continue to incur the current late filing penalties if their annual accounts or profit and loss reports aren’t submitted via software.
Speak to our team for advice how to switch to a new accounting software.
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