Let’s dive into some recent filing changes for small companies, which might affect how small companies, like perhaps yours, report financial details to companies’ house.
The Big News for Filing Changes for Small Companies
The Economic Crime and Corporate Transparency Act has been passed, and that means tighter rules are in place for how companies – especially small ones – report their finances to Companies House. Now, small companies and even micro-entities have to file a profit and loss account. For the smaller ones among you, you’ll also need to file a director’s report. This means your turnover details will be on the public register. Oh, and no more preparing abridged accounts.
Who Should Pay Attention to The Filing Changes?
You are classified as a small company if you have a turnover of £10.2m or less, £5.1m or less on your balance sheet, or have 50 employees or fewer!
Micro-entities, on the other hand, are those with a turnover of £632,000 or less, £316,000 or less on their balance sheet, or 10 employees or fewer.
There isn’t a set rollout date for these changes yet. But don’t worry, Companies House promises to give everyone a heads-up about what to expect. It’s unlikely the changes will have a big impact on the filing methods and requirements you’re currently used to though. More details on the current Limited Company Tax can be found in our article, ‘Limited Company Tax: A Simple Guide’.
And if you think that’s it, hang on a second. If your company uses audit exemption rules, such as being dormant, you’ll have to provide more details, including a statement confirming your company qualifies for the exemption. Plus, there’s talk of making all filings digital and reducing how often a company can shorten its accounting period.
What’s Everyone Saying About the Filing Changes for Small Companies?
Opinions are, well, mixed. Some say it’s high time for these changes, while others are worried about revealing sensitive business info. Many believe these reforms won’t prevent fraud as intended. And are also worried about small businesses getting exposed to unnecessary scrutiny, potentially placing them at a disadvantage against larger competitors.
The Bigger Picture
This is all part of a broader move to combat fraud. Companies House now has more power and will even be verifying the identity of key company figures. The government’s aim? To make the info on Companies House more reliable and accurate. They believe this increased transparency will benefit everyone in the long run, ensuring companies can’t hide illicit activities behind vague financial reports.
In a nutshell, expect more clarity and details on these requirements soon. Stay tuned, and always keep an eye on your company’s reporting responsibilities!
More information can be found on the government Factsheet.