Breaking news from Companies House on filing changes under ECCTA 2023

Companies House has announced that it’ll require all companies and Limited Liability Partnerships (LLPs) to file their accounts using commercial software from 1 April 2027. Accounts filed using software will need to be tagged using iXBRL (Inline eXtensible Business Reporting Language).

Also, from 1 April 2027, Companies House is streamlining accounts filing options for small and micro-entity companies.

These changes arise from the Economic Crime and Corporate Transparency Act (ECCTA) 2023, and, while not unexpected, this announcement provides long-awaited clarity about the timescale.

Companies House has a dedicated page highlighting changes to accounts arising from changes to UK company law.

Filing via commercial software

After 1 April 2027, the Companies House web filing service and paper filing route for accounts will close. These will, however, remain open for other statutory filings.

This means that all companies and LLPs will need to find a suitable software options before web-based and paper filing options are no longer available. This applies to directors who file accounts themselves, and companies who use third party agents or accountants to file their accounts.

The accounts of the following entities are within scope of these filing requirements:

• All UK registered companies regardless of size
• LLPs
• Eligible overseas entities with UK operations
• Charities registered as companies
• Community Interest Companies (CICs)

Companies House has prepared a Stakeholders guide to software only accounts filing to support companies and their advisers with the transition.

Electronic tagging

The introduction of software-only filing means companies and LLPs will need to ensure the underlying data within a set of accounts is correctly structured and tagged using iXBRL.

iXBRL is a worldwide technical standard that combines HTML with machine-readable XBRL tags, allowing the same document to be both machine and human readable. Companies will need to use software to create and tag the accounts.

Companies House emphasises that companies and LLPs will need to source an appropriate software package to meet their needs and recommends that they fully understand the software’s tagging features on test accounts well before the mandatory deadline to build familiarity with the process.

Companies House has a software look-up tool to help companies compare and choose a suitable software product.

Streamlined accounts filing options

The following streamlined accounts filing options will be available to small and micro-entities from 1 April 2027:

• Micro-entities will be required to file a copy of their balance sheet and profit and loss account.
• Small companies will be required to file a copy of their balance sheet, directors’ report, auditor’s report (unless the company is eligible for and has elected for audit exemption) and their profit and loss account.
• Companies will no longer be able to prepare and file ‘abridged’ accounts.

Claiming an audit exemption

Any company claiming an audit exemption will need to give an additional statement from its directors on the balance sheet.

Directors will need to specify which exemption is being claimed, and confirm that the company qualifies for the exemption.

Accounting reference periods

Companies House is to limit how many times a company can shorten its accounting reference period.

A company will have to provide a business reason if it wants to shorten the period more than once within 5 years.