UK government announces plans to modernise corporate reporting

The UK government has announced that it will undertake an expanded review of the Modernisation of Corporate Reporting covering all aspects of the Annual Report and Accounts. As part of this, a consultation will be launched next year.

This review will encompass the earlier work undertaken by the Department for Business and Trade (DBT) on non-financial reporting and should enable a more holistic assessment of UK corporate reporting requirements to be performed.

Separately, the government announced that it: 

• Intends to introduce legislation which will see medium sized private companies exempted from producing a strategic report in their Annual Reports.
• Plans to exempt wholly owned subsidiaries from producing a strategic report where they are covered by the reporting of a UK parent. 
• Will remove the requirement to produce a directors’ report with some provisions removed completely, and others relocated elsewhere in the Annual Report. 

The government believes that these changes could save businesses around £230million each year in administrative burdens.  

No timetable for these changes was provided but we envisage that the government will take these forward as soon as it is able.

The government also announced that it will merge the Office of the Regulator of Community Interest Companies (CIC) into Companies House (CH) This change will be implemented when parliamentary time allows.