Companies House reforms - transition plan
18 November 2024
The next wave of changes arising from the Economic Crime and Corporate Transparency Act 2023 (ECCTA), including enhancing the penalty regime that Companies House can apply, is currently underway, with a significant number of changes to be brought before parliament.
In a previous feature, we explained the key measures which came into effect from 4 March 2024 and highlighted the increase in Companies House filing fees.
Implementation timeline
ECCTA requires annual progress reports to be issued until 2030, however Companies House have said they expect the 50 statutory instruments required for implementation will be issued over the next 18 months, with full implementation by 2027. Against that backdrop, on 16 October Companies House issued the following indicative timetable:
| By autumn 2024 |
|
| By winter 2024 into 2025 |
|
| By spring 2025 |
|
| By summer 2025 |
|
| By autumn 2025 |
|
| By spring 2026 |
|
| By the end of 2026 |
|
Changes to filing of accounts (including increase to size thresholds)
Companies House says that software only filing of accounts will be implemented following an ‘extensive formal notice period’, however they have been unable to say when this period will begin.
They have previously said they expect it within 2-3 years of implementation of the Act.
In addition to software only filing there are a range of other changes we can expect to see as part of the accounts reforms which don’t require software filing and so could come in sooner:
- Small and micro companies will no longer be able to file abridged accounts.
- Small and micro companies will be required to file their profit and loss account and small companies will be required to file their directors’ report.
- A company claiming an audit exemption will be required to provide an enhanced statement from their directors on the balance sheet, specifying the exemption being claimed and confirming the company is eligible for it.
- A limit will be put in place on the number of times that a company can shorten its accounting reference period.
A written statement has recently been issued in parliament saying that separate legislation to increase the small and medium size thresholds included in the Companies Act by approximately 50% is expected to be set out in time for it to be effective by 6 April 2025.
A 50% increase would bring size limits to ‘not more than’:
| Entity size | Turnover | Gross assets | Employees (no change) |
| Micro | £1m | £500,000 | 10 employees |
| Small | £15m | £7.5m | 50 employees |
| Medium | £54m | £27m | 250 employees |
Implementation of restrictions on corporate directors
Only UK corporate entities with legal personality will be eligible to act as a corporate director. Corporate directors of companies will be required to have an all-natural person board, with all directors required to verify their identity for the corporate director to be registered. Overseas companies will be prohibited from acting as corporate directors in the UK.
Changes to financial penalties
It is important to note that the power for Companies House to issue financial penalties is being expanded to include any relevant offences under ECCTA and the Companies Act 2006. Financial penalties range from £250 to £2,000 depending on the severity of the offence and whether there have been previous offences. Full detail of Companies House approach to financial penalties is available.
Contact us
If you would like further information about how the Companies House reforms might impact your business, please do not hesitate to get in touch with Trish Sankey or your usual RSM contact.
