For years, one of the practical advantages of the UK small company filing regime has been the ability to keep much of the profit and loss account away from the public Companies House record.
That is changing.
From 1 April 2028, small companies and micro-entities will be required to deliver a profit and loss account to Companies House.
There is an important qualification.
Those companies will be able to opt out of having the profit and loss account published on the public register.
So the change does not mean that every competitor, supplier or customer will automatically be able to search Companies House and see the full profit figure of every small business.
It does mean that the information will increasingly exist within the formal filing system even when public access is restricted.
Companies House, HMRC and law enforcement bodies will still be able to access filed information where publication has been withheld.
For businesses, this creates questions around privacy, transparency, commercial sensitivity and internal reporting controls.
For ACCA candidates, it creates a useful current reporting issue because it is not simply about filing a form. It is about why financial information exists, who needs it and how regulators balance transparency against the legitimate interests of smaller businesses.
Candidates developing this type of wider reporting analysis with an ACCA SBR tutor should focus on those competing objectives rather than treating the reform as another administrative Companies House rule.
The current system allows much less information to be filed
Small companies currently benefit from reduced filing requirements.
A business may prepare fuller accounts for its members while submitting less information to Companies House.
Small companies can currently omit the profit and loss account from the copy delivered to the registrar.
Micro-entities can also use a simplified reporting regime and currently do not have to place their profit and loss account on the public register.
This means someone researching a small private company may see the balance sheet and certain accompanying information without seeing the company’s sales, operating costs and reported profit.
That can make a significant difference.
A competitor may know roughly how large the balance sheet is but have far less information about margins and annual performance.
A customer may know the business exists and files accounts but still be unable to see how profitable it is.
A supplier may have to rely on credit information, trade history and other evidence rather than obtaining a complete picture from Companies House.
The 2028 reform changes the filing side of that equation.
Filing and publication are not the same thing
This is the most important distinction in the new rules.
From April 2028, qualifying small companies and micro-entities will have to provide a profit and loss account to Companies House.
That does not necessarily mean it will appear publicly.
The Government has decided that these businesses should be able to opt out of publication of the profit and loss information.
The detailed process for doing this is still expected to be confirmed.
This creates two separate questions.
Has the company filed the information?
And has the company chosen to make it publicly available?
Those are no longer the same decision.
A company could therefore comply fully with its filing obligation while protecting the profit and loss account from general public inspection.
That is a much more nuanced position than saying small company accounts are simply becoming public.
Why the Government wants the information filed
The wider Companies House reforms are intended to improve the accuracy and reliability of information held on the register.
They also form part of the Government’s effort to tackle fraud and economic crime.
A system where different classes of company provide dramatically different financial information inevitably creates gaps.
Those gaps may make it more difficult for public bodies to analyse suspicious activity, compare information or identify figures that do not make sense.
Requiring the profit and loss account to be filed gives Companies House and other authorised bodies a more complete financial picture.
This can support regulatory and enforcement activity.
It may also allow inconsistencies to be identified more easily.
For example, information reported elsewhere may appear inconsistent with the financial performance contained in the company’s accounts.
That does not mean a difference automatically indicates fraud.
It provides another piece of evidence.
This is an important reporting principle.
Better information can improve scrutiny even when the information is not made available to everybody.
Why small businesses were concerned about publication
There are legitimate reasons why many small business owners have been uncomfortable with the idea of publishing their profit and loss account.
A small private company operates differently from a listed business.
Its competitors may know the owner personally.
Its largest customers may represent a significant proportion of revenue.
Its suppliers may be concentrated within a small market.
Its employees may understand the business intimately.
Detailed profit information can therefore have a much more immediate commercial effect.
Imagine a specialist consultancy with a small team and a relatively high profit margin.
A large customer might use publicly available profitability information during the next fee negotiation.
A competitor might estimate how much the company earns from a particular type of work.
Employees may draw conclusions about the company’s ability to increase wages without understanding tax, working capital, investment requirements or owner remuneration.
The information itself may be accurate.
The commercial interpretation may still be simplistic.
That explains why the debate cannot be reduced to transparency being good and privacy being bad.
Both sides have legitimate concerns.
Profit is commercially sensitive in a way that the balance sheet may not be
The balance sheet tells users about assets, liabilities and equity at a particular date.
The profit and loss account reveals much more about what happened during the year.
Depending on the format, it may give users information about turnover, operating costs, profit before tax and the overall profitability of the company.
That can help someone estimate margins.
It may indicate whether the business has grown.
It may show that a company appearing successful from the outside actually operates on very thin profits.
It may show the opposite.
For a small company operating in a competitive niche, that information can be valuable to other market participants.
This is why the option to restrict public publication matters.
The Government gets the information it wants within the filing system.
The company retains some control over whether ordinary members of the public can see it.
Transparency can also benefit small businesses
Privacy is only one side of the argument.
There may be advantages to publishing stronger financial information voluntarily.
A profitable company seeking finance may find that transparent accounts support its application.
Suppliers considering whether to offer credit may be reassured by evidence of stable performance.
Potential investors may find it easier to assess the business.
A company competing for larger contracts may benefit from demonstrating financial strength.
For some businesses, withholding profit information may therefore provide little commercial benefit.
The important point is that the value of transparency depends on context.
A rapidly growing company seeking external funding may welcome wider access to its financial performance.
A small owner-managed company in an aggressively competitive local market may take a different view.
The new system recognises that difference by separating filing from publication.
Accounts should not be treated as a marketing document
One danger of increased attention on filed financial information is that management becomes overly concerned with how the figures look.
The purpose of statutory accounts is not to create the most attractive public image.
They must reflect the company’s financial performance and position according to the applicable reporting requirements.
This matters when managers know that lenders, competitors or customers may scrutinise the numbers.
Pressure may develop to delay expenses, accelerate revenue or use optimistic estimates in order to protect a desired profit figure.
That creates an accounting and ethical problem.
The correct response to increased transparency is not to manipulate the result.
It is to produce reliable accounts and explain the business context where explanation is needed.
For professional accountants, integrity and objectivity remain more important than how impressive the final number appears.
Small company status still matters
The new requirements apply specifically to companies that qualify for the relevant small company or micro-entity regimes.
For accounting periods beginning on or after 6 April 2025, a company generally qualifies as small when it meets at least two of three size tests relating to turnover, balance sheet total and employee numbers.
The current thresholds are turnover of no more than £15 million, a balance sheet total of no more than £7.5 million and an average of no more than 50 employees.
Micro-entities operate under much lower thresholds.
For accounting periods beginning on or after 6 April 2025, the relevant limits include turnover of no more than £1 million, a balance sheet total of no more than £500,000 and no more than 10 employees, with at least two conditions normally needing to be met.
Companies close to these thresholds should therefore monitor their position.
Growth may change the reporting regime that applies.
Management should not assume that a company will always qualify for the same exemptions simply because it qualified in the previous year.
Abridged accounts are also disappearing
The profit and loss requirement is part of a wider reform.
From April 2028, the option to file abridged accounts is also being removed.
That matters because some small companies currently use abridgement to reduce the level of detail in the accounts filed at Companies House.
The direction of travel is therefore towards more standardised information being supplied to the registrar.
At the same time, the option to restrict public publication of the profit and loss account acknowledges the privacy concerns of smaller businesses.
The result is a compromise.
Companies House receives more consistent information.
Businesses retain some protection over particularly sensitive information.
For accountants advising small companies, both sides of that change need to be understood.
Software filing changes the control environment too
From April 2028, Companies House also intends annual accounts to be filed through commercial software.
This is connected to the wider effort to improve the quality and usability of company data.
It also changes the practical filing process.
Companies and their accountants will need systems capable of generating and submitting the required information correctly.
That creates implementation risk.
Fields need to map correctly.
Accounting classifications need to be consistent.
The submitted information needs to agree with the underlying accounts.
Access to the software needs to be controlled.
Responsibility for reviewing the submission needs to be clear.
A digital filing process can reduce manual errors, but it can also allow incorrect information to be transmitted quickly if controls are weak.
Automation does not remove the need for review.
The board still owns the filing
Many small companies rely heavily on an external accountant.
The accountant may prepare the accounts, calculate the corporation tax and handle the Companies House filing.
That does not mean directors can completely ignore what is being submitted.
Directors remain responsible for the company’s accounts.
The move towards more detailed digital filing should encourage boards to understand the information leaving the business.
Management should know whether the company qualifies as small or micro.
It should understand whether the profit and loss account will be published.
It should know who has authority to select any available privacy option.
It should also make sure the filed information agrees with the approved accounts.
Outsourcing preparation does not outsource responsibility.
The opt-out decision should be deliberate
Once the detailed publication rules are confirmed, companies should not treat opting out as an automatic administrative preference.
The decision deserves thought.
Some companies may have obvious commercial reasons for keeping the information off the public register.
Others may gain more from transparency.
Management should consider who uses the company’s accounts and how public information affects relationships with banks, suppliers, customers, investors and employees.
The decision should also be consistent.
Repeatedly changing between publication and non-publication without a clear reason may attract questions from users.
That does not mean a policy can never change.
It means management should understand why the choice is being made.
Public information is not the only information creditors use
Small companies sometimes assume that keeping the profit and loss account away from the public register prevents lenders or suppliers from understanding their financial performance.
That is not necessarily true.
Banks may receive management accounts directly.
Credit insurers may gather information from several sources.
Suppliers can review payment behaviour.
HMRC receives tax information.
A potential purchaser may request detailed financial information during due diligence.
The Companies House register is therefore only one part of the information environment.
The reform changes who receives statutory financial information automatically.
It does not eliminate the many other ways financial information is shared.
This is another useful SBR principle.
Reporting decisions should be considered from the perspective of different users rather than assuming there is one universal audience.
Better data can improve access to finance
One argument in favour of greater transparency is that information reduces uncertainty.
A lender assessing a small company has to judge whether the business can repay borrowing.
Where little financial information is available publicly, the lender may need to request additional evidence or price uncertainty into its lending decision.
More complete information can potentially make assessment easier.
A strong and profitable small business may benefit from that.
The same can apply to trade credit.
A supplier deciding whether to offer 30 or 60 day terms wants evidence that the customer is financially sound.
Clearer reporting can support that assessment.
This does not mean publishing more information automatically produces cheaper borrowing.
Many factors affect credit decisions.
It does show why transparency can create economic benefits as well as privacy concerns.
The reform also creates an ethical question
Suppose a small company’s directors strongly oppose the new filing requirement.
They ask their accountant whether a particular expense can be moved into the following year so that the filed profit looks stronger.
The motive may be commercial rather than fraudulent.
The accounting problem remains.
Financial information should reflect the transaction according to the applicable reporting rules.
The professional accountant should not manipulate recognition simply because information may become available to regulators or the public.
Another issue could arise if directors deliberately provide incomplete information because they believe the profit and loss account will not be published.
Again, publication is irrelevant to accuracy.
Filed information still needs to be correct.
This distinction could make a strong ethics point in an ACCA scenario.
Confidential does not mean optional.
What this could look like in an SBR question
Imagine a small private company whose directors are concerned about competitors seeing its margins.
The finance director proposes omitting the profit and loss account from the 2028 Companies House filing as the company has done previously.
The company also intends to continue filing abridged accounts.
A professional adviser should identify that the filing regime is changing.
The company will need to deliver the profit and loss account under the new requirements, and the abridged accounts option is being removed.
However, management may be able to opt out of public publication of the profit and loss information.
The adviser should then distinguish compliance from privacy.
The required information must still be filed accurately.
The company can then assess whether the publication opt-out is appropriate once the detailed mechanism has been confirmed.
That is more useful than simply telling management that Companies House rules have changed.
Avoid overstating the reform in an exam
Current issues answers often become inaccurate because candidates simplify a nuanced development.
For this topic, the dangerous statement would be:
“From 2028, every small company’s profit and loss account will become public.”
That is not the current position.
The requirement is to file the information.
Small companies and micro-entities are expected to have the option to prevent their profit and loss information being published on the public register.
The details of how that opt-out will operate are still due to be confirmed.
That distinction is exactly the sort of precision an SBR answer should demonstrate.
Where rules are still developing, say so.
Do not convert an announced policy into a requirement that has not yet been finalised in detail.
This is really a debate about who financial reporting is for
Behind the administrative changes sits a bigger question.
Who should have access to company information?
Shareholders need information.
Lenders need information.
Tax authorities need information.
Regulators need information.
Law enforcement may need information.
Potential suppliers and customers may also find financial information useful.
But small private companies can have legitimate interests in protecting commercially sensitive information.
Good reporting policy has to balance those needs.
Complete secrecy can reduce accountability.
Unlimited publication can impose disproportionate costs or commercial risks.
The 2028 approach attempts to sit between the two.
The information reaches Companies House.
Public disclosure can still be restricted for qualifying companies.
Whether that balance works well in practice will depend partly on the detailed rules that follow.
What small companies should be doing now
April 2028 is not tomorrow, but businesses should not ignore the change until the first affected accounts are ready to file.
Directors should understand whether the company qualifies as small or micro.
They should confirm whether existing accounting software will support the future Companies House filing requirements.
They should identify who will manage the filing process.
They should also consider their likely position on publication of the profit and loss account.
Companies using very simple bookkeeping systems may have more preparation to do than businesses already filing through sophisticated accounting software.
Accountants should also be updating their own processes.
Clients will need clear explanations because many small company directors will hear only part of the story and assume that all their profit figures are suddenly becoming public.
Accurate advice will matter.
What candidates should take from the reform
This is not a topic that requires pages of Companies House procedure.
The stronger SBR lesson is about reporting objectives.
Why does the regulator want more information?
Why might a company object to publication?
Who benefits from transparency?
What commercial harm could disclosure create?
How can the system improve enforcement without unnecessarily exposing sensitive business information?
Those questions turn a filing reform into a proper corporate reporting discussion.
Candidates using an ACCA SBR course should practise making those connections rather than memorising a list of dates and filing requirements.
Current issues marks usually come from explaining why a development matters, not simply knowing that it happened.
Small company accounts are becoming more visible to the system
The clearest way to understand the 2028 change is not to say that every small company’s profits are becoming public.
They are becoming more visible to the reporting system.
Companies House will receive information that many small companies currently do not have to deliver.
HMRC and authorised enforcement bodies will have access.
The public position is more restrained because qualifying companies will be able to prevent the profit and loss account from being published.
That compromise reflects the real tension at the heart of small company reporting.
Transparency has value.
Privacy has value too.
The challenge is deciding who genuinely needs the information and what they should be allowed to do with it.
For accountants, that makes the reform more interesting than a filing deadline.
It is a practical example of financial reporting trying to balance accountability, economic crime prevention, access to finance and legitimate commercial confidentiality.
And that is exactly the kind of current issue SBR candidates should learn to analyse rather than simply memorise.
