The government has published a 12-week consultation on its Modernising Corporate Reporting (MCR) programme, describing it as a “once-in-a-generation opportunity” to reset the framework. It is inviting views on a sweeping package of reforms that could reshape corporate reporting in the UK for decades to come.

Designed to support economic growth and strengthen the UK's international competitiveness, the proposals cover almost every aspect of the annual report and accounts, including:

• financial reporting,
• non-financial reporting,
• corporate governance,
• remuneration reporting, and
• the wider reporting framework.

The government is asking how reporting requirements can be simplified and made more proportionate by:

• clarifying the purpose of corporate reporting,
• rationalising thresholds and exemptions,
• reducing unnecessary duplication, and
• embracing digital reporting. 

“ICAEW has long been calling for the purpose and audience of a company's annual report and accounts to be clarified,” said Sally Baker, Corporate Reporting and Governance Director in welcoming the consultation’s publication.

“Corporate reporting is core to being a Chartered Accountant and a clear articulation of purpose will be the bedrock on which the rest of the UK's corporate reporting framework can rest.”

Reviewing the UK corporate reporting framework

The proposed reforms are driven by concerns that existing UK reporting requirements have expanded over time, often in response to specific policy objectives, creating a framework that can be complex, costly and difficult for companies to navigate.

Through the MCR programme, the government is taking a step back to consider how reporting obligations can be simplified, modernised and made more proportionate, while continuing to provide high-quality information for investors and other stakeholders.

The consultation closes on 30 November 2026.

Key proposals

Clarifying the purpose of corporate reporting

The government proposes to reaffirm that annual reports and accounts are primarily intended to meet the information needs of investors and creditors.

It believes a clearer statement of purpose will help guide future reporting requirements and support more focused, decision-useful disclosures.

Reforming the financial reporting framework

The consultation includes proposals aimed at making the UK's financial reporting framework clearer and more coherent. These include:

• moving detailed reporting requirements from company law into accounting standards,
• streamlining the range of accounting standards available to UK companies,
• developing a dedicated standard for not-for-profit entities, and
• reforming the framework for micro-entities.

The government is also consulting on replacing the current distributable profits and capital maintenance regime with a solvency-based approach.

Simplifying thresholds, exemptions and reporting requirements

A major focus of the consultation is the framework that determines which reporting requirements apply to different companies.

The government is proposing to simplify company size categories, thresholds and exemptions, while exploring whether certain exemptions currently available to small companies should be extended to medium-sized companies.

This includes considering whether some medium-sized companies should qualify for exemption from audit.

The consultation seeks views on the value of existing non-financial reporting requirements for private companies and whether a new "very large" company category should be introduced for certain reporting obligations.

Alongside this, the government is proposing to streamline strategic reporting requirements by reducing prescriptive disclosures and giving companies greater flexibility in how they explain their performance, strategy and governance.

Proposals in this area build on the government's earlier announcement that medium-sized private companies will be exempt from preparing a strategic report, alongside the removal of the requirement to prepare a directors' report for all UK companies.

Streamlining governance and remuneration reporting

Changes to governance and remuneration reporting are considered, including reviewing whether the scope of existing remuneration reporting requirements remains appropriate and simplifying disclosures where possible.

Digital reporting and future-proofing the annual report

Recognising the increasing role of technology in corporate reporting, how reporting can become more accessible, timely and effective in a digital environment also feature.

Proposals include:

• expanding the use of electronic tagging,
• making greater use of digital communications and online reporting, and
• exploring whether certain information could be made available outside the traditional annual reporting cycle. 

The creation of a new ‘Reporting Gateway’ within the Department for Business and Trade is also proposed. Its creation aims to help ensure future reporting requirements are coherent, proportionate and cost-effective.

ICAEW engagement and next steps

Responses to the consultation will inform the next phase of reform and could shape the future of UK corporate reporting for many years to come.

ICAEW will engage with members and other stakeholders to better understand the practical implications of the proposals for preparers, investors and other users of corporate reporting.

Baker confirmed: “We look forward to debating these reforms with our members and member firms in the coming weeks and providing government with the views of the ICAEW Chartered Accountants working both in, and with, British businesses.”

Given the scale of the proposed reforms and their potential impact on companies of all sizes, members are encouraged to review the consultation and share their views with ICAEW to help inform our response before the consultation closes on 30 November 2026. Views can be emailed to crf@icaew.com