Receiving Royal Assent in October 2023, the Economic Crime and Corporate Transparency Act 2023 (ECCT Act or “the Act”) contains several packages of reform aimed at tackling money laundering and other illicit activity. The Act also aims to support the economy by providing more, and better quality, information to inform business transactions and lending decisions.
One of three major packages being introduced is “accounts reform”; changes to the preparation and filing requirements of accounts at Companies House. In the summer of 2025, Companies House announced these changes would take effect from 1 April 2027.
Despite Government and the accountancy profession having worked hard to raise awareness of the expected changes, the announcement generated concern among many smaller businesses and their advisors. Hearing the response, and together with the government’s Department for Business and Trade (DBT), Companies House paused to take stock and engage with stakeholders. Companies House expressed their readiness to ensure any changes struck the right balance between tackling economic crime and avoiding undue burden on business.
Companies House has now formally confirmed that the planned changes to filing requirements will not be taking effect from 1 April 2027. It has also confirmed that, as was done initially, companies will still be given 21 months’ notice to prepare. Communication of a new implementation date can therefore be expected in due course.
What is due to change?
The Act simplifies and streamlines filing options for small companies and micro-entities. Small companies will be required to file both their profit and loss account and directors’ report. Micro-entities will be required to file their profit and loss account but will continue to have the option to not prepare or file a directors’ report. It’s worth noting however, that since publication of the Act, the UK Government has announced their aim to remove the requirement for any company to produce a Directors’ Report.
While the Act requires small companies and micro-entities to file their profit and loss accounts, it includes a regulatory power that enables these profit and loss accounts, or parts of them, to not be made available for public inspection. Exercise of this power will be subject to Regulations being passed by Parliament. How, or in what circumstances, this provision might be applied in practice is still being considered.
Directors of a company claiming an audit exemption will be required to provide an enhanced statement on the balance sheet. As well as declaring that an exemption is being taken (as required currently), the statement will additionally need to identify the exemption being taken and include confirmation that the company qualifies for it. This will apply to all companies claiming an exemption, including dormant companies.
The ECCT Act has also amended the powers of the Registrar of Companies, paving the way for Companies House to require all accounts to be filed using commercial software in future. The mandation of software-only filing was included in the changes announced previously and should be expected to still be part of future changes.
Interaction with the Modernisation of Corporate Reporting programme
Announced by the UK government in October 2025, the Modernisation of Corporate Reporting programme will be a holistic review of the entire annual report and accounts. The programme will begin with a wide-ranging consultation, expected shortly. The consultation will test the purpose of reporting and explore ways to simplify the current categorisation of companies and their corresponding reporting requirements, including for small and micro entities. Proposals within the consultation, and any subsequent outcomes, will need to take into consideration the ECCT Act. For example, with the need for transparent financial information to help tackle economic crime, it’s unlikely the MCR programme would go so far as to suggest smaller companies do not need to file accounts on public record. Conversely, measures being implemented under the ECCT Act need to be cognisant of the government’s growth priority and current deregulatory mindset. Any cost burden of introducing software-only filing, for example, needs to be balanced with the Act’s objective of improving the accuracy and integrity of financial information on the register.
The rest of the Act
Besides the accounts reform aspects, the ECCT Act contains two other main packages of reform. Taking effect from March 2024, the first set of measures gave Companies House new and enhanced powers to improve the quality and reliability of its data and tackle the misuse of the companies register. Companies House were given greater powers to query and remove factually inaccurate information from the register. Stronger checks on company names were introduced alongside new requirements for registered office addresses. Companies are now also required to confirm their intended future activities are lawful and to supply an email address that Companies House can use to communicate with the company.
The second package is compulsory identity (ID) verification of anyone setting up, running or controlling a UK company. Implementation of ID verification began in November 2025, marking the start of a 12-month window for existing directors and persons with significant control to verify their identity. Individuals are able to verify their identity either directly with Companies House or through an Authorised Corporate Service Provider (ACSP). ACSPs are individuals or organisations that undertake anti-money laundering supervised activity and might include company formation agents, solicitors and governance professionals, as well as accountants. Additional guidance and specialist support, including consideration of reasonable adjustments where required, is available from Companies House.
The next milestone within this package will be no earlier than November 2026, when new filing restrictions come in. This includes requiring those filing information with Companies House to be identity verified or registered as an ACSP (also referred to as a Companies House authorised agent). The restrictions vary depending on if the filing is on behalf of an individual or a firm. If filing for an individual, the filer must be identity verified, an ACSP or an officer or employee of an ACSP. If filing for a firm, the filer must be either an identity verified employee/officer of the firm (or of a corporate officer of the firm), an ACSP or an officer or employee of an ACSP.
Any practitioner acting as an ACSP, whether for identity verification or for filing accounts on behalf of clients, should ensure their engagement letters are updated to reflect this role and there are dedicated ACSP schedules and supporting guidance in the ICAEW Engagement Letter helpsheet.
Staying up to date
The ECCT Act introduced the biggest changes to Companies House since corporate registrations were established in 1844. With secondary legislation required to bring many of the changes into effect, implementation was always expected to be rolled out in a phased approach over a number of years. As has been demonstrated with the accounts reform measures, Companies House are also listening to stakeholder feedback during implementation and are committed to upholding the integrity and effectiveness of the legislation. Given the scale of the changes, it is not surprising that timelines need to adjust.
The government’s outline transition plan sets out the intended timetable and Companies House are also keeping stakeholders informed through their Changes to UK company law website. ICAEW is closely monitoring developments and will be keeping members up to speed with developments throughout.
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