Small companies and micro-entities will have to file a profit and loss account with Companies House under the new Economic Crime and Corporate Transparency Act (ECCTA).

Small companies will also have to file a director’s report and the option to file abridged accounts will be removed. No commencement date has been set and the form and content of the profit and loss account are yet to be set out in regulations. Companies House has promised to give fair notice of the changed requirements.

Fraud prevention measures

The aim of the change, and other measures in the ECCTA, is to achieve a more reliable and accurate companies register and greater transparency, with a view in particular of preventing fraud and money laundering. To help small companies concerned about sensitive trading information becoming publicly available, especially to competitors, the Act includes provisions allowing the Registrar to make their profit and loss accounts unavailable for public inspection.

Also in the ECCTA, but coming into force later, is the introduction of identity verification for new and existing company directors, people with significant control and those delivering documents to the registrar. 

Scope extends further

Other measures, such as greater investigation powers for Companies House, better cross-checking of data with other bodies and more stringent checks on company names, will start sooner. Not in the ECCTA but planned are mandatory digital filing and full tagging of financial information in iXBLR format.