Alejandro Gonzalez
3 min read
Thousands of UK small and medium-sized enterprises (SMEs) are bracing for regulatory changes that will force them to reveal detailed financial information, prompting fears of competitive harm and disruption across key sectors.
From April 2027, all limited companies — including small firms and micro-entities — will be required to submit full profit and loss (P&L) statements to Companies House under reforms introduced by the Economic Crime and Corporate Transparency Act 2023. This ends the long-standing option for SMEs to file abridged or “filleted” accounts, which previously allowed them to keep key financial metrics private.
The government says the changes are aimed at tackling fraud and improving corporate transparency. However, SME leaders warn the reforms could severely impact smaller firms’ ability to compete, especially in sectors where client perception and financial discretion are critical.
Martin McTague, national chair of the Federation of Small Businesses (FSB), criticised the move, saying it “opens the door wide to competitors snooping on margins and for large companies in supply chains to scrutinise smaller suppliers’ finances.” He warned that the reforms may “give big players an unfair advantage and damage small firms’ negotiating power,” potentially stifling growth and innovation in the process.
The changes are especially troubling for SMEs in competitive, client-focused sectors such as professional services. Firms operating as limited companies or LLPs will be subject to the new reporting rules. Industry observers said many of these businesses have relied on the ability to present a strong public image while keeping key financial details, like profit margins and internal performance, confidential.
In addition to expanding financial disclosures, Companies House has confirmed that all annual accounts must be filed using commercial software from April 2027. The current web-based and paper submission routes will be phased out.
Companies House described the switch as “a critical step in improving the accuracy and quality of data on the register by reducing errors and formatting issues.” It also expects the move to accelerate processing times and enhance its ability to detect and prevent fraud.
The reforms will apply to all companies filing with Companies House, including:
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Small companies (with turnover under £15 million and fewer than 50 employees), which will be required to file their P&L statement, directors’ report, and balance sheet.
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Micro-entities (with turnover under £1 million and fewer than 10 employees), which must file both a balance sheet and a P&L for the first time.
