Corporate reporting reform, what the 2026 consultation means for your company
Overview
The Government opened its Modernising corporate reporting consultation on 7th September 2026. It seeks views on simplifying company reporting, widening appropriate exemptions and making greater use of digital communications.
The consultation closes at 11:59pm on 30th November 2026. As at 14th October 2026, its proposals are not new reporting rules that companies can already apply. Continue following the legislation and accounting standards applicable to your financial year.
The Government’s announcement refers to more than £450 million in estimated annual savings from earlier reforms, with further savings expected from the wider programme. This is not a guaranteed saving from the September consultation or a promised reduction in each company’s accountancy fees.
Detailed content
1. What is being considered?
The review covers financial and non-financial reporting, corporate governance, directors’ remuneration reporting and digital communications. It is relevant to companies of different sizes, not only small businesses.
The aim is to reduce unnecessary complexity while preserving information that investors, creditors and other users need. Businesses and advisers can respond with examples of duplication, costs and useful disclosures.
2. Why does reporting need reform?
The Government cites research showing some annual reports and accounts average around 98,000 words, longer than The Hobbit. This illustrates the wider reporting burden; it is not a typical length for a small company’s accounts.
Shorter reports are not automatically better. The objective is proportionate, understandable information rather than removing useful financial transparency.
3. Could small and medium-sized companies get simpler accounts?
The consultation considers a broader SME reporting framework and a dedicated SME accounting standard. It also explores changing how company law and accounting standards interact, including the statutory “true and fair” requirement for eligible SMEs and the existing approach for micro-entities.
These are significant proposals, not permission to stop complying with current accounting requirements. Eligibility, exclusions and final standards would need to be established before a company changes its approach.
4. What about directors’ reports and strategic reports?
The wider reform programme includes previously announced plans to remove the directors’ report requirement and extend strategic-report exemptions, including for most medium-sized private companies. Some existing disclosures would be removed and others relocated.
The September consultation also explores more principles-based strategic reporting. Do not omit a report or disclosure simply because its removal has been announced. Confirm the applicable legislation, commencement date and accounting period first.
5. What does digital reporting mean?
The consultation explores digital communications with shareholders, electronic tagging, website or portal reporting and virtual annual general meetings with appropriate shareholder consent.
This is broader than a promise to eliminate duplicated Companies House forms. It does not itself change filing deadlines or remove existing filing obligations. Directors remain responsible for compliant accounts and submissions, even when an accountant prepares them.
6. Could more companies be exempt from audit?
One proposal is to extend the small-company audit exemption to eligible medium-sized companies as part of the SME framework.
Separately, company-size thresholds have already increased for financial years beginning on or after 6th April 2025. Under the current small-company audit exemption, the headline tests are at least two of:
turnover no more than £15 million;
balance sheet total no more than £7.5 million;
an average of 50 or fewer employees.
Meeting these figures alone does not guarantee exemption. Group rules, eligibility restrictions, size-category transition rules, the company’s articles and qualifying shareholder requests must also be considered. Lenders or contracts may require an audit even where statutory exemption is available.
7. Are dividend rules also under review?
Yes. The consultation explores replacing the existing distributable-profits and capital-maintenance framework with a solvency-based regime.
This is a proposal only. A company cannot currently pay dividends simply because it has cash available or expects to remain solvent. Continue checking distributable profits and complying with existing dividend rules.
8. When could changes take effect?
There is no confirmed general commencement date for the September consultation proposals. Different measures may follow different legislative or standard-setting processes and may include transitional rules.
The consultation does not itself change Corporation Tax, HMRC return deadlines, Companies House filing deadlines or record-keeping duties. Sole traders and landlords operating personally are not directly subject to limited-company accounts rules.
Step-by-step procedure
Confirm your company’s current size category, group position, audit requirements and filing timetable.
Identify changes already in force for your financial year, separately from consultation proposals.
If you wish to respond, use the official consultation page and submit evidence by 11:59pm on 30th November 2026.
Continue preparing compliant accounts, retaining records and meeting filing deadlines.
Monitor the Government response, legislation, accounting standards and commencement arrangements.
Discuss any confirmed changes with your accountant before altering accounts, disclosures, audit arrangements or dividend procedures.
Frequently asked questions
Is the £450 million saving guaranteed?
No. It is an estimated annual saving associated with earlier reforms, referenced in the announcement. It is not a guaranteed saving from this consultation or for an individual business.
Is the consultation already law?
No. Its proposals are not rules companies can already use. However, separate changes, such as the increased company-size thresholds, are already in force for relevant financial years.
When does the consultation close?
At 11:59pm on 30th November 2026. The official GOV.UK page provides response instructions.
Will new rules start in 2027?
No general start date has been confirmed. Check the final legislation and any transitional arrangements rather than assuming a 2027 implementation date.
Will every small company get simpler accounts or avoid an audit?
Not necessarily. Existing and future exemptions depend on eligibility and exclusions. Your accountant should check the company and any group before applying them.
Do filing deadlines change now?
No. The consultation does not change current deadlines. Late filing penalties can still apply.
How can 360 Accounts help?
360 Accounts & Bookkeeping can help you meet current obligations, check existing exemptions and assess the practical impact of confirmed reforms on your company.