Companies House to require accounts filed by software only

Sara White, Editor, Business & Accountancy Daily. Croner-i

All accounts will have to be filed at Companies House using commercial software from April 2027 as paper filings will no longer be allowed.

The major change to filing requirements will see Companies House require fully digitised accounts from 1 April 2027. This means all companies will have to use accounting software to submit final accounts, starting for businesses with year ends of 31 July 2026, affecting over 400,000 companies.

Companies House has always said it would give companies at least 18 months’ notice about the end to paper returns.

All company directors have been sent an email by Companies House stating setting out the changes, which stated: ‘We’re contacting you now to give you plenty of time to prepare – you’ll have one full accounting year, plus nine months, to make the switch (a total of 21 months).

‘If you already file your accounts using software, you do not need to take any action.’

The email also stressed that ‘the move to software filing is a critical step in improving the accuracy and quality of data on the register by reducing errors and formatting issues. It will also speed up processing times and help Companies House detect and prevent fraud more effectively’.

Currently 91.4% of accounts are filed electronically using accounting software, leaving nearly 8% of companies still submitting paper accounts in 2023-24, although this figure has improved from just 85% before the pandemic, the latest available Companies House data showed. There are currently 4.87m companies on the register, with 98% up to date with filing. The latest figures showed that 418,820 companies still file accounts on paper.

This applies to directors who file accounts themselves, and companies who use third party agents or accountants to file their annual accounts. At the same time, it will no longer be possible to file abridged accounts.

It will not affect other Companies House filings such as confirmation statements and change of director appointments and notifications. 

The new requirement is part of the Economic Crime and Corporate Transparency Act 2023, designed to improve transparency and reduce fraud by making more financial information available to the public.  

On the end of paper accounts, Companies House has now told all registered companies on the register about the move to digital filing with emails all sent out by 1 July. 

Companies House said: ‘As part of our journey to modernise and digitise our filing routes, all accounts must be filed using commercial software from 1 April 2027.

‘We are contacting the registered email address of all companies on our register, allowing time to prepare for this change.’

Under the new rules, all accounts filings made on and after 1 April 2027 must be filed using commercial software. This includes dormant accounts.

The web and paper routes will be closed for accounts filings but will remain open for other statutory filings.  

Companies House added: ‘This change will allow more efficient and secure filings for companies, and will be a critical step towards improving the quality of the data on the register.

‘Software-only accounts filing will create a single, cost-effective, sustainable and traceable way to file.’

To comply with these changes, all companies will need to find a suitable software product before web-based and paper filing options are no longer available. 

Companies House stressed that ‘companies can make the change now as commercial software is already available.  There are many software providers who offer a range of accounting packages to prepare and file accounts.’ 

The move comes as small and micro companies have been told they will have to file profit and loss (P&L) and balance sheet information from the same date in April 2027, although there are reports the government is planning to shelve this plan as it will increase costs and red tape for businesses.

However, the Department for Business & Trade told Business & Accountancy Daily last week that it was their ‘intention’ to go ahead with the new filing requirements from 1 April 2027 for small and micros, adding ‘from that point the intention is that they will be required to provide a profit & loss statement, using the formats set out in Financial Reporting Standards and subject to forthcoming Regulations’.

Companies House has already sent out letters to all companies affected informing them of the upcoming filing changes.

Under the plans, companies will also no longer be allowed to prepare and file abridged accounts.

Companies House was unable to confirm as yet whether there will be any exemptions, even if tightly limited from the digital filing requirement, as there are for Making Tax Digital (MTD) reporting at HMRC.