Implementing the ECCT 2023: What the New Accounts Filing Rules Mean for Your Business

Since its founding in 1844, Companies House has served as the UK’s official registrar of companies. Over time, legislation such as the Companies Act 2006 has shaped how companies report financial information. Now, the Economic Crime and Corporate Transparency Act 2023 (ECCT) introduces sweeping reforms aimed at improving transparency, tackling economic crime, and modernising corporate reporting.

One of the most significant changes is how companies file their annual accounts with Companies House.

Software-Only Filing of Accounts

From 1 April 2027, all companies will be required to file their annual accounts using commercial software. This marks the end of paper and web-based filing routes for account submissions.

• Applies to all limited companies, whether accounts are filed by directors or accountants.
• Dormant companies are included in the requirement.
• Other filings (e.g. confirmation statements) may still be submitted via paper or web, though this may change in future reform.

Companies House is contacting registered email addresses to give businesses 21 months to prepare. Most companies can transition now, as compliant software is already available.

Accounting Reference Period Restrictions

Currently, companies can shorten their accounting reference period as often as they like. Under the ECCT:

• Companies will be limited to shortening the period once every five years, unless a valid business reason is provided.
• This aligns with existing restrictions on extending the period.
• Acceptable reasons may include:
  • Administration
  • Alignment with a UK-based parent or subsidiary
  • Secretary of State approval
  • Filing on behalf of an overseas company

Company accounts reflect financial performance over a fiscal year. All limited companies must file accounts with Companies House—whether trading, dormant, profitable, or loss-making.

Required components typically include:

Failure to file accounts on time can result in financial penalties.

There are many different types of accounts that can be prepared based on several factors, including turnover, number of employees etc. These account types have evolved over the years, and there are further tweaks being introduced under the ECCT.

Filing Options for Small Companies and Micro-Entities

Small Companies

A company qualifies as “small” if it meets any two of the following:

• Turnover ≤ £10.2 million
• Balance sheet total ≤ £5.1 million
• ≤ 50 employees

From April 2027, small companies must file:

• Balance sheet
• Profit and loss account
• Directors’ report
• Auditor’s report (unless exempt)

The option to file abridged accounts will be removed.

Micro-Entities

A company qualifies as a “micro-entity” if it meets any two of:

• Turnover ≤ £632,000
• Balance sheet total ≤ £316,000
• ≤ 10 employees

Micro-entities will now be required to file:

• Balance sheet
• Profit and loss account

They do not need to file a directors’ report, and the ECCT includes a provision allowing profit and loss accounts to be withheld from public view, subject to future regulations.

Claiming an Audit Exemption

Companies may qualify for audit exemption if they meet any two of:

• Turnover ≤ £10.2 million
• Assets ≤ £5.1 million
• ≤ 50 employees

Other exemptions apply to dormant companies and subsidiaries.

New requirement: Directors must include a statement on the balance sheet identifying the exemption claimed and confirming eligibility. This aims to deter misuse and support enforcement.

These changes signal a broader shift toward fully digital corporate reporting. Businesses should:

• Review current filing methods and transition to compliant software.
• Ensure directors and accountants are aware of new obligations.
• Consider platforms like Xero, which support direct submission of accounts to Companies House.