This year revised financial reporting requirements will affect information filed by small businesses.
Simplified financial reports
Small companies can submit simplified financial reports. Changes to UK regulations in December 2024 increased the thresholds for qualification as a small company. This means more companies were eligible for simplified reports after 6 April 2025. This could apply to you if your company or LLP meets some key requirements for two consecutive years.
Turnover of £15million or below
Balance sheet total of £7.5million or below
Number of employees on average is 50 or fewer.
Financial reporting standards
Updates to financial reporting standards for the UK change from 1 January 2026. These include:
A single lessee model for comparability.
Changes to ‘fair value’ to align with International Financial Reporting Standards.
Requirements to disclose material accounting policies for revenue recognition and leasing.
Disclosures about going concerns.
European Law has limited disclosure requirements for small businesses. However, following Brexit new rules now require extra disclosures to provide a ‘true and fair’ view of a business. This includes:
A statement of compliance.
‘Going concern basis’ disclosures.
Disclosures of dividends paid and payable.
Other reporting changes for small businesses
Related party transactions. Small companies now have the same exemptions as larger businesses. For example, you won’t have to disclose transactions between wholly owned members of a group of companies.
Management (director) compensation. Small companies don’t have to disclose director’s compensation. However, Company Law requires financial statements to provide a true and fair view of a business, which may apply to compensation.
New leases. Companies must provide descriptions of significant leasing arrangements including extra costs, discount rates, associated expenses and commitments.
Contingencies and tax. All companies must now disclose provisions, contingencies and deferred taxation.
Revenue contracts. Small companies must declare whether they meet the performance obligations in revenue contracts including significant payment terms, and the nature of the goods or services.
Share based payments. Small companies must describe share based payment arrangements for employees or directors and their impact on profits.
Transparency in reporting
Changes continue due to economic crime legislation, including a new identity verification process at Companies House.
By Spring 2026 Companies House will check the identity of people filing compulsory documents. Agents filing on behalf of your company must register as Authorised Corporate Services Providers (ACSPs). Only an ACSP can make submissions for disqualified directors, with some exemptions.
By the end of 2026 Companies House will require all limited partnerships to submit additional information. Everyone affected must also complete the identity verification process.
Please get in touch if you would like to know more about the revised reporting requirements for small companies.
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