Companies House have recently confirmed that the rules for filing company accounts are changing.
This is part of the Economic Crime and Corporate Transparency (ECCT) Act 2023.
Previously, Companies House (unlike HMRC for instance) have permitted filing paper accounts. From 1 April 2028 however all company accounts will need to be filed used commercial software which can use iXBRL format.
Secondly, which is relevant to small and micro companies, all companies will be required to file profit and loss accounts. There will however be an option for small and micro companies to opt out from publishing the profit and loss account on public record, so the impact of this will be limited.
What does this mean for companies in the NFP sector?
NFP Companies (particularly but not exclusively charities) commonly include the accounts and director or trustee report within a “glossy” Annual Report to publicise the work they carry out, often with photos and infographics. Commonly, they also prepare their own accounts in Word or Excel or using publishing software such Adobe or Canva.
Anything prepared will however now need to be capable of being converted to an iXBRL format. This is perfectly feasible, and larger charitable companies have been doing this for a while, but smaller companies will need to be aware of and prepare for the change.
Companies House publish a list of Software providers who may be able to assist with this process. It has to be borne in mind that many of these suppliers are geared to filing normal trading company accounts, but NFP entities often need to prepare accounts in line with the appropriate SORP (Charities, Academies, Registered Social Landlords etc) which differ from typical companies in many ways. There is often also an element of customisation of standard formats. Not all of these providers may be suitable. Menzies are however able to carry out this exercise for you.
Filing pictures and infographics using iXBRL can be time-consuming and difficult so there may be some merit in having different “compliance” accounts without graphics and separately a full set of accounts for stakeholders and funders with the additional material. The filing version of the accounts does however need to be able to stand alone.
If companies are used to filing paper accounts directly with the Registrar they will now need to file these electronically and set up a Companies House presenter account to facilitate this.
Smaller NFP sector companies need to be aware of the changes in respect of filing profit and loss accounts. Commonly, registered charities have filed the full accounts (as these are on public record with the Charity Commission anyway) but non-charitable companies and entities such as trading subsidiaries need to be aware of the change and prepare for this.
Implementation was originally to be from 1 April 2027, but this has been postponed for twelve months to 1 April 2028 giving companies an extra twelve months to prepare for the change.
How Can Menzies Help?
Preparing for the new filing requirements doesn’t need to be complicated. Whether you’re filing accounts for a charity, academy, housing provider or other not-for-profit organisation, Menzies can support you with compliant account preparation and digital filing.
Speak to one of our not-for-profit specialists today.
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