The government is still considering plans to tighten reporting requirements for small and micro businesses and ministers have yet to decide whether to push ahead with rules that would require them to publish profit and loss accounts for the first time.
In an interview with The Times, Blair McDougall, the new small business minister, said “all options are on the table” as officials weigh the balance between fighting fraud and protecting small businesses from unnecessary red tape.
“There are obviously different arguments in terms of the impact of their exposure on businesses, particularly SMEs, and on people who are concerned about financial crime and everything else,” McDougall said. “We’re balancing that at the moment and discussing it.”
Under plans announced by Companies House in June, companies classified as “small” or “micro” would lose the right to file short financial statements from April 2027. Instead, they would have to provide full profit and loss statements disclosing sales and profits.
The move was part of the Economic Crime and Corporate Transparency Act, which aims to reduce fraud and improve the accuracy of information filed with Companies House. However, just days after the announcement, the Ministry of Economy and Trade announced a pause in the rollout as business groups feared the new rules would increase bureaucratic burdens and risk the disclosure of commercially sensitive data.
If implemented, the reforms would affect companies with turnover below £10.2 million, balance sheets below £5.1 million and employing fewer than 50 people. They would also require all companies to file their accounts digitally using commercial software, eliminating the use of paper and web-based filings.
The proposals were first consulted on in 2019 and came into force in 2023 under the previous Conservative government. Business groups have widely advocated for greater transparency but warned that the changes could discourage entrepreneurship by exposing small businesses’ financial information to competitors.
McDougall, who became an MP in 2024 and took up his first ministerial post in September, said the government’s focus was on building economic confidence and long-term growth rather than accelerating reforms.
He added that success will be measured by how well the government implements its Small Business Plan and Industrial Strategy, both of which were launched earlier this year. “We have a terrible history in government of releasing these PDFs and then collecting dust,” he said.
McDougall was speaking during International Trade Week at the Great British Pitch, an event organized by Small Business Britain that brought together entrepreneurs and international buyers. He said such initiatives were key to raising the profile of UK SMEs and driving export-led growth.
The final decision on Companies House reforms is expected early next year, with officials pointing out that ministers are still considering the regulatory impact on smaller companies before confirming the 2027 timetable.
