£450m a year of reporting to be stripped from companies

On 6 September the government announced an overhaul of corporate reporting rules. The promised saving for business is more than £450 million a year, with a further £230 million from scrapping the directors’ report and widening exemptions from the strategic report.

One caveat first, without which the rest reads wrongly: these are not rules in force. A consultation opened on 7 September and closes on 30 November 2026. What takes effect, and when, will be settled after that. Nothing needs filing differently today.

What is proposed for removal

• The directors’ report — scrapped altogether. That reaches every company, including the smallest: today it is prepared even where there is one director who is also the only employee.
• The strategic report — more companies exempted.
• Audit — exemption widened for medium-sized companies.
• Paper mailings to shareholders — electronic communication becomes the default. Paper stays for those who ask for it.
• Non-financial reporting for private companies — being tested for removal.
• Distributable profits and capital maintenance rules — proposed to be replaced with a solvency-based approach.

What counts as a small company now

Exemptions follow size, so it helps to know where you sit. The thresholds were lifted by roughly half against their 2013 level. A company falls into a category if it does not exceed two of the three figures:

The money thresholds moved; the employee figures did not. Most companies among our readers are micro or small, and for them the point of this package is the directors’ report going.

What it means in practice

If you run a one- or two-person Ltd, the directors’ report is a page of text your accountant prepares every year and almost nobody reads. Scrapping it will not make you richer, but it removes a line from the accountant’s bill and one reason to miss a deadline.

The wider audit exemption matters to larger firms. An audit costs thousands a year, and for a growing business that is real money.

What is not going: the accounts themselves at Companies House, the confirmation statement, HMRC returns and the tax. The form of reporting is under review, not the duty to report.

You can have a say

The consultation is open until 30 November and anyone may respond, including the director of a small company. If some requirement eats your time and money, this is the moment when you are asked before the decision, not after. The consultation paper and the response form are on GOV.UK.

We do not give individual accounting advice. Exactly what will reach your company is a question for your accountant once the rules are settled.