For a generation of UK directors, the "small company" status has meant a comfortable settlement: file slim accounts at Companies House, keep most of the financial detail private, and move on. That settlement is being unwound in two directions at once. Thresholds are being adjusted, and the reduced-disclosure options under ECCTA are being narrowed. For accountants, the practical effect is that what you file for small companies is changing - and clients who have always assumed they get to file the minimum need re-educating.
What changed in 2024-25
Two reforms matter most. First: the threshold uplift that took effect for periods commencing on or after 6 April 2025 raised the small-company turnover threshold from £10.2m to £15m and the balance-sheet threshold from £5.1m to £7.5m. That moves some companies out of the medium-company bracket and into small. That is the good news for those clients.
Second: ECCTA removes the option for small companies to file abridged accounts or to file just the balance sheet (filleted accounts) without a profit and loss account. Once the relevant ECCTA commencement order takes effect, all small companies must file both a balance sheet and a profit and loss account, with directors' report disclosures, even though the small-company audit exemption is unchanged. That is the bad news for nearly all clients.
The end of filleted accounts in practice
The filleted-accounts route was used by the overwhelming majority of UK small companies. It meant Companies House saw only a balance sheet and basic notes, with no profit and loss data publicly visible. Under the new regime, the profit and loss account becomes a public document for every small company that prepares accounts under FRS 102 Section 1A or FRS 105.
For clients, this is a transparency change with real consequences. Competitors will see turnover and gross margin. Suppliers will see operating costs. Acquirers will see profitability without an NDA. None of this is unreasonable as a policy choice - the UK has been an outlier in allowing small companies to file accounts that disclose almost nothing - but it does require client communication.
Micro-entities under FRS 105
Micro-entities (turnover under £1m, balance sheet under £500k after the 2025 uplift, 10 or fewer employees) still file under FRS 105 with its very limited disclosure regime. ECCTA narrows but does not eliminate the micro-entity simplifications. Expect continued narrowing in future commencement orders - the policy direction is towards more disclosure, not less.
The audit exemption is unchanged - for now
The size thresholds for audit exemption have moved with the small-company thresholds (so the new £15m turnover / £7.5m balance sheet figures apply). That is genuinely good news for some clients. But audit exemption and disclosure are now decoupled: a company can be exempt from audit and still required to file full(er) small-company accounts including a profit and loss account.
What to brief clients on
A short briefing covers most of what clients need to know. Three points carry most of the weight.
- Your accounts at Companies House will now show a profit and loss - not just a balance sheet
- The thresholds for "small" have gone up, so some previously medium companies may now qualify
- Audit exemption is still based on the same size test, but the size test numbers have changed
The repositioning conversation
For firms, this is also a commercial opportunity. Clients who have relied on filleted accounts for confidentiality will look to their accountant for advice on what the new disclosures will show, how to present them in the best light, and whether to time any structural changes (group restructures, dividend timing) ahead of the first public P&L. That is advisory work, not compliance work, and it should be priced accordingly.
Where the firm-side workflow needs to flex
The mechanical changes are not enormous - your accounts software already supports the relevant FRS 102 1A disclosures. The bigger change is identifying clients who need a heads-up before their next accounts go in. Accupe's Compliance Radar pulls each client's ARD and accounts status from the Companies House sync, and the firm can filter the client list by size category and accounts type to identify the cohort that needs a pre-year-end conversation. Accupe is the visibility tool - the accounts themselves still go in via your filing software.
Closing
The small-company filing regime is becoming more transparent and more uniform. Most clients will adjust. Some will resist. The firms that have already mapped their client base by size and disclosure status, briefed clients ahead of time, and surfaced the higher-disclosure cohort early will move through the transition without drama. The firms that find out about it when the first set of accounts is rejected for the wrong template will spend the year explaining it to angry directors.