UK Companies House Reforms – Transforming iXBRL Tagging and Reporting
In February 2022, the UK Government proposed changes to financial reporting to expand the role and powers of its executive agency, Companies House. These reforms, designed to improve the quality of financial reporting in the UK, represent a significant shift in the UK’s financial reporting landscape. Let’s delve deeper into the UK Companies House reforms and how they have transformed iXBRL tagging and reporting.
Digital Transformation for UK Companies House
In line with international best practices and to support the needs of the dynamic 21st century, the UK government published the White Paper with a series of proposed changes. According to these reforms, company accounts must be filed with the Companies House in a digital format using Inline Extensible Business Reporting Language (iXBRL).
Currently, companies that comply with iXBRL in the UK do it according to the HMRC mandate. Moreover, they can submit the annual reports to HMRC within 12 months.
However, as per the new reforms, companies must submit annual reports to the Companies House in iXBRL format by a proposed timeline of Q1 2025. The deadline for reports in digital iXBRL format is 9 months.
The Effect of Reforms on Financial Reporting
The UK Government’s reforms related to financial information have significantly changed the financial reporting situation. Here’s how:
- The amendment to the Companies Act requires companies to prepare and submit a single set of accounts with the mandatory use of iXBRL. Companies will also be required to fully tag the information in their accounts. These tags are machine-readable, making the information easier to compare and check.
- Small companies will now be required to file their profit and loss accounts and director’s reports. However, micro-entities required to file their profit and loss accounts are not mandated to prepare or file a director’s report.
- Dormant companies must file an eligibility statement, providing an additional layer of compliance.
With these reforms, the Companies House aims to welcome a new era of digitisation and transparency in financial reporting.
With iXBRL tagging and digital reporting becoming the norm, companies must prepare to embrace these changes. Though this digital transition may present challenges, the benefits, like improved transparency and efficiency, cannot be ignored. If you are wondering how to transition to iXBRL reporting smoothly, DataTracks can be the right choice!
DataTracks, the global leader in compliance reporting, is the right partner for businesses to move from a 12-month to a 9-month timeline of annual report submission. With an experience of 18 years of preparing over 348,000 compliance reports for more than 23,400 clients, the professionals at DataTracks can help companies file error-free compliance reports with Companies House. So what are you waiting for? Get in touch with us TODAY at +44 (20) 36088035 or email @ email@example.com.