UK launches corporate reporting overhaul

The UK government has opened a consultation on a broad rewrite of corporate reporting rules that would lighten disclosure and audit requirements for smaller businesses, make shareholder communications digital by default and revisit parts of the legal framework around profits and capital maintenance. (gov.uk) The consultation was published by the Department for Business, Innovation, Science and Trade on September 7 and closes at 11:59 p.m. on November 30. Ministers said the package forms part of a wider programme expected to save businesses more than £450 million a year. (gov.uk) Jonathan Reynolds, the business secretary, said in a September 6 press release that “No-one goes into business to fill out forms,” as the government framed the exercise as a push to cut compliance costs and support growth. (gov.uk) The consultation document says the review covers financial reporting, non-financial reporting, corporate governance, remuneration reporting and digital communications. ### What is the government actually consulting on? The 70-page consultation document says the government is seeking views on how to “modernise” the UK corporate reporting framework so it better meets the needs of companies, investors and the wider economy. It says the proposals aim to simplify obligations, clarify the purpose of reporting, rationalise thresholds and exemptions, and reduce duplicative requirements. (gov.uk) The Department for Business, Innovation, Science and Trade said the consultation spans the corporate reporting framework, financial reporting, non-financial reporting, corporate governance, remuneration reporting and reforms to support wider use of digital reporting and communications. The document also includes a section on the possible use of artificial intelligence in corporate reporting, though the government said the consultation is focused on the legal framework rather than mandating particular tools. (gov.uk) ### Which companies stand to get the biggest relief? Government proposals would simplify reporting rules for small and medium-sized enterprises and exempt more businesses from audits, according to the September 6 press release. (gov.uk) The consultation document says ministers are considering removing distinctions between small and medium-sized companies in parts of the framework so medium-sized companies could access a wider package of exemptions. A 2024 consultation outcome already set out support for two earlier steps: raising the employee threshold for medium-sized companies to 500 employees and exempting medium-sized companies from preparing a strategic report. Those measures now sit inside a broader review of how reporting obligations should apply across company sizes. (gov.uk) ### What changes are proposed for annual reports? The government said existing plans to scrap directors’ reports and widen strategic-report exemptions are expected to account for about £230 million of annual savings, according to reporting that summarized the proposals. The consultation document itself includes sections on reforming strategic-report requirements, simplifying corporate governance reporting and simplifying remuneration reporting, including disclosures the government proposes to retain, refine or remove. (gov.uk) The September 6 press release said average annual report and accounts documents at some businesses run to 98,000 words, while the average for FTSE 100 companies is 152,000 words. (gov.uk) Ministers said current rules can force smaller operators to spend thousands of pounds on reports. ### How would shareholder communications change? The consultation document includes a chapter titled “Corporate communication for the digital age,” covering a presumption in favour of digital communications to shareholders, fully virtual annual general meetings, electronic formatting of annual reports and website or portal reporting. The September 6 press release said the government wants electronic communications to shareholders to become the default, replacing paper-heavy processes. (businessquarter.co.uk) The proposals sit alongside a separate Companies House timetable announced on June 9 under which all UK companies will have to file annual accounts through commercial software from April 2028, with accounts submitted in a more standardised digital format. (gov.uk) ### What happens next? The consultation page says responses are invited from companies, investors, creditors and other stakeholders until 11:59 p.m. on November 30, 2026. The department has published the consultation text and response route on GOV.UK, and the document’s “Next steps” section says the government will use the exercise to shape a simpler and more future-focused reporting framework. (gov.uk 1) (gov.uk 2) (assets.publishing.service.gov.uk)