Companies House 2028: your accounts will be read by a machine first

On 9 June, Companies House confirmed how the accounts reforms in the Economic Crime and Corporate Transparency Act 2023 will be implemented. Between 16 and 18 June, every registered company gets an email about it. Some of those directors will forward it to their accountant within the hour. It is worth knowing what to say before the phone rings.

From 1 April 2028, every company files its accounts through commercial software, in iXBRL format. The web and paper routes close for accounts. Small companies and micro-entities file a profit and loss account for the first time, with the option to keep it off the public register. Abridged accounts disappear. Companies claiming audit exemption must state on the balance sheet which exemption applies and confirm they qualify for it. And a company can only shorten its accounting reference period once every five years without a documented business reason.

The sentence everyone underlined is the opt-out. Small companies can file the P&L without it appearing on the public register, and for owners who worried about competitors, customers and suppliers reading their margins, that is genuine relief. But read the government's own wording. Where a company opts out, Companies House, HMRC and law enforcement still have access, "to help identify and tackle fraud, economic crime and tax evasion". The opt-out controls who can browse. It does not control who can read.

And the reading is the real reform. A set of accounts filed today is, in practical terms, a picture: a human could read it, and mostly nobody does. An iXBRL filing is different. Every line item carries a machine-readable tag, which means every line item can be queried, compared and matched at scale. HMRC has required iXBRL accounts and computations with every company tax return since April 2011, so machine-read accounts are nothing new there. What is new is the other side of the comparison. From 2028, the registry holds tagged, full-form profit and loss data for the smallest companies in the country, a population whose P&L has never been filed anywhere before, and abridgement is no longer available to soften the detail.

Companies House is not collecting this passively. Under the 2023 Act, the registrar can query a filing, compel supporting information, and reject a filing that is inconsistent with information already held, and Companies House uses data matching to clean the register. On the HMRC side, the Connect system has been running since 2010 and is reported to cross-reference billions of lines of data, from banks and the Land Registry to Companies House filings, generating nudge letter campaigns with very little human involvement. Two datasets that could never be compared line by line are about to become comparable, line by line.

Which brings us to a Supreme Court case that reads as if it was written about 2028.

In Tooth v HMRC [2021] UKSC 17, Mr Tooth's adviser needed to claim a carry-back loss, and the HMRC-approved filing software had no box for it. The workaround was to enter the figures on the partnership pages and explain exactly what had been done in the white space of the return. Years later, HMRC argued the return contained a deliberate inaccuracy, reading the boxes in isolation. The Supreme Court disagreed, and said something quietly profound: a return cannot have "a different meaning depending upon whether it is read by a human being or by a computer". Read as a whole, explanation included, the return told the truth. Mr Tooth won because the whole document was the document.

That principle still stands, and it protects taxpayers today. What changes in 2028 is the order of reading. Tagged data gets compared first, by systems built to find mismatches. The explanation, the accounting policy note, the context that gives a number its meaning, arrives later, usually after the letter has gone out. The law says context counts. The workflow says context comes second. The practical consequence for accountants is plain: the figures a client files at Companies House, the figures attached to the CT600, and the figures behind the VAT returns will all be readable by the same machinery, and a discrepancy between them no longer needs a human to notice it.

So when the email lands next week, the client conversation is short. Yes, it is genuine, though imitations will follow, so anything similar arriving outside those dates deserves a look at the sender. No, nothing is needed yet. The opt-out is a question about the public register, not about visibility to HMRC. And the clients still filing for themselves through the web service are the ones who need a plan, because that route closes for accounts in 2028.

The longer conversation belongs inside the practice, because what changes in 2028 is what filing means. Since 1844, filing has been the end of a process: prepare, sign, deliver, done. The accounts went onto a shelf, and the shelf was the point. From April 2028, filing is the start of one. The moment a set of accounts arrives, it is read: tagged line against tagged line, against the tax return, against the VAT record, against everything the registrar already holds, by a reader that never skims and never reads the note first.

Mr Tooth was saved by the white space because, in the end, a human read the whole page. The filings of 2028 will get no such patience. There are three versions of every client's numbers: the ones at Companies House, the ones attached to the CT600, and the ones the books actually support. Until now, nobody could hold all three up to the light at once. From April 2028, something does, every time, and the only safe position is that all three tell the same story.

The register has kept records since 1844. From 2028, it keeps score.

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