Practitioners will no doubt be aware that the Economic Crime and Corporate Transparency Bill is nearing the end of its progress through the parliamentary process. The final stages will involve consideration of amendments and Royal Assent.
Once this process is completed, software companies will need to rethink statutory accounts production. In particular, the withdrawal by this legislation of filleted accounts as the need to file profit and loss numbers will become obligatory for all companies, including small and micro companies.
All companies will also have to file a directors’ report.
The rationale behind these changes is to improve transparency and provide credit reference agencies and other interested parties with more meaningful data to make their assessment of risk.
Company owners affected by these changes will no doubt be horrified that what they consider to be personal, and private information about their business finances will become public. For example, trading numbers, gross profit and a possible detailed analysis of overheads, including directors’ remuneration.
Will this additional disclosure benefit competitors as well as credit reference agencies?
There is no information as yet on a detailed description of the data that will need to be filed on profit and loss accounts, this will be set out in secondary legislation. Perhaps there will be an opportunity to file “abridged” P & L reports; we will have to wait and see.
What is clear, is that the days of withholding raw data on our trading activities is about to come to an end. Be sure to keep your clients aware of these impending changes. Informanagement subscribers will be gratified that our newsfeeds have recently included updates on this topic.
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