On 7 September 2026, the Department for Business, Innovation, Science and Trade (BIST) published Consultation: Modernising corporate reporting, its plans to simplify financial and non-financial reporting obligations across almost every part of the annual report and accounts.

Described by the government as a "once in a generation opportunity to reset the corporate reporting regime."

Why it matters

Few companies will be untouched by this if it proceeds as proposed. The consultation covers the thresholds that determine which reporting and audit obligations apply, the structure of financial reporting under the Companies Act 2006 (CA 2006), and even the legal basis on which dividends can lawfully be paid. For founders and corporates currently sitting near a size threshold, or investors assessing a portfolio company's compliance burden, several of these proposals could change the practical cost of reporting within the next few years.

What's being proposed

The consultation is built around five principles: clarity of purpose, flexibility and trust, simplicity and coherence, proportionality, and being fit for the future. In practice, that translates into proposals across nine chapters, including:

Thresholds and exemptions. The government is asking whether medium-sized companies should get access to some or all of the exemptions currently reserved for small companies, including a potential audit exemption, under a new SME accounting regime. A new "very large" company category is also proposed, aimed at non-financial reporting obligations such as climate disclosures and corporate governance.

Financial reporting. Detailed financial reporting requirements would move out of CA 2006 entirely, replaced by high-level legal obligations and a streamlined set of four accounting standards. Small companies could lose the requirement to prepare accounts giving a "true and fair view" in favour of a simpler standard.

Dividends and distributions. This is the change with the most direct legal consequence: the government is considering replacing the current rules on distributable profits and capital maintenance with a solvency-based test, under which a company would need to state that paying a dividend will not affect its ability to continue as a going concern.

The strategic report. Most existing strategic reporting requirements would be replaced with a baseline set of narrative disclosures on business model, performance, resources, strategy and principal risks, and this would replace the section 172(1) statement entirely.

Corporate governance and remuneration reporting. The consultation looks at moving governance reporting to group level and proposes removing the annual advisory shareholder vote on the directors' remuneration report for quoted companies.

Shareholder communications and AGMs. Electronic communication would become the default for shareholder correspondence, and the law would be clarified to put fully virtual AGMs on a clear footing where shareholders consent.

Companies House. A new obligation would require companies to notify Companies House of an auditor's appointment, including the firm's name and registration number.

This builds on changes the government already announced in October 2025, exempting most medium-sized companies and wholly owned subsidiaries from the strategic report and removing the directors' report requirement altogether; legislation for those changes is still to be laid before Parliament.

What to do now

For now, this is a live opportunity to shape the rules rather than a fixed change to plan around. The government has said it aims to respond within six months of the closing date.

If you want to talk through what any of this could mean for your reporting obligations, our corporate team is happy to help.