A significant review of the UK framework
The government has launched a wide-ranging consultation on modernising UK corporate reporting. It closes on 30 November 2026 and could lead to the most significant recasting of the framework since the Companies Act 2006.
The ambition is to make reporting clearer, more proportionate and better suited to a digital economy.
The consultation is therefore broader than shortening annual reports: it considers company categories and exemptions, the relationship between company law and accounting standards, strategic and governance reporting, distributions, and digital communication.
What is the government seeking to achieve?
The proposals are built around five principles:
- clarity of purpose
- flexibility and trust
- simplicity and coherence
- proportionality
- a framework fit for the future.
The annual report and accounts would be refocused on financially material, decision-useful information for existing and potential investors and creditors.
The principal proposals
|
Area |
What the consultation considers |
Point to note |
| Company categories and exemptions | An expanded SME reporting regime, possible extension of audit exemption to companies eligible for the medium-sized regime, wider group access to exemptions and a possible 'very large' threshold. | The consultation asks for evidence on costs, benefits, finance and credit; the detailed scope and safeguards remain open |
| Financial reporting | A clearer division between company law and accounting standards, with differentiated requirements for different categories of company. | The architecture, standard-setting, transition and interaction with the true and fair framework require further development. |
| Strategic reporting |
Baseline reporting on business model, performance, resources and relationships, strategy and risks, focused on financially material information. | The consultation seeks views on scope, specified disclosures, sustainability, cyber risk and transparency over assurance. |
| Governance and remuneration | Changes to the location and level of governance reporting, and the retention, refinement or removal of remuneration disclosures and votes. | Alignment with the UK Corporate Governance Code and other market requirements will be important. |
| Distributions | A possible solvency model for determining the legality of dividends. | This is an open policy question with implications for creditor protection and directors’ responsibilities. |
| Digital reporting | Electronic communications by default; clarification that a virtual location can be a place for company meetings where there is shareholder consent; electronic formatting, websites and portals, tagging and future technologies including AI. | Integrity, accessibility, retention, sign-off and the respective responsibilities of directors and auditors will need to be addressed. |
What could this mean for different businesses and the potential relevance?
Charities and not for profit
What should companies consider now?
The proposals are at different stages: some develop measures announced previously, while others remain open policy questions requiring further design, legislation or standard-setting. Companies should identify which proposals affect their reporting perimeter, users, governance and systems, and consider providing evidence on practical costs, benefits and unintended consequences.
Areas to examine include future threshold changes, the information expected by investors and creditors, the treatment of groups and subsidiaries, the readiness of narrative and digital reporting processes, and the interaction between Companies Act requirements and other regulatory frameworks.
Questions for boards and finance teams
How to respond and get support
The consultation contains 60 questions and closes at 23:59 on 30 November 2026. Respondents need not address every question; focused evidence on the proposals most relevant to them will be valuable.
If you would like to understand how the consultation could affect your organisation, or discuss contributing evidence, please contact your usual Crowe advisor.
Responses may be submitted through the government’s online consultation or, where that is not possible, by email to: [email protected].
Government consultation: https://www.gov.uk/government/consultations/modernising-corporate-reporting
Understand the proposed overhaul of UK corporate reporting and what the changes could mean for your organisation.
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