Major changes to the way companies file tax returns and accounts could be on the cards after the government launched a consultation on the issue.
The Department for Business, Energy and Industrial Strategy (BEIS) is exploring how in future companies might be able to file accounts only once with government, instead of separately to Companies House, HMRC and other agencies.
It is also proposing that deadlines for filing accounts with Companies House be reduced to three months for public and six months for private companies – cutting the time available to prepare accounts by three months.
Other options proposed include enabling companies to file their accounts in one place and for all government bodies to extract the information they need from that central source.
In addition, there is a proposal for mandatory digital filing of accounts with Companies House – a potentially significant change for the 15% of companies that filed paper accounts in 2019.
Rob Meredith, Tax Senior Manager at PKF Francis Clark, said: “Aligned filing deadlines would be a shock to the system for businesses, their accountants and advisers. Such a move is likely to prove unpopular in the short terms as everyone gets to grips with it, but given that the combined impact of these proposals would see a fundamental change to way current year data is recorded and reported, it may be an opportune time for modernisation to be embraced across the industry.
“If there are aligned government systems, capable accounting and tax software availability and a desire from all in the industry to adapt some traditional working practices, it should be doable. It will be a bumpy ride in the short term, though, no doubt.”
The government’s aim is to improve the quality of financial information on the UK companies register. It is running in parallel with two other BEIS consultations: on banning corporate directors in an attempt to tackle opaque structures; and on giving Companies House new powers to query filed information on a risk-based approach.
The BEIS consultation closes on Wednesday 3 February. Details can be found at https://tinyurl.com/y6cufly3