Consultation launched on plans to cut reporting requirements for small businesses

A government consultation has launched on plans to reform corporate reporting requirements, exempting small businesses from audits, and moving to a digital-first approach for shareholder communications.

While corporate reporting keeps firms transparent and ensures investors are well informed about a business’ performance, modern rules, government argues, are too complex and burdensome for businesses of all sizes, with the average annual report and accounts rivalling novels in their word counts. Previous reforms to corporate reporting are estimated to have saved UK businesses more than £450 million a year.

Plans are already underway to scrap director’s reports and expand exemptions from providing strategic reports which are expected to save around £230 million annually. Use of AI is also forecast to transform how businesses manage reporting and compliance, allowing staff to be redirected away from administrative tasks and towards activities that drive innovation and growth.

Reduced administrative costs are also expected to mean businesses have more room to keep prices competitive, particularly for family firms and smaller businesses operating on tighter margins.

A consultation on further reforms to corporate reporting requirements will run from 7th September until 30th November 2026, and has been welcomed by business groups.

Jordan Cummins, UK Competitiveness Director, CBI, said:

“Corporate reporting is a central piece of investor and market confidence, but it’s also a resource heavy process for many businesses.

“Moves to modernise our reporting regime are welcome and firms across the UK will look forward to helping government and regulators land on a futureproofed and agile framework.”

James Ashton, Chief Executive of the Quoted Companies Alliance said:

“We welcome this consultation and the Government’s continued focus on a simpler, more proportionate framework for companies.

“Annual reports play an important role in shareholder communication, but reforms should help companies focus on growth and productivity while maintaining trust and confidence.

“We look forward to working with government to ensure these changes support a more competitive and attractive environment for quoted companies.”