As part of its move to reduce ‘red tape’ and aid business growth, the government has announced plans to remove the requirement for companies to include a directors’ report as part of their annual accounts.
Micro-entities are already exempted from the requirement to include a directors’ report in their accounts; however, it is intended that the requirement will be removed for all companies. It is estimated that this will affect approximately 440,000 companies.
Medium-sized private companies will also be exempted from the requirement to prepare a strategic report as part of their annual report and accounts.
Wholly-owned subsidiaries will also be exempted from preparing a strategic report, provided their disclosures are included in the UK parent company’s annual report and accounts.
Estimates suggest that these changes could save UK businesses in the region of £230 million each year, and legislation to bring about these changes will be introduced as soon as possible.
The government has published the draft secondary legislation for the UK’s Carbon Border Adjustment Mechanism (CBAM), which is due to go live on 1 January 2027. This is an important development for UK businesses importing affected materials.
The Spring Statement will be delivered in Parliament on 3 March, giving an update on the state of the UK economy and the government’s financial outlook.