The UK government has opened a consultation on making corporate reporting simpler and more proportionate—but no reporting rule changed when the document was published. The proposals range from digital annual reports to possible audit exemptions for some medium-sized companies. Businesses should treat them as options under review, not instructions for their next filing.
What is the government consulting on?
The Modernising Corporate Reporting consultation, published on 7 September 2026, asks whether the framework can be made clearer and less repetitive. It covers financial and non-financial reporting, corporate governance, directors’ remuneration and digital communications.
The government says it wants to clarify who annual reports are for, rationalise thresholds and exemptions, and remove requirements that duplicate information available elsewhere. Those aims are broad: the 70-page consultation tests different approaches rather than presenting one finished replacement regime.
Could medium-sized companies become exempt from audit?
Potentially, but this is not an automatic new exemption. The accompanying government announcement says the consultation explores allowing some medium-sized companies to qualify for audit exemption. Any eventual eligibility would depend on the final policy, legislation and detailed thresholds.
The same package asks whether reporting obligations for private companies remain proportionate. It also examines the strategic report, remuneration disclosures and the interaction between company size tests. Companies should continue following the rules that apply today unless and until formal changes take effect.
What could digital reporting mean in practice?
The consultation supports greater use of digital reports and communications. That could make information easier to search, compare and reuse, while reducing printing and distribution. It also raises practical questions: a digital system still needs accessible formats, reliable records and a clear way for shareholders and creditors to obtain the information they are entitled to receive.
What is the solvency-based proposal?
Another strand considers replacing complex rules on capital maintenance and distributable profits with a solvency-based approach. In plain English, that could change how companies establish whether a distribution is legally supportable. This is a technically significant proposal, not permission to alter dividend decisions now. Boards should continue using current law and professional advice for live transactions.
How can businesses respond?
The consultation is open to companies, investors, creditors and other stakeholders until 30 November 2026. Responses can be submitted through the official online form or by email or post using the details on the consultation page. Useful evidence would include the cost of a requirement, who uses the resulting disclosure and whether a simpler alternative preserves decision-useful information.
Reporting basis: Ferdiox reviewed the Department for Business, Innovation, Science and Trade consultation and accompanying government announcement on 8 September 2026. This article explains a live consultation and is not accounting or legal advice.
Illustrative image. Photo by Beatriz Pérez Moya on Unsplash