Modernising corporate reporting: what you need to know

What is happening?

On 7 September 2026, the Department for Business, Innovation, Science and Trade (BIST) released a 12-week consultation on modernising corporate reporting, described as a "once-in-a-generation" opportunity to reset the UK's corporate reporting framework. The consultation contains proposals to focus annual report and accounts requirements on the needs of creditors and investors and to ensure that they deliver decision-useful, financially material information.

This consultation forms part of the UK government's broader push to cut regulation and promote economic growth and follows the government's October 2025 announcement that it plans to legislate to:

• Exempt most medium-sized private companies from the requirement to produce a strategic report.

• Exempt wholly owned subsidiaries from the requirement to produce a strategic report where they are covered by the reporting of a UK parent company. 
• Remove the requirement for any company to produce a directors' report, with some provisions being removed entirely and others (including reporting on energy and emissions) being relocated elsewhere in the annual report.

If implemented, the proposed changes (as well as the planned legislative changes already announced) would be some of the most significant changes to corporate reporting requirements that the UK has seen in the past 20 years, greatly simplifying the process of corporate reporting for companies of all sizes and types.

The consultation remains open until 30 November 2026.

Proposed changes

The consultation is very broad-ranging. Some of the key proposed changes include:

Categories of companies and application of corporate reporting rules

• Creating a lighter regulatory load for small and medium-sized enterprises (SMEs), including allowing certain medium-sized companies to qualify for an audit exemption.

• Possible introduction of a new 'very large' company category for narrative reporting purposes.

Financial reporting framework

• Removing detailed financial reporting requirements from the Companies Act 2006 (2006 Act), with identified accounting standards to become the single source of detailed financial reporting obligations for each type of company specified in the 2006 Act.

• Extending reporting exemptions for small companies and groups to medium-sized companies.

• Allowing more subsidiaries to use reporting exemptions, even if members of a group that includes a regulated financial services provider.

• Replacing the current distributable profits and capital maintenance rules with a solvency-based regime requiring companies to state that payment of a dividend will not affect the company's ability to continue as a going concern.

Strategic reports

• Removing specific disclosure requirements in the 2006 Act (with the exception of climate-related financial disclosures (CFDs)), including environmental matters, employees, social matters, community matters, respect for human rights and anti-corruption and anti-bribery matters, where they are not financially material to the company. CFDs will be the subject of a separate review which will also consider reporting against the UK Sustainability Reporting Standards published in February 2026.

• Replacing existing strategic reporting requirements with a core set of baseline narrative disclosures (covering the company's business model, performance, resources and relationships, strategy and principal risk exposures).

• Considering whether strategic reports should be required for publicly listed companies and large private companies, 'very large' companies, or only publicly listed companies.

• Introducing additional cyber risk reporting disclosures for very large companies.

• Requiring reporting companies to be transparent about assurance of strategic reporting information in annual reports.

Corporate governance reporting

• Moving corporate governance reporting requirements from the company level to the group level.

• Considering whether corporate governance reporting requirements should apply only to very large private companies and public companies.

Remuneration reporting

• Removing the requirement for an annual shareholder advisory vote on the directors' remuneration report (since the remuneration policy is already subject to a binding triennial vote).
• Removing certain elements of annual remuneration reporting, including the CEO-employee pay ratio, clawback policies and how the company is addressing significant shareholder dissent on a vote on directors' remuneration.

Digital age corporate communications

• Making electronic communications with shareholders the default, with individual shareholders having the right to opt in to receiving hard copy communications.

• Relocating certain types of disclosures to company websites or online portals.

• Providing legislative clarification that AGMs and other shareholder meetings may be fully virtual where there is shareholder consent and considering whether other shareholder safeguards are appropriate.

What next?

Legislation to implement the changes announced by the government in October 2025 will be introduced in due course.

The consultation on further possible changes will remain open until 30 November 2026. BIST will aim to publish the outcome of the consultation within 6 months of the consultation closing (ie by the end of May 2027).

The proposals outlined in the consultation could provide welcome simplification of the UK's corporate reporting requirements. However, until the government publishes its response to the consultation, it will remain unclear which of these additional proposals will be taken forward and what the likely timing of any changes will be.