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← Cosgarne Hall Ltd

2025-03-31-accounts

Audit completion report

31 March 2025

PRIVATE AND CONFIDENTIAL 1

Audit completion report

PRIVATE AND CONFIDENTIAL

The Board of Trustees Cosgarne Hall Limited 81 Truro Road St Austell Cornwall PL25 5JQ

Audit completion report

We are happy to share with you our audit completion report for the upcoming Board meeting.

The report covers key issues found during the audit and our conclusions. The audit is substantially complete. We want to thank your finance team for their support during the audit.

This report is only for the Board of trustees and management. It should not be used by anyone else.

Yours faithfully PKF Francis Clark

PRIVATE AND CONFIDENTIAL 2

Contents

Status report Key audit and accounting matters Adjustments posted to the financial statements Unadjusted audit differences Internal control findings

Section one Section two Section three Section four Section five

Appendices

  1. Independence report

  2. Required communications

  3. Representation letter

  4. Factors impacting the tax charge for the year

  5. Topical regulatory changes

The contents of this report are subject to the terms and conditions of our appointment as set out in our engagement letter.

This report is made solely to the Board and management of Cosgarne Hall Limited in accordance with our engagement letter. Our work has been undertaken so that we might state to the Board and management of Cosgarne Hall Limited those matters we are required to state to them in this report and for no other purpose.

To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the Board and management of Cosgarne Hall Limited for this report or for the opinions we have formed. It should not be provided to any third-party without our prior written consent.

PRIVATE AND CONFIDENTIAL 3

Section one

Status report

PRIVATE AND CONFIDENTIAL 4

Section one

Status report

Status of the audit

Our work is substantially complete and we currently expect to issue an unmodified opinion.

Issues which remain outstanding

N/A

Key

PRIVATE AND CONFIDENTIAL 5

Section one Status report

Scope of the audit

In our audit planning letter presented to the Board of Trustees in July, we gave an overview of our audit scope and approach for the group financial statements.

We followed this plan.

Materiality

We reviewed materiality and are satisfied that our initial approach remains appropriate based on current figures.

Headline group materiality is £116k (previous year: £94k), based on 2% of revenue.

Unadjusted audit differences

Differences and exposures to judgement noted during our audit that have not been adjusted are summarised in section four of this report.

The total impact on the surplus is:

CHL - £(76,599).

HHSL - £nil

Internal control findings

Section five of our report summarises our findings on internal financial controls.

Adjustments to the financial statements

Adjustments made to the accounts of the companies during the audit are detailed in section three of this report.

PRIVATE AND CONFIDENTIAL 6

Section one Status report

Post balance sheet review

We are required to review events up to the date we sign our audit opinion. We need confirmation that no significant events have happened that would require changes or disclosure within the financial statements. We will also want to review the latest management accounts and discuss post year-end operations. This includes any bad debts arising after the year-end.

Letter of representation

A letter of representation is required. This needs to be signed on behalf of the board of trustees and dated the same as the financial statements’ approval date. Appendix four details any specific representations.

PRIVATE AND CONFIDENTIAL 7

Section two

Key audit and accounting matters

PRIVATE AND CONFIDENTIAL 8

Section two Key audit and accounting matters

Significant audit risk

Significant audit risk

Revenue recognition

Management override of controls

There is a significant risk relating to housing benefit and/or grant income being recognised in the wrong period through inappropriate accrual or deferral.

ISA 240 requires us to consider the risk of fraud due to management override of controls. This includes the risk that management may override controls to manipulate the financial statements.

How we addressed the risk

How we addressed the risk

Our audit work included:

Our audit work included:

Conclusion

No evidence of fraud in relation to revenue recognition has been identified through our audit procedures.

Conclusion

No evidence of fraud and management override of controls has been found in our audit.

PRIVATE AND CONFIDENTIAL 9

Section three

Adjustments posted to the financial statements

PRIVATE AND CONFIDENTIAL 10

Section three

Adjustments posted to the financial statements – Cosgarne Hall Limited GROUP

Adjustments posted during the audit_that impact surplus/deficit_and
have been reflected in the draft financial statements		 Effect on surplus £
Surplus in management accounts provided for audit 907,126
Opening balance adjustments (remove receipts recognised in 2024 via audit
adjustment)		 (70,588)
Late client adjustments following provisions of updated Sage backup (120,347)
Deferral of income relating to 2025/26 financial year (59,253)
Correct accruals - audit fee & remove VAT provision 70,172
Correct depreciation charge in year 11,307
Correct loan interest postings (116)
Correct for January prepayments not processed (52,277)
Impact of adjustments to Harbour Housing Services Ltd (see page 13) (7,810)
Impact of consolidation adjustments (3,639)
Surplus in current draft statutory accounts 674,575

PRIVATE AND CONFIDENTIAL 11

Section three

Adjustments posted to the financial statements – Cosgarne Hall Limited GROUP

Other adjustments posted during the audit that do not impact surplus/deficit and have been reflected in the draft financial statements

Other adjustments posted during the audit that_do not impact surplus/deficit_and have been
reflected in the draft financial statements		 Value £
Reallocate intercompany balances(£5k value but nil impact on SOFA) 5,051
Reallocate housing benefit income from trade debtors to accrued income (£134k value but nil impact on
SOFA)		 134,021
Split of loan aging (£182k value but nil impact on SOFA) 181,975
Presentational reallocation of contract income posted to donations (£9k value but nil impact on SOFA) 8,524
Account for new investment in Harbour Housing Ltd (£100 value but nil impact on SOFA) 100

PRIVATE AND CONFIDENTIAL 12

Section three

Adjustments posted to the financial statements – Harbour Housing Services Ltd

Adjustments posted during the audit that have been reflected in the draft financial statements Effect on profit £
Profit in management accounts provided for audit 34,337
Reallocate intercompany balances (£5k value, no impact on profit) -
Correct postings of loan interest 42
Correct posting of tax expense 78
Accrual of audit fee (4,150)
Post tax expense for the year (3,780)
Profit after tax in current draft statutory accounts 26,527

PRIVATE AND CONFIDENTIAL 13

Section four

Unadjusted audit differences

PRIVATE AND CONFIDENTIAL 14

Section four Unadjusted audit differences

During an audit, we identify differences between amounts we believe should be recorded in the financial statements and amounts actually recorded.

These may be

We have included all known amounts greater than triviality (£5,800 for the group) in our summary of audit differences.

We recommend that all factual misstatements are adjusted.

It is not appropriate to adjust extrapolated differences. If these are significant then additional work should be done to investigate the wider population.

PRIVATE AND CONFIDENTIAL PRIVATE AND CONFIDENTIAL15

Section four Unadjusted audit differences - Group

Differences observed during the audit and not currently adjusted
Surplus in current draft group statutory accounts		 Effect on surplus £
674,575
Factual misstatements
Presentational reallocation of credit balances on the trade debtors listing (£10k value, nil impact on
SOFA)		 -
Aging of the loan to Harbour Housing Services Limited (£14k value, nil impact on SOFA) -
Being accrual for fixed asset ordered in March but not available for use at the year end (£24k value, nil
impact on SOFA)		 -
Current year impact of last year’s unadjusted misstatements relating to insurance claim income (6,590)
Surplus if the differences above were all processed 667,985
Extrapolated differences and differences in assumptions
Projection of potential differences in items capitalised (extrapolated error) (70,009)

PRIVATE AND CONFIDENTIAL 16

Section four

Unadjusted audit differences – Harbour Housing Services Ltd

Differences observed during the audit and not currently adjusted Effect on profit £
Surplus in current draft group statutory accounts 26,527
Factual misstatements
Presentational reallocation of national insurance and pension costs (£2,580 value but nil impact on -
profit)
Profit after tax if the differences above were all processed 26,527

PRIVATE AND CONFIDENTIAL 17

Section five

Internal control findings

PRIVATE AND CONFIDENTIAL 18

Section five Internal control findings

Scope of work

During our audit, we learned enough about your internal controls to plan our audit and decide how to test them.

We must tell you in writing about any significant problems in your accounting and internal control systems that we find during our audit and think are important enough to report.

Significant deficiencies in internal control

We did not find any significant problems in internal controls that we consider to be material weaknesses.

Other control findings

During our audit, we made other observations that might be useful to you. These are summarised in the following pages.

Priority key

PRIVATE AND CONFIDENTIAL 19

Section five Internal control findings

Other internal control findings
Deficiency
The new leases and SLA agreements entered into
with Impakt this year contain contradictions and
are inconsistent with the actual accounting
transactions reflected in the accounting records.
This may mean there are errors in the agreements
or that the agreements are not being followed.
Examples of the inconsistencies were provided in
our email of 6/11/25.
In addition, there are specific issues with some
individual agreements such as the Schedule 1 in
Little Cosgarne's SLA relating to Lejogle.
The accounts have been prepared to reflect the
substance of the arrangements, and this has
been disclosed in the ‘Judgements & key sources
of estimation uncertainty’ accounting policy note.
A letter of representation point has been included
for the Trustees to confirm this treatment.		 Priority
●		 Potential impact / risk
If there are differences between
the actual transactions and the
related documentation, this could
impact the intended outcome of
the arrangement or give rise to
future disputes.
In addition, the nature of income
streams could be affected, which
may impact the VAT status of
transactions or the accounting
treatment.
Management have confirmed that
they will be reviewing and
updating the agreements as
necessary.		 ~~PRIVATE AND CONFIDEN~~
Management response
We acknowledge Francis Clark’s
findings on inconsistencies between
new leases/ SLA agreements with
IMPAKT and the accounting records.
All inconsistencies referenced will
be reviewed.
Where agreements do not match
current practice, we will amend them
to reflect current practice.
For the audited period, IMPAKT has
provided written confirmation that
there were no outstanding balances
and satisfaction with current
arrangements.
Be
PKF
Francis

A letter of representation point has been included for the Trustees to confirm this treatment.

~~PRIVATE AND CONFIDEN~~ TIAL 20

Section five Internal control findings

Other internal control findings

Deficiency
We note that no formal agreement is
in place regarding the management
fee charges between Cosgarne Hall
and Harbour Housing Services
Limited.		 Priority
●		 Potential impact / risk
We would recommend a formal
agreement be put in place outlining
the basis of the recharge, to ensure
the charity can demonstrate it is
appropriately reimbursed for services
provided.		 Management response
Management acknowledges that no
formal agreement was in place for
management fee charges between
Cosgarne Hall and Harbour Housing
Services Limited. This will now be
implemented to prevent further risk.
Target Date: February2026
We were unable to obtain formal
contracts relating to the income
Harbour Housing Services Ltd
receives from Cornwall Council for
domiciliary care fees.		 ● There is a risk that revenue is
inappropriately recognised in the
absence of a supporting contract.
The new SORP applicable after 1
January 2026, sets out a 5-step
revenue model for determining income
from exchange transactions, that is
based on the terms of the related
contract, and hence a formal
agreement should be obtained.		 After obtaining clarity of what was
required, further documents were
provided and were satisfactory.

PRIVATE AND CONFIDENTIAL 21

Section five Internal control findings

Other internal control findings

Deficiency
The balance of the loan due from
Harbour Housing Services Ltd to
Cosgarne Hall Ltd has not been
aged between current and non-
current debtors (portion due in more
than 1year).		 Priority
●		 Potential impact / risk
There is a risk that the financial
statements do not correctly show the
current net asset position.		 Management response
Management acknowledges this
and will correctly show current and
non-current portions of the debt.
There are debit balances on the
trade creditors report, which
suggest balances exist which are
recoverable, or that payments on
accounts have been made. These
balances may be more suitably
reallocated to debtors.		 ● There is a risk that account balances
are misstated or misclassified.		 Francis Clark to provide Harbour
Housing with specific examples for
us to rectify.

PRIVATE AND CONFIDENTIAL 22

Section five Internal control findings

Other internal control findings

Deficiency
It was noted that a fixed asset had
been purchased on a finance lease,
but that the liability had been
recorded as a trade creditor.		 Priority
●		 Potential impact / risk
There is a risk that balances are
misclassified in the financial
statements, and that the aging is not
presented correctly.		 Management response
We believe this should be raised to
an amber as it was identified in the
previous audit. Staff will be trained
on using the new single nominal
code in the balance sheet, for Lease
Agreements.
Items under the capitalisation
threshold of £250 were capitalised.
Additionally, many of these items
did not appear to be capital in
nature.
(However, we appreciate that many
of these items were likely part of a
wider capital building project).		 ● Capitalising very low value assets
results in a lengthy asset register that
could be hard to properly manage and
maintain.		 We will continue with the previously
agreed method of recording all
items in Sage projects, prefixed with
CP-.

PRIVATE AND CONFIDENTIAL 23

Section five Internal control findings

Other internal control findings

Deficiency
We noted the omission of a related
party from the declaration of interest
forms, following a review of
directorships on Companies House.
(J Varney re Rialto Court Ltd, G Bray
re St Austell Methodist Circuit)		 Priority
●		 Potential impact / risk
The charity may not be able to
appropriately identify and consider
conflicts of interests and related party
transactions if there are unknown
related parties.		 Management response
Agreed.
We noted one instance where an
item was entered with the wrong
invoice date.		 ● There is a risk that account balances
are misstated due to cut off errors.		 We will continue our internal cold
audits and strive to reduce this to 0.

PRIVATE AND CONFIDENTIAL 24

Section five Internal control findings

Update on previous years’ issues

Deficiency
During fixed asset testing, it was noted that a trivial
amount of fixed assets were posted to freehold
additions instead of leasehold additions.		 Priority
●		 Current year update
No new items posted to freehold where they should
have been leasehold.
During our employee testing, it was noted that an
employee only had a temporary contract, which was
outdated as the employee was noted as being in a
permanent position in the year. The employee has
since left the company.		 ● Test no longer performed due to methodology
change.
The balance of the loan due from Harbour Housing
Services Ltd to Cosgarne Hall Ltd has not been aged
between current and non-current debtors (portion
due in more than 1year).		 ● Loan remains unaged. In addition, we found various
errors relating to double entry postings of loan
transactions such as repayments posted to the
interest account.

PRIVATE AND CONFIDENTIAL 25

Section five Internal control findings

Update on previous years’ issues

Deficiency
There are debit balances on the trade creditors report,
which suggest balances exist which are recoverable, or
that payments on accounts have been made. These
balances maybe more suitablyreallocated to debtors.		 Priority
●		 Current year update
Debit balances still exist
It was noted that a fixed asset had been purchased on
a finance lease, but that the liability has been recorded
as a trade creditor.		 ● No other assets purchased on finance lease this year.
However, the lease liability from the prior year remains
as a trade creditor and has not been aged.
Items under capitalisation threshold of £250 were
posted to fixtures and fittings.		 ● Items below the capitalisation threshold continue to be
capitalised.
A single register of interests was provided instead of
individual declaration of interest forms completed and
signed by trustees. This poses a risk of omitting related
partytransactions as theymaynot be identified		 ● Individual forms have been provided this year.

PRIVATE AND CONFIDENTIAL 26

Appendices PKF Francis Clark PRIVATEAND CONFIDENTIAL 27

Appendix one

Independence report

PRIVATE AND CONFIDENTIAL PRIVATE AND CONFIDENTIAL28

Appendix one: Independence report

Compliance and independence

We follow ISA (UK) 260 and the FRC’s Ethical Standard. We also share any matters or relationships that might affect our independence or objectivity.

We have policies and procedures to ensure that we work with integrity, objectivity and independence. These include:

We are not aware of any relationships between PKF Francis Clark and the company that, in our professional judgment, might affect our independence or the objectivity of the audit engagement team.

We believe we have adequately addressed the main threats to our independence from non-audit services.

We confirm that we have complied with the FRC’s Ethical Standard and in our professional judgment, the firm is independent. Additionally, the objectivity of the audit engagement partner and audit staff has not been compromised.

The principal threats and safeguards are consistent with those communicated in our planning letter on 21 July 2025.

PRIVATE AND CONFIDENTIAL 29

Appendix two

Required communications

PRIVATE AND CONFIDENTIAL PRIVATE AND CONFIDENTIAL30

Appendix two: Required communications

The table below outlines the key matters that we are required to communicate to audit clients and how we will formally document this:

Required Communication Where we do this
Terms of engagement:Confirmation of acceptance of terms of engagement Engagement Letter
Planning and audit approach:Communication of the nature and scope of the audit including any
limitations. Scope of group audit work, including significance of each component, and component
materiality where applicable		 Audit planning letter
Independence:Communication of all significant facts and matters that affect PKF Francis Clark’s
objectivity and independence.
Communication of key elements of the audit engagement partner’s consideration of independence
and objectivity, such as:
• The principal threats
• Safeguards adopted and their effectiveness
• Information about the general policies and process within the firm to maintain objectivity and
independence		 Audit planning letter
and audit
completion report

PRIVATE AND CONFIDENTIAL 31

Appendix two: Required communications

Required Communication Where we
do this
Fraud:
• Fraud that we have identified or information that indicates a fraud may exist
• Material weaknesses in the design or implementation of internal control to prevent or detect fraud
• Any other matters related to fraud		 Audit
completion
report
Consideration of laws and regulations:
• Audit findings regarding non-compliance where the non-compliance is material and believed to be
intentional.
• Enquiry by PKF Francis Clark into possible instances of non-compliance with laws and regulations that
the board of directors may be aware of.		 Audit
completion
report
Related parties:Significant matters arising during the audit in connection with the entity’s related parties
including, where applicable:
• Non-disclosure by management
• Inappropriate authorisation or approval of transactions		 Audit
completion
report

PRIVATE AND CONFIDENTIAL 32

Appendix two: Required communications

Required Communication Where we do this
Audit findings:
• Our view about the qualitative aspects of accounting practices, including accounting policies,
accounting estimates and financial statement disclosures
• Final draft of letter of representation that will be signed by management and the board of
directors. This will include any written representations that we are seeking
• A summary of unadjusted audit differences, including a request that any unadjusted audit
differences be corrected
• A summary of the adjustments posted to the financial statements during the audit process
• Material disclosure omissions
• Significant issues related to accounting policies, as described or in practice
• Expected modifications to the audit report
• Material weakness in internal controls identified during the audit
• Significant matters in relation to going concern, if applicable
• Results arising from the group audit		 Audit completion
report

PRIVATE AND CONFIDENTIAL 33

Appendix three

Representation letter

PRIVATE AND CONFIDENTIAL PRIVATE AND CONFIDENTIAL34

Appendix three: Representation letter

Auditing standards require us to obtain a letter from the board of trustees confirming various points, including that you have fulfilled your responsibility for the preparation of the financial statements, that relevant information has been provided to as us as auditors, and that you are satisfied the unadjusted differences and disclosure points are not material.

Where management have made statements to us during the audit, for example about the group’s plans or intentions, we might also ask you to confirm these statements.

For example we have included a specific point this year for the directors to confirm the accounting treatment of the new arrangements with Impakt.

These form part of a letter of representation that should be signed by the directors alongside the financial statements. We need to obtain this letter before signing the audit report.

PRIVATE AND CONFIDENTIAL 35

Appendix four

Factors impacting the tax charge for the year

PRIVATE AND CONFIDENTIAL PRIVATE AND CONFIDENTIAL36

Appendix four: Factors impacting the tax charge for the

year

Corporation tax:

As a company, the trading subsidiary Harbour Housing Services Limited is subject to Corporation Tax on its taxable trading profits.

The resulting tax charge of £3,780.05 has been recognized in the HHSL accounts for the year to 31/03/2025. It has also been recognised in the consolidated group accounts as an other expense.

Management have confirmed their plans regarding donating £10,000 of the taxable profits back to the parent charity. Such a donation must be treated like a distribution (akin to the payment of dividends) and therefore unless a legal obligation to make the payment exists, it must be accounted for at the point at which it is made. Likewise, there must be sufficient distributable reserves available to cover the donation.

However, for tax purposes, the payment can be bought back into the prior year tax computation if it is paid pay within 9 months of the reporting year end in question (by 31 December 2025).

The £10,000 donation has therefore been reflected as such in the HHSL tax computation for the year to 31/03/2025.

The remaining taxable profits of HHSL of £19,895 are subject to corporation tax at the small profits relief rate of 19%.

PRIVATE AND CONFIDENTIAL 37

Appendix five

Topical regulatory changes

PRIVATE AND CONFIDENTIAL PRIVATE AND CONFIDENTIAL38

Appendix five Topical regulatory changes

Upcoming changes to FRS 102

FRS 102 is changing for periods starting on or after 1 January 2026. The new rules are here: https:// media.frc.org.uk/documents/FRS_102_September_2024.pdf

The main changes within this standard are as follows:

More detail on the lease changes can be found here: https://pkf-francisclark.co.uk/insights/

frs-102-changes-to-lease-accounting-rules/

For revenue, there is no substitute for working through the five steps in detail. This will require a detailed understanding of the variety of contracts you issue.

Bringing leases onto the balance sheet will replace lease expenses with depreciation and interest, improving EBITDA. Consider this in setting bonus targets and EBITDA forecasts. There are smaller effects on many other common metrics.

For both revenue and leases, be sure to read paragraphs 1.361.68 of the updated FRS 102, which deal with transition.

PRIVATE AND CONFIDENTIAL 39

Appendix five Topical regulatory changes

Charities SORP 2026

The Charities SORP committee has developed a new edition of the Statement of Recommended Practice (SORP) for charity accounting to reflect the FRS 102 changes discussed on the previous slide.

This was published on 31 October 2025 and is available here: https://www.charitysorp.org/download-a-full-sorp

The Charities SORP will be mandatory for periods starting on or after 1 January 2026.

As well as the changes to revenue and leases discussed on the previous slide, the draft also includes

The new SORP applies to periods starting on or after 1 January 2026, so charities should prepare now.

For leases, aim to prepare a complete list of leases before the period starts, and assess your ‘obtainable borrowing’ rate close to day 1 of that period.

For revenue, review your current income streams and contracts to identify the amount and timing of income using the new 5-step revenue recognition model.

In understanding the revenue and lease changes, you can mostly rely on the summaries in the SORP, but also need to read paragraphs 1.36 to 1.68 of FRS 102 which set out transition arrangements. Paragraph 1.51 sets out what happens to leases on day 1 of your transition period.

Please also consider:

We covered the exposure draft changes in detail in our Charity Conference and supporting webinar series. If you missed this and would like to watch the webinars, QD» PKF please get in touch.

PRIVATE AND CONFIDENTIAL 40

Appendix five Topical regulatory changes

VAT

HMRC have recently issued a “one-to-many” VAT email to charities regarding their non-business activities and how VAT incurred on attributable expenditure is dealt with.

If HMRC discover errors, they charge interest at base rate plus 2.5%, so it is vital that your VAT accounting is compliant.

We recommend you consider the following:

If you would like to have a free initial chat with one of our VAT not-for-profit specialists, please let us know.

Charity Commission guidance on finances

The publicly available guidance was updated in September 2024 and can be found here: Improving your charity’s finances (CC12) - GOV.UK

It contains advice on how charities and trustees can and should:

There is also a useful summary of considerations for trustees regarding the finances of their charity, framed around 15 questions: Charity governance, finance and resilience: 15 questions trustees should ask - GOV.UK

Similar guidance is available relating to cybercrime and fraud.

PRIVATE AND CONFIDENTIAL 41

Appendix five Topical regulatory changes

Companies House changes

1. ID verification for directors and PSCs

are submitted (if after 18 Nov). The date for PSCs depends on whether they are also a director. Detail here.

From 18 November 2025, directors of companies, members of LLPs, and persons of significant control will need to verify their ID before you can file your confirmation statement.

People filing documents at Companies House, which might include your company secretary or financial controller, will also need to verify their ID unless they are part of an authorised corporate service provider like PKF Francis Clark.

Most people will do this by downloading the GOV.UK ID Check app to your smartphone and

This works for anyone with a biometric passport (any country) or UK driving license.

The process starts here: https://www.gov.uk/guidance/verifyyour-identity-for-companies-house

Your main contact in the audit team has access to a step-bystep guide if that is helpful.

Directors will need to do this before confirmation statements

PRIVATE AND CONFIDENTIAL 42

Appendix five Topical regulatory changes

Companies House changes

3. Company size thresholds increasing 50%

For financial years beginning on or after 6 April 2025, company size thresholds increase as follows:

Past: Revenue Total Assets Employees
Micro 632,000 316,000 10
Small 10,200,000 5,100,000 50
Medium 36,000,000 18,000,000 250
Future: Revenue Total Assets Employees
Micro 1,000,000 500,000 10
Small 15,000,000 7,500,000 50
Medium 54,000,000 27,000,000 250

If your figures are under or over two of the three thresholds for two consecutive years, you gain or lose the right to prepare accounts of that size.

For financial years beginning on or after 6 April 2025, when looking back at previous periods, work on the basis that the new thresholds had always been in place.

4. Reduction in directors’ report requirements

Several requirements for the directors’ report will be removed for periods starting on or after 6 April 2025.

Once these requirements have been deleted from the statutory instruments, they will no longer apply to any set of accounts, whatever their year-end.

Medium/large company directors’ reports will no longer need to discuss:

There is more detail on these changes available at https://www.legislation.gov.uk/uksi/2024/1303/made

PRIVATE AND CONFIDENTIAL 43

Appendix five Topical regulatory changes

Companies House changes

5. The end of filleted accounts for small companies, and Software-only filing

The Economic Crime and Corporate Transparency Act 2023 set out that

In June we were told both changes would start from 1 April 2027: https://changestoukcompanylaw.campaign.gov.uk/ changes-to-accounts/

However, on 5 July “one ally of” the business secretary (Jonathan Reynolds) told the Financial Times some of these plans would be reversed: https://www.ft.com/content/ 9d8fbbaa-b7e8-4b0b-bc92-9b7f24caaa3a

Another source (or possibly the same one) told the Guardian “we have paused them, Jonny is worried it’s too burdensome”.

The status of these changes is currently up in the air. “Paused” does not mean stopped, and it is possible that one or both still happens. It is too early to promise business owners they “will not” need to file P&Ls.

For software-only filing, at this point it is probably best not to put time into preparation. Our main accounts prep and tagging platforms already have this functionality, so if it does go ahead, we will be able to help.

6. Limits on shortening accounting periods

Companies will need to provide a business reason if they want to shorten their accounting period more than once within 5 years.

This will impact companies who shorten their periods by a day in order to achieve a filing extension.

Companies House have not issued a date for this, but it was announced in the same blog as the other measures effective from 1 April 2027.

7. Registered offices / registered email addresses

Companies should now have a registered office address that can sign for recorded deliveries, and a registered email address where Companies House can send updates.

Companies House have recently sent emails to registered email addresses around the ID verification process. If these weren’t brought to your attention (and should have been), check who has access to the address and how they are deciding who to forward things to.

PRIVATE AND CONFIDENTIAL 44

Appendix five Topical regulatory changes

UK Packaging Extended Producer Responsibility (EPR)

The Extended Producer Responsibility regime is intended to shift the cost of processing domestic packaging waste (collection, sorting, recycling) from local authorities to the businesses who import or supply the packaging.

These rules apply to UK businesses, subsidiaries and groups (but not charities) based on their statutory turnover, and the amount of packaging they import or supply.

‘Small’ producers with £1m+ turnover and 25+ tonnes of packaging need to report data on the packaging they import or supply each April, and pay a registration fee (currently either £631 or £1,216).

‘Large’ producers with £2m+ turnover and 50+ tonnes of packaging need to report data on their packaging each April and pay a registration fee, and may also need to fulfil recycling obligations and pay waste management fees.

Detail here:

https://www.gov.uk/government/collections/extendedproducer-responsibility-for-packaging-report-packaging-data

PRIVATE AND CONFIDENTIAL 45

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PRIVATE AND CONFIDENTIAL 46