The Department for Business, Innovation, Science and Trade (BIST) has published the long-awaited consultation on corporate reporting, seeking views on how the rules could be modernised to better meet the needs of companies, investors and the wider economy. The Government describes the consultation as a “once-in-a-generation” opportunity to reset the UK’s corporate reporting framework. Although the primary focus is on annual reports, significant changes are also proposed in relation to AGMs, dividends and shareholder communications.
In this briefing we summarise the key proposals. In some areas, the Government has set out what it intends to do, but with certain details left to be worked out; in other areas, the Government is more open-minded and asks for views on whether a proposal should be taken forward. For simplicity, this briefing generally refers to changes that “would” be introduced; but in all cases this will depend on responses to the consultation and what the Government ultimately decides to do. With that in mind, companies should treat the proposals as a strong indication of direction of travel, rather than settled policy.
The proposals described below are additional to those announced in October 2025: see the below, “October 2025 Policy Statement”.
Timing
The consultation is open for 12 weeks, closing on 30 November 2026, with the Government aiming to publish a response by the end of May 2027. It will work closely with the FCA, PRA and FRC on the proposals, in particular, to ensure alignment with the FCA’s forthcoming review of the Disclosure Guidance and Transparency Rules (DTR) and alignment with the UK Sustainability Reporting Standards (SRS) disclosure obligations. Further consultations may follow on specific proposals. Amending legislation will then need to be drafted and taken through Parliament.
As a result, none of the proposed changes are likely to come into force until next summer at the earliest and, given the breadth and ambition of the reforms, implementation may in fact be phased in over a number of years. Corporate reporting and AGMs in 2027 are therefore unlikely to be affected.
Key proposals
- Rationalise the number of company size categories for reporting purposes
- Permit medium-sized companies to qualify for the same exemptions from disclosure as small companies
- Create a new category of “very large” companies that would be required to disclose certain non-financial information
- Permit more companies to qualify for exemption from audit
- Move most of the detailed requirements for annual reports that are currently set out in legislation into accounting standards
- Reduce the amount of information required in a strategic report
- Reduce the number of companies that are required to report on their corporate governance arrangements
- Reduce the amount of information required in a remuneration report
- Drop the requirement for an annual “advisory” shareholder vote on the remuneration report
- Make electronic communication the default method for companies to send information to shareholders
- Move to a solvency-based model for assessing the lawfulness of dividends
- Make clear that, as a matter of law, AGMs can be held fully virtually
October 2025 Policy StatementIn October 2025 the Government published a Policy Statement confirming it intends to introduce various changes designed to reduce the corporate reporting burden. In particular:
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Core principles
In developing its proposals, the Government has had regard to five core principles:
- Clarity of purpose: the annual report and accounts should provide financially material and decision-useful information to investors and creditors.
- Flexibility and trust: companies should be trusted to tailor their disclosures to the needs of their particular investors and creditors.
- Simplicity and coherence: requirements should not be duplicated across legislation, accounting standards and regulatory frameworks.
- Proportionality: requirements should reflect company size, ownership structure and economic impact.
- Fit for the future: the framework should be flexible to adapt to a changing world economy and take advantage of the opportunities of digital reporting and emerging technologies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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