Firms freed from ‘pen-pushing paperwork’ and costly red tape in business reporting overhaul

• Common sense changes to save businesses more than £450 million a year, with even further savings to come.
• Paperwork reporting replaced with digital versions, while Government explores how AI can further drive efficiencies.
• Simpler rules will make British businesses more attractive to investors, driving the creation of good jobs that make the country better off.

Family firms and businesses across the country will be freed from excessive, time-consuming paperwork, as the Government publishes further plans to slash outdated reporting rules. This comes after reforms were introduced to save businesses more than £450 million a year.

Corporate reporting keeps firms transparent and investors informed, but today’s rules are too complex and burdensome for every business, from multinational companies to the removals firm down the road.

Currently, the rules can see small chains of cafes and hotels or a furniture manufacturer having to having to spend thousands of pounds on reports, a nonsensical position for a business owner to be in when they’re busy trying to provide the best for their customers.

The average annual report and accounts of some businesses now run to 98,000 words, longer than J. R. R. Tolkien’s ‘The Hobbit’. For FTSE 100 companies, the average is even higher, at 152,000 words.

Today, government is tackling this burden with proposals for simpler reporting rules for SMEs, exempting more businesses from audits, whilst also moving to a digital-first approach by making electronic communications to shareholders the default, ending reliance on piles of paperwork.

This is a key measure in the Prime Minister’s pledge for Government to be a circuit breaker, bringing down costs for business, creating a better environment for firms to grow and invest and delivering good growth in every postcode.

In particular, small and medium sized businesses who often lack the resources to spend hours combing through paperwork, will be taken out of certain forms of reporting entirely, freeing up more time to focus on growing their business and investing in their communities.

Business Secretary Jonathan Reynolds said:

No-one goes into business to fill out forms. For years, hardworking firms in this country have been weighed down by pen-pushing paperwork and frustrating costs, ticking boxes that do nothing to help them grow their business.

We’re stripping back outdated bureaucracy and building a common-sense system fit for a 21st-century economy. This will cut the cost of doing business, giving breathing room to bosses across the country, and free them up to focus on what they do best, creating jobs and growth.

Plans are already underway to scrap director’s reports and expand exemptions from providing strategic reports which are expected to save around 230 million annually, allowing more breathing space for businesses to invest in staff, equipment and expansion.

Ensuring regulation works for a modern economy is also an essential component of our Industrial Strategy, cutting red tape by 25% to help deliver infrastructure investment in the places that need it, planning reforms to let builders build, help with energy costs for over 10,000 businesses and R&D funding for Britain’s most innovative companies.

Working alongside the growing use of AI in business, this innovation will help transform how companies manage reporting and compliance, freeing up staff time currently spent on administrative tasks so it can be redirected towards innovation and growth.

Reduced administrative costs mean businesses have more room to keep prices competitive, particularly for family firms and smaller businesses operating on tighter margins.

Jordan Cummins, UK Competitiveness Director, CBI, said:

Corporate reporting is a central piece of investor and market confidence, but it’s also a resource heavy process for many businesses.

Moves to modernise our reporting regime are welcome and firms across the UK will look forward to helping government and regulators land on a futureproofed and agile framework.

James Ashton, Chief Executive of the Quoted Companies Alliance said: 

We welcome this consultation and the Government’s continued focus on a simpler, more proportionate framework for companies.

Annual reports play an important role in shareholder communication, but reforms should help companies focus on growth and productivity while maintaining trust and confidence.

We look forward to working with government to ensure these changes support a more competitive and attractive environment for quoted companies.

Background:

• A consultation will open on 7 September 2026 and will close for responses on 30 November 2026.
• Average annual report length figures – ANNUAL REPORTS HAVE BECOME ‘EPIC NOVELS’ AS UK COMPANIES FACE GROWING REPORTING BURDEN – The QCA
• Figures on savings for businesses can be found here: Annex_A_Technical_Annex_FINAL.pdf The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 - Impact Assessment

Our new proposals to streamline and rationalise reporting include:

• Clarifying who the annual report and accounts are for and creating a lighter regulatory load for small and medium-sized enterprises (SMEs), including allowing some medium-sized companies to qualify for audit exemption.
• Simplifying which companies are required to report different types of information, including testing the merits of non-financial reporting requirements for private companies
• Streamlining financial reporting, the strategic report, and remuneration reporting, while ensuring corporate governance reporting is flexible and proportionate.
• Making the UK’s financial reporting law clearer and more coherent, while replacing the complex rules on distributable profits and capital maintenance with a solvency-based regime.
• Embracing digital communications and futureproofing our corporate reporting framework.