The “boomer” population was used to the idea that you could have a job for life. That loyalty to your employer, and their ability to guarantee continuing employment, was something to rely on.

How things have changed.

Since the late twentieth century, employment has become a more transient affair. There are very few in the employed workforce who would believe in absolute job security and current and past world events have only increased job insecurity. For example:

• The fallout from the COVID pandemic, particularly lockdowns.
• Disruption due to BREXIT.
• Global tensions, in Ukraine, and more recently Israel.

Which is why there may be an argument for securing income from multiple sources.

Ideas for income streams you may be able to cultivate

The following suggestions may or may not suit your circumstances, but most of us will have options to supplement our income. The key is to explore these options.

Individuals

• Rent out your drive or DIY equipment.
• Rent a room in your home.
• If you have the capital, buy and let property and keep the day job.
• Turn your hobby into a small business utilising online shopping platform such as Etsy.com.
• Offer to write copy for business owners on your specialist topic.
• Hire your car to third parties.
• What other skills do you have? Look for part-time employment in more than one sector. For example, drive a taxi and deliver for supermarkets.

Business owners

• Sub-let surplus office space, warehousing, or factory space.
• Do you have under-utilised plant, vehicles, or other equipment that you could hire out?
• Do you have staff that you want to retain in your business long-term that you could sub-contract to other firms for limited periods?
• Could you franchise your business?

And last, but very definitely not least:

• Could your business develop an online sales platform?

Let’s take a look at your options

If you would like to explore your options, pick up the phone. Having all your income sourced from one source – eggs in one basket – may not be the best option.

We are still waiting for the government to introduce secondary legislation that will oblige directors and others with significant control – so-called PSCs – to verify their identity in order to file documents or set up a company at Companies House.

According to Companies House this will:

“…deter those wishing to use companies for illegal purposes.”

Who needs to verify their identity

For new companies, all directors and people with significant control (PSCs) will need to complete identity verification.

Identity verification will also apply to other registration types. For example, any members of a limited liability partnership (LLP) will also need to verify their identity.

For existing companies, all directors (or equivalent) and PSCs will have a transition period to verify their identity with Companies House.

Anyone acting on behalf of a company will also need to verify their identity before they can file information at Companies House.

Company owners can verify directly with Companies House, or through an authorised agent.

You can be assured that if we act for your company, we will help you take steps to sort out this verification process.

When will verification apply from?

The following notes are copied from a GOV.UK factsheet.

For new directors, identity verification must take place before an application for the formation of a company is delivered to the Registrar. If PSCs are not verified within a short time after the incorporation of a company, they will commit a criminal offence. Post-incorporation, a director must verify their identity as soon as possible and must do so before their appointment is notified to the Registrar by a company. Individual PSCs will have a 14-day period after registering with the Registrar in which to verify their identity. For Relevant Legal Entities, this period will be 28 days. Relevant Legal Entities will need to provide the name of their verified relevant officer.

A relevant legal entity (RLE) is a company or organisation that has a significant degree of influence or control over another company. RLEs are the same as people with significant control (PSCs), but they are corporate entities rather than individual people.

Anyone wishing to file documents with the Registrar will need to verify their identity before they do so unless they are an employee or officer of an authorised corporate service provider or subject to an identity verification exception made in secondary legislation.

In general, Companies House expect identity verification to be a one-off requirement. Once a person is verified, they obtain a verified status. However, there may be instances where re-verification is required, for example if the Registrar has reason to doubt the validity of the identity verification, such as on suspicion of fraud. The events that will trigger the requirement to reverify will be set out in secondary legislation.

The following changes were enacted from 6 April 2024. These changes apply to England, Wales and Scotland. Northern Ireland is not included as employment law is devolved.

The information that follows is reproduced from a post on the House of Commons Library at https://commonslibrary.parliament.uk/what-employment-laws-are-changing-from-april-2024/#:~:text=New%20legislation%20has%20expanded%20rights,effect%20from%206%20April%202024.

Changes to flexible working

Employees can now make two rather than one request a year for flexible working, and the deadline for employers to respond to requests has been reduced from three to two months.

Employers will also have to explain the reasons for denying any request, and employees no longer have to explain the impact of their request. However, the list of reasons employers can use to deny requests is remaining the same, including factors such as cost to the business or impact on quality, performance or ability to meet customer demand.

Carer’s leave

Employees are now entitled to take one week of unpaid leave a year if they have caring responsibilities.

This applies to any employees who are caring for a spouse, civil partner, child, parent or other dependant who needs care because of a disability, old age or any illness or injury likely to require at least three months of care. The leave entitlement is available from the first day of employment with no qualifying period.

Increased protection against redundancy for pregnant employees

Employees taking certain types of parental leave now have protection from redundancy for at least 18 months. This protection means that if their role is made redundant their employer must give them first refusal of any other vacancies; however, they can still be made redundant if no appropriate vacancy is available. Previously, employees only had this protection during their period of maternity, adoption or shared parental leave.

Protection now begins on the day the employer is first notified of the employee’s pregnancy and ends 18 months after the date of the child’s birth. These protections also now extend to 18 months after the date of adoption for parents taking adoption leave or 18 months after the child’s birth in cases where a parent is taking at least six weeks of shared parental leave.

More flexibility for paternity leave

Employees taking statutory paternity leave (and pay, if they are eligible) can now split their two weeks’ entitlement into two separate one-week blocks, rather than having to take them both together. They can also take their two weeks at any time within the first year after their child’s birth, rather than within only the first eight weeks after birth as previously required.

Employees now have to give employers 28 days’ notice for each week of leave, down from 15-weeks’ notice previously, before taking leave. However, they still need to give notice of their upcoming entitlement 15 weeks before the expected date of birth.

Companies House are working on detailed changes that will require small and micro sized companies to file information about their turnover and profits at Companies House.

Once filed, this data will be available to anyone searching affected companies’ records at Companies House.

At present, smaller companies can file abridged accounts that do not include a director’s report or a detailed profit and loss account.

What is a “micro” or “small” company?

Companies House define these as:

A company is ‘small’ if, in a year, it satisfies any 2 of the following criteria:

• a turnover of £10.2 million or less
• £5.1 million or less on its balance sheet
• 50 employees or fewer

A company is a ‘micro-entity’ if, in a year, it satisfies any 2 of the following criteria:

• a turnover of £632,000 or less
• £316,000 or less on its balance sheet
• 10 employees or fewer

When will this filing change occur?

The requirement to file the additional information will require secondary legislation. The process has started and could become law at any time in the next two years.

And to be clear, small companies will need to file a profit and loss account and a directors’ report, micro-entities to file a profit and loss account.

The option to file abridged accounts will be removed for both.

At present, there is no definition of the detailed information on trading that will be required. It could be limited to turnover and net profit, or it could include more detailed filing of direct costs and overheads.

For everyone’s eyes

The impact for small companies, who are used to protecting their turnover, trading margins and overheads (including salary details) from the public gaze, could be challenging.

For example:

• competitors could work out your trading margins and undercut you,
• it may bias buyers (your prospects) towards companies that have a larger, well established trading base,
• your profit and loss data could be used against you in a trading dispute,
• for micro companies that are basically “one-person bands” it may be possible to work out how much the business owner is being paid.

Of all the changes Companies House are presently considering, this is the one change that could prejudice the trading position of smaller incorporated businesses.

We await the fine print that will clarify exactly what needs to be filed, and from when as soon as the details secondary legislation is published. Meantime, if you have concerns about this future change in corporate transparency, please call.

In a recent press release, HMRC underlined the benefits to smaller businesses from the increase in the VAT registration threshold and the business rates freeze.

Here’s what they said:

“Small businesses have received a boost as the VAT registration threshold is raised from £85,000 to £90,000, and £4.3 billion of business rates relief comes into force.

“Recognising the inflationary pressures facing small businesses, especially with energy bills, the Chancellor Jeremy Hunt announced a raft of measures to support them at Spring Budget, sticking to its plan to grow the economy and reward hard work. Raising the threshold will take 28,000 businesses out of paying VAT altogether, and ensure the UK has a higher threshold than any EU Member State and joint highest in the Organisation for Economic Co-operation and Development (OECD).

“The small business multiplier for business rates will also be frozen from today for a fourth consecutive year, protecting over a million ratepayers from a 6.6% increase in their bills. The measure is part of the £4.3 billion business rates support package announced at Autumn Statement that includes the 12-month extension of the 75% relief for 230,000 Retail, Hospitality and Leisure (RHL) properties…”.

In summary, the changes will result in:

• 28,000 small businesses freed from paying VAT, encouraging them to invest and grow as the threshold is raised from £85,000 to £90,000; and
• over one million properties protected from higher bills by freezing the small business rates multiplier for a fourth consecutive year.