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August 25, 2020 By Des Ingham Leave a Comment

Implementing A Voluntary Redundancy Scheme

No employer lays off any of their staff lightly, and it is usually the last option they turn to when their business is in trouble. But right now there are many businesses facing huge challenges and these will come to a head as the furlough scheme is wound down.

Protecting Your Business & Workforce

Voluntary Redundancy Schemes

A voluntary redundancy scheme may be a route that some businesses decide to go down in an effort to protect their business and their workforce from closure. But it is not always plain sailing setting up a scheme, there are pros and cons to this type of redundancy scheme.

The Correct Way To Set Up Voluntary Redundancy Schemes

There is an excellent article in the Irish News today (25th August 2020) by Andrew Lightburn discussing this very subject. Here are a few paragraphs from it looking at how to set up a voluntary redundancy scheme correctly:

“Employers can offer a minimum redundancy package such as contractual notice, statutory redundancy payment and any holiday monies owed. Whilst ordinarily that may entice employees where there is a decent chance of getting another job, in the current economic climate it is more likely that the offer of an enhanced redundancy package will be a better incentive for employees to leave.

“By way of background, a statutory redundancy payment is based on an employee’s age, length of service and gross weekly wage, which is capped at £560. There are a number of ways that this payment can be enhanced, such as removing the wage cap so that the redundancy pay is calculated on the employee’s full wage.

“Alternatively, more generous schemes may offer a flat rate for all employees, eg 1.5 weeks gross pay for each year or part-year worked.

“Due to new Northern Ireland regulations, the statutory redundancy payment of a furloughed employee who may be on a reduced wage must be calculated based on the employee’s standard full salary.

“In terms of the process to follow for a voluntary redundancy exercise, an employer would either invite all employees to make expressions of interest or restrict it to the specific areas or departments where the redundancies are required. The employer would then provide details of the redundancy package offer and wait to see whether the employees wished to apply for voluntary redundancy.

“However, the main problem with voluntary redundancies is that an employer has no control over who expresses an interest. It is, to some extent, a lottery. Invariably it is the employees with most to gain who will come forward, ie those with the longest service who will receive the biggest redundancy payments and notice periods. It could also be attractive to employees who may not wish to return to work after being on long term sick or maternity leave.

“Ultimately the employer can decide whether or not to accept an application for voluntary redundancy. But it does create the potential to cause awkwardness if an employee comes forward to say they want to leave the business and their request is subsequently refused.

“Overall, inviting applications for voluntary redundancy is regarded as a positive as the process can be quick, straightforward and potentially limits the risks when having to make several compulsory redundancies. It may even make the compulsory process easier in terms of numbers and timescales.

“Legally, employers would be well advised when accepting an employee’s application for voluntary redundancy to conclude it by way of a compromise agreement, particularly where an enhanced redundancy payment is being made.

“Although, there is no strict requirement for this and some employers will be content with a simple resignation from the employee in return for payment of the redundancy package, a compromise agreement assists in term of speed and ease, which may be of longer-term benefit to the business.

“The most important thing to consider is your target employees and whether the package offered incentivises them to apply, particularly if they have shorter service and are on lower salaries.”

Help & Advice For Your Business

Very good advice indeed. If you need help and advice in any financial aspect of the business you own or manage do not hesitate to get in touch with our dedicated team here at WHR Accountants on 028 3752 2909.

Filed Under: Voluntary Redundancy Schemes Tagged With: voluntary redundancy schemes

August 24, 2020 By Des Ingham Leave a Comment

The Importance Of Keeping Your Tax Payments In Good Order

There was a salutary tale a few days ago on why it is essential you never abuse the tax system and keep all your records and payments up to date. A London jeweller has been given an 11 year directorship disqualification after failing to comply with his tax obligations.

Abusing The Tax System Not Once But Twice

Abusing The Tax System

Below is an excerpt from an article on the Professional Jeweller website about how jeweller Daniel Brodie has been in trouble twice over abusing the tax system:

“Daniel Brodie from Temple Fortune in London has been handed a second ban from acting as a director in the promotion, formation or management of a company, starting on August 24, after failing to comply with tax obligations for a business for the second time.

“Brodie first breached a court order that was given to him for not paying the correct amount of tax for Avya Gems Limited in 2012, for which he was director. Then in 2017, it was discovered that he had broken these terms with another company, Jewelmark UK.

“Jewelmark UK Limited was incorporated in June 2010 and traded as a watches and jewellery wholesaler, trading from premises in Temple Fortune, North-West London.

“Daniel Brodie was first appointed a director of the company in June 2010 and resigned in July 2013, before being reappointed in September 2014.

“The jewellery wholesaler, however, began to struggle and in June 2017, the company entered into creditors’ voluntary liquidation. This brought Jewelmark UK to the attention of the Insolvency Service.

“Investigators uncovered Brodie failed to ensure Jewelmark UK complied with its statutory tax obligations and he had also breached a 2012 court order, which granted Brodie permission to act as a company director in lieu of a previous disqualification.

“In January 2012, Brodie was banned for four years after he failed to ensure a separate company he was a director of – Avya Gems Limited – complied with its statutory tax and filing obligations.

Correct Amount Of Tax Hadn`t Been Paid

“While the correct amount of tax hadn’t been paid by Avya Gems, Brodie benefited from dividends and operated a director’s loan account, which was overdrawn.

“Brodie secured from the courts in February 2012 an order that allowed him to continue acting as a director of limited companies, which would have covered his directorship of Jewelmark UK.

“The court granted this on the basis that Daniel Brodie complied with 21 conditions, but the jeweller failed to honour his commitments.

“Daniel Brodie breached restrictions that he could not receive payments that exceeded £8,000 gross per month from the companies. He also failed to publish in Jewelmark UK’s accounts copies of the 2012 court order and the 4-year disqualification undertaking.

“And similar to the misconduct displayed while he was director of Avya Gems, Daniel Brodie failed to ensure that Jewelmark UK complied with its statutory tax obligations, when he received more than £540,000 in director’s loan payments between September 2015 and June 2017.

“At the point of liquidation, Jewelmark had outstanding tax liabilities of more than £210,000.

Help With Tax Records & Returns

If you have a business that needs help with its tax records and tax returns, making sure you are 100% compliant at all times, give our offices a call and we will be able to assist you with this. Call us on 028 3752 2909.

Filed Under: Abusing The Tax System Tagged With: abusing the tax system

August 18, 2020 By Des Ingham Leave a Comment

Will Remote Working Be Here To Stay For Many Workers?

The global pandemic of Covid-19 has brought in a whole raft of changes to our everyday lives, from the closing down of community events and shows, to the concept of social distancing and the huge emphasis on sanitising our hands at every given opportunity. But the one biggest change has been in our working lives where a large percentage of workers are now working remotely from home.

Reduction In Harmful Emissions

Is Remote Working Here To Stay

Is remote working here to stay for many of these people, or when the threat of coronavirus fades will we see the vast majority go back to their offices? There are positives to the fact that many people are working from home, not least the chore of the daily commute to work, which has cut down on harmful emissions and given us a better quality of air in our towns and cities. Some people love working from home, they find it less stressful and they can look after their pets and take them for a walk during their break times. And of course there is money to be saved by not having to commute into work and pay for parking etc.

The Human Being Is A Social Animal

But remote working is not for everyone. The human being is a social animal and we miss that human contact and communication with our fellow workers that the office environment affords us. Zoom meetings are all well and good but it is no substitute for chatting with someone face to face in the flesh. We know that many people suffer with their mental health when they are distanced from their work colleagues.

There is no doubt that office life allows us to work collaboratively and creatively with other employees to get things done efficiently, brainstorm ideas around a table, and most importantly learn from colleagues around us. There may be some blend of remote working and office working as we move into the future but we do not think we have seen the beginning of the end for office working yet.

Forward Planning Is Essential

Businesses are in a very tricky situation at the moment. They have to balance the safety and mental health of their employees with the best way to get the maximum output from them. At WHR Accountants we can help you plan the best way forward for your particular business. Forward planning is essential to negotiate all the hurdles that will have to be overcome in the following weeks and months. If you need any help with your business get in touch with our accountancy firm here in Armagh by calling our offices on 028 3752 2909.

Filed Under: Is Remote Working Here To Stay Tagged With: is remote working here to stay

August 17, 2020 By Des Ingham Leave a Comment

UK Government Unveils Brexit Support Package For NI Businesses

The UK government have pledged their support to businesses in Northern Ireland during the Brexit transition period by unveiling a £355 million support package. This money will go towards the costs that will be involved with trading with the rest of the UK.

Brexit Support Package

Trader Support Services To Help Firms Handle New Bureaucracy

A recent article in The Guardian commented that:

`£200m would be spent on a trader support service (TSS) to help firms handle new bureaucracy to move goods across the Irish Sea, turning the government into a de facto customs agent for traders.

A further £155m will be spent on digital technology to streamline processes required by the new internal border created by the Northern Irish protocol, part of the Brexit deal that aligns the region to the UK customs territory and the EU customs code.

It means all businesses sending goods to the region from Great Britain will have to make formal declarations for the first time.`

Getting Traders Ready For The Transition Period

The government have also pledged £300 million in funding for the Peace Plus programme in Northern Ireland and cabinet office minister Michael Gove is quoted in the same Guardian article, saying about these funding programmes:

“Today’s £650m investment underlines our absolute commitment to the people and businesses of Northern Ireland as we move towards the end of the transition period.”

“As we continue to engage with businesses, and our discussions with the EU proceed, we will update these resources to ensure that traders are ready for the end of the transition period.”

Economic Indicators Making Grim Reading

The support package drawn up is welcome news and will be much needed as the economic indicators make pretty grim reading for the next few months. Whilst GDP is expected to fall by around 9%, unemployment is forecast to rise by a further 8%. Forecasts have to be taken with a rather large pinch of salt right now as the people drawing them up have no idea whether we will have a big second wave of coronavirus infections which could lead to the shutting down of large sectors of the economy once more. If this happens the economy will be even deeper trouble.

It is vitally important you keep a handle on all your incomings and outgoings if you run a business. Failure to do this when times are rough can lead to catastrophic consequences. If you need help with keeping a grip on your finances, business planning and forecasting, please give our accountancy team a call on 028 3752 2909 for an initial consultation.

Filed Under: Brexit Support Package Tagged With: brexit support package

August 11, 2020 By Des Ingham Leave a Comment

Business Activity Increases But Unemployment Rises

A recent survey by the Ulster Bank has revealed that business activity in Northern Ireland picked up last month, which hopefully shows that the economy is slowly recovering after lockdown. But worryingly there has been a steep rise in unemployment which will have to be checked if we are to see a sustained recovery.

Business Activity Increases In Northern Ireland

Retail, Manufacturing & Construction Picking Up

The survey showed that output and new orders were increasing at a healthy rate after the heavy falls during March onwards, with retail, manufacturing and construction showing strong performances. However the biggest sector in the Northern Ireland economy, the services industry, has continued to stagnate.

Mixed Sales Performances

There has been mixed results for many companies, with some seeing decent sales performances and others finding it hard to get back to a competitive level in their sector.

If you compare the economic results so far with the rest of the UK, Northern Ireland has fared better than both Scotland and Wales but has not done as well as England.

Commenting on the economic climate in Northern Ireland, Ulster Bank chief economist Richard Ramsey is quoted in a BBC News article as saying:

“A further easing of lockdown restrictions in July helped secure growth in private sector activity for the first time in 17 months,” he said.

But he warned there will be further job losses ahead.

“The phasing out of the furlough scheme is anticipated to lead to further redundancies in the months ahead,” he said.

“While the return to growth is welcome news it merely marks the start of a long road to recovery. There remains a huge gap relative to pre-pandemic levels of output/activity.

“Bridging this gap will take years not months and the twin challenges of Covid-19 and Brexit will have to be navigated along the way.”

Partnering With WHR Accountants

There are bound to be many bumps in the road as the economy and society as a whole recovers from the effects of Covid-19. And if the infection rates rise as communities open up further and schools re-open we could be in for a very rough ride indeed. But let`s think positively and hope that we are over the worst of it.

If you have a business and you want a dedicated, professional accountancy firm that you can partner with to help you through the next few weeks, months and years we are here to help you.

The first thing to do is contact us so we can have an informal chat about your business and see what areas we can help you with. So if you can give our offices a call on 028 3752 2909 we would be very pleased to discuss the options available and give you an indication of how we can help your business survive, thrive and grow.

Filed Under: Business Activity Increases In Northern Ireland Tagged With: business activity increases in Northern Ireland

August 10, 2020 By Des Ingham Leave a Comment

Will School`s Opening Mean The Closure Of Pubs & Restaurants?

Prime Minister Boris Johnson has been making noises in the last few days about how it is morally essential to to get children back to school as soon as possible after the long break during lockdown and nobody can really argue with these sentiments.

Should There Be Another Lockdown Of Pubs & Restaurants

Should There Be Another Lockdown Of Pubs & Restaurants

However there has also been a lot of talk about why the pubs and restaurants have opened so quickly and should there be another lockdown of these businesses to ensure that infection rates stay low when children go back to school.

It is easy to make an argument for children`s education being one of the biggest concerns, not to mention their mental health, as they have remained isolated from their fellow pupils during the pandemic. But does children going back to school have to be at the detriment of the pubs and restaurants?

A Further Lockdown May Tip Them Over The Edge

Many of these establishments are hanging on by their fingertips now they have opened up once again. The losses they have accrued during closure, allied to the fact that now they are allowed less people at any one time into their premises, means that a lot are just about breaking even right now, and a further lockdown will most certainly tip them over the edge into insolvency.

This would be a tragedy, so many of these businesses have worked day and night to make a living and they employ many people who would probably find it difficult to get another job in today`s economic climate if they were made redundant.

We Should Not Shut These Places Down Without Being Aware Of The Consequences

As long as all the pubs and restaurants are applying all the restrictions and doing everything by the book we feel that it is important for them and the economy as a whole that they stay open for business. We are talking about peoples livelihoods here and we should not shut these places down without being very aware of the awful consequences that would entail.

We are walking a tightrope right now, infection rates are creeping up in many parts of the UK as well as in some other countries in Europe, and although the hospital beds are not overflowing with Covid-19 victims at this moment in time we must all be very vigilant and keep to the social distancing guidelines and wash our hands frequently.

That`s all for now, all that there is left to say is that if you have a business that needs the help of an experienced accountants then give our offices here in Armagh a call on 028 3752 2909.

Filed Under: Should There Be Another Lockdown Of Pubs & Restaurants Tagged With: should there be another lockdown of pubs & restaurants

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MAKING TAX DIGITAL WORKSHOPS (MTD):

We are holding a series of workshops in our office on Tues & Thurs during Nov & Dec to help explain MTD changes & how to prepare for them. To book onto one of these workshops please give our office a call on 028 3752 2909

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