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Month: September 2021

‘No jab, no job?’ and other workplace challenges

Written by admin on . Posted in COVID-19, Employment Law. No Comments on ‘No jab, no job?’ and other workplace challenges

Now that more employees have been returning to the workplace, employers face several potentially challenging issues. Vaccination is one of the most problematic – businesses may wish to insist on employees being vaccinated, but there is concern that such policies could leave employers open to a legal claim of unfair dismissal or discrimination.

Reluctance to return

If workers feel they are not able to return to the workplace, this cannot be treated as a redundancy situation because the employee’s job still exists. Where an employee has been successfully working from home, it will be quite difficult for the employer to then reject a request to make home or flexible working permanent. Developing a clear and sustainable hybrid working model, where suitable for the position, may be the sensible way forward.

Safeguarding

Over the last 18 months most businesses have already invested in safeguarding measures for employees – from additional sanitising precautions to barriers in the workplace between desks and workstations. As more people return, additional measures may be required, including testing.

There is no reason why an employer cannot implement a policy requiring regular Covid-19 testing as a condition for workplace attendance. This could be achieved by:

  • the employer buying tests and setting up workplace testing;
  • paying an approved provider; or
  • asking employees to arrange their own testing.

Employers should draw up a clear plan on how positive test results are to be managed. Other issues to iron out may be around how testing will apply to everyone attending the workplace, such as visitors, or only employees.

 Vaccination policy

Insisting on employees being vaccinated as a condition of workplace attendance is a more contentious issue, especially if it’s just one or two employees who are opposed to immunisation. UK employment rights mean that employers are expected to tread carefully.

Although there is no legal reason why an employer cannot adopt a full vaccination policy, this is a risky approach to take. Along with potential legal claims, it could also mean the resignation of key personnel. A more practical approach is for employers to encourage employees to get vaccinated support this by offering time off during working hours to do so and where possible discuss concerns. Homeworking might be the easiest way to deal with the issue of an employee who does not wish to be vaccinated and handling their colleagues’ expectations.

The employment service ACAS has produced a guide to workplace testing for Covid-19.

Photo by Daniel Schludi on Unsplash

Are you ready for MTD?

Written by admin on . Posted in Income Tax, Making Tax Digital, MTD. No Comments on Are you ready for MTD?

Making Tax Digital for income tax self-assessment may still be 18 months away, but if you are self-employed or a landlord, it is time to get ready for digital record keeping, ahead of the deadline.

MTD ITSA (as it’s known) is set to begin on 6 April 2023, and it looks like businesses will need to enter the new regime from the first accounting period commencing on or after 1 April 2023; the proposed basis period rules deem an accounting period ending on 31 March as ending on 5 April.

More than four million taxpayers are set to start MTD ITSA from 6 April 2023, and the current timetable has met fierce opposition. The limited nature of the pilot scheme has not helped.

How MTD ITSA will work

MTD ITSA will initially apply to the self-employed and landlords with total annual turnover exceeding £10,000. There is no exclusion if you have, say, £6,000 of trading income and £6,000 of rental income.

  • Income and expenditure will have to be recorded digitally. Spreadsheets are fine, but, if you do it yourself, MTD-compatible software will be needed to submit quarterly updates.
  • A quarterly summary of income and expenses must be sent to HMRC, with a final declaration replacing the self assessment tax return.
  • There will be a new penalty system and no soft landing. However, a late filing penalty will not apply until four quarterly submissions are late.

The biggest impact will be for those currently maintaining paper records. A move to spreadsheets should not be too onerous, however, and it will then be fairly straightforward to use these as a basis for the filing requirements.

If you are thinking of moving to a software package, be warned there are currently only seven providers of suitable software. HMRC has issued guidance on MTD ITSA and of course we’re here to help.

Photo by Javier Allegue Barros on Unsplash

Managing the end of furlough

Written by admin on . Posted in COVID-19, Employment Law, Employment Tax, Redundancy. No Comments on Managing the end of furlough

After playing a crucial part in managing the impact of Covid-19, the Coronavirus Job Retention Scheme (CJRS) is set to end on 30 September. Although some business sectors, such as hospitality, are currently seeing severe staff shortages, other employers may struggle when furlough is phased out.

For September, the CJRS only covers 60% of an employee’s wages, up to a cap of £1,875, with the employer having to top this up to at least 80%. All claims must be made by 14 October.

Redundancies

If you find you do need to restructure your staffing levels, any furloughed staff who are to be made redundant have the same legal rights as any other employees. So any decisions need to be mindful of unlawful discrimination or unfair dismissal.

A business may select staff for redundancy based purely on the fact that they were the ones to be furloughed. The level of risk to this approach will depend on the reasons why staff were chosen for furlough, the selection process used to do this, and whether these were fair. Large groups of 20 or more redundancies will require collective as well as individual consultation.

Alternatives

There are a few alternatives to redundancies to consider:

  • A hiring freeze;
  • Redeployment of staff to different areas of your business;
  • Postponing salary increases; or
  • A temporary reduction in hours across the workforce.

A temporary reduction in hours could be run on a similar basis to flexible furlough, just without the government support. Experienced employees are retained, and employees should be better off compared to being made redundant and having to claim universal credit. Employee consent is required to alter contractual terms.

Payments and support

If you do have to make employees redundant then they are entitled to statutory redundancy payment (after two years of employment) and untaken holiday pay. There may also be notice pay depending on circumstances.

the main form of support for most employees until they find alternative employment will be universal credit. This is a very different animal to furlough, and for many there will be a big drop in income.

This will certainly be the case for higher earners because universal credit doesn’t take account of previous income levels. Anyone with a high earning partner or significant savings may not be entitled to universal credit at all.

Guidance to making staff redundant can be found here. Let me know if you need bespoke advice in this area. I can be reached on 01691 655 060 x Ext.7 or by email at femi.ogunshakin@nexa.law

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No room for giveaways in OBR risk report

Written by admin on . Posted in Budget, COVID-19. No Comments on No room for giveaways in OBR risk report

The Office for Budget Responsibility has given Rishi Sunak its new worry list. It gives the Chancellor little wriggle-room for potential Budget generosity.

Every other year the Office for Budget Responsibility (OBR) must issue a Fiscal Risks Report (FRR). Unlike the six-monthly economic outlooks the OBR produces for Budgets and (theoretically) Spring Statements, the FRR takes a longer view of the UK’s financial position and the risks it faces. Past reports have been, in the OBR’s words, “encyclopaedic”, but in 2021, the FRR focused on just three areas:

Coronavirus (Covid-19) pandemic The OBR says that despite all that has been spent to date, there is an as yet unfunded need for another £10 billion a year to cover:

  •  NHS programmes such as test and trace, revaccinations and the backlog of
  • 5 million elective treatments;
  • catch-up schooling for pupils; and
  • ‘the holes in the fareboxes’ of the railways and Transport for London created by the collapse in passenger numbers.

Climate change Although the government has committed to the climate change agenda, the OBR highlights one elephant in the room that would frighten any politician: the loss of revenue from fuel and excise duties in an all-electric world. The OBR says these are worth about 1.5% of Gross Domestic Product (GDP) – £33 billion. In the short term some of the lost income may be replaced by carbon taxes, but in the long term the hole will have to be filled.

Government debt Government debt is currently just about equal to one year’s output of the UK economy, against 40% in 1980. However, at present the net interest the government pays on that debt is less than a quarter of the 1980 bill (as a proportion of GDP). Ultra-low interest rates are the reason, but the corollary is that even only a small rise in rates would increase that cost significantly.

Last month, the Chancellor asked the OBR to work on its next six-monthly report for presentation on 27 October. That might be Budget Day, although many commentators believe Mr Sunak will wait until spring, ditching the Autumn Budget once again. Whether or not that happens, the OBR’s message is that the Chancellor cannot afford any giveaways. You have been warned.

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Scammers step-up sophisticated frauds

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One side effect of the pandemic has been a surge in scams, with around £535 million reported as lost to investment fraud in the year to April 2021. One investment scam involving a retired detective shows just how sophisticated they can be.

Cloning fraud

A retired detective was pursuing a recommendation to invest in Vanguard, but when she attempted to find out more about the opportunity a Google search led to a cloned website. Further checks showed Vanguard’s logo, address and company number all matched, and the paperwork provided was convincing. The investor even had to comply with money laundering requirements.

Unlike many scams, the funds did not immediately vanish; the investment was available online for a few days. Encouraged by this, along with assurances regarding financial protection, the investor transferred a further substantial sum. It was only at this point that the scam became apparent, because this amount failed to appear on the online account. A call to Vanguard’s customer service confirmed the worst.

Contingent reimbursement model (CRM)

Most major banks are signed up to the CRM. They promise to refund scammed customers provided they were not unduly negligent. The idea is that the financial sector should be familiar with scams and how they operate, whereas the public generally is not.

The detective’s bank initially refused to refund the full investment, but ultimately relented. There are some scams so convincing that even an experienced customer cannot spot them.

Prevention

No website, text, phone call or product should be taken at face value, however credible. The FCA maintains a warning list, and this should always be consulted. It is not a quick check because a search can give several results, but what is very useful is that the correct contact details are provided for the genuine firm.

The payee’s bank details should be carefully checked since they obviously cannot match exactly those of the genuine firm. And of course, banks and other genuine financial institutions will not ask for your financial details over unsolicited phone calls, text messages or emails.

The FCA’s warning list also provides useful advice on how to avoid financial scams in general.

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