After Furlough , what next?

Do you need to consider redundancies ? See

Your legal obligations may include

Reference: Trade Union and Labour Relations (Consolidation) Act 1992, Part IV, Chapter 11

The government must help employees facing redundancy. To do this, advance notification of potential redundancies is required from employers. Failure to comply with the statutory notification requirements without good cause may result in prosecution and a fine, on summary conviction, for the company and/or officers of the company.

Where employers are furloughing their staff and they are not contemplating dismissing 20 or more staff in a single establishment there is no requirement to carry out a formal consultation and notify the Secretary of State

You are required  by law to notify the Redundancy Payments Service ( RPS) of a proposal to dismiss 20 or more employees as redundant at one establishment within a period of 90 days or less.

If you operate from more than one site , each site is treated separately for notification and consultation purposes. An establishment is the site where an employee is assigned to work . You must complete a form HR1: Advanced Notification of Redundancies ,  for each site where 20 or more redundancies are proposed .

Where employers are furloughing their staff and they are not contemplating dismissing 20 or more staff in a single establishment there is no requirement to carry out a formal consultation and notify the Secretary of State ( using HR1)

Your minimum period for notification and consultation for:

  • Between 20 and 99 redundancies at one of your establishments , is at least 30 days before the first dismissal
  • 100 or more redundancies at one of your establishments , is at least 45 days before the first dismissal.

You must notify the Government at least 30/45 days before the first dismissal and before you issue any individual notices of dismissal

Practical tips for effective consultation

  • The importance of detailed planning . Consider using an Employment Lawyer , at least to provide you with a framework and template letters.
  • Establishing the business case for redundancies . Can you avoid them ?  Can you redeploy? What are your reasons for the proposed redundancies ?
  • Establish proposed numbers and timescale . How many ? Are they all at one ‘establishment’? When are the redundancies likely to take place ?
  • Identifying appropriate selection pools. Who may be affected  ? What categories ?
  • Identifying proposed selection criteria . What will you use ? Do you have performance data ? Is your criteria objective and fairly and consistently applied ?  Can you ensure you retain the best employees in terms of skills and expertise to meet the future needs of the business?
  • Establishing redundancy terms . If no terms are in existence , specific ones will have to be formulated. These may include voluntary as well as compulsory terms. Wil you use Settlement agreements ? Will employees have to work their notice or stay until a defined point in time ? How will payments be treated for the purposes of tax ?
  • Identifying outplacement and other support . Will you offer any support to redundant employees ? Job fairs , CV preparation , interview skills , time off for interviews ?  
  • Preparing appropriate communications. Key communications will include a letter sent directly to all affected employees . Take care to include employees on long-term sick leave, maternity , paternity, shared parental, adoption or parental leave, secondment, or holiday . Do not forget where employees have elected representatives, the arrangement for that election, numbers elected , who can stand, and the process of election must be explained . You may need to also consider communications to customers , suppliers , press releases etc .
  • Developing a timetable for consultation . Is the timescale realistic given commercial pressures ? Does it meet regulatory requirements and legal constraints ?
  • Allocating responsibilities . Who is doing what and when ? Who is controlling the process? Diarise key meetings .

Hopefully the above is helpful , should you find yourself in this situation . Please do speak to us to see if we can offer and assistance . 7

Accountants poised to help firms during difficult times

City AM ’s Ian Hall argues that good accountants’ services “have heightened relative value in these tough times,” noting that businesses would be well advised not to give in to the temptation to cut back on accounting costs.

Mike Suffield, director of professional insights at the ACCA, says: “Accountants help navigate the Government support available, manage liquidity and cashflow in the near term. They will build forecasts and review business models as organisations adapt and look to identify opportunities as they and the economy emerge from the pandemic,” while Michael Izza, chief executive of the ICAEW, says chartered accountants have been “looking to see what can be done from firms’ own resources, then looking at what government schemes can help.”

Advisory Fuel Rates from 1 June 2021

The Government are implementing new rates that apply to employees using a company car.

These rates will apply from 1 June 2021 . You will be able to use the previous rates for up to 1 month from the date the new rates being introduced.

For more information please visit:

Hybrid cars are treated as either petrol or diesel cars for this purpose.

Advisory Electricity Rate

The Advisory Electricity Rate for fully electric cars is 4 pence per mile.

Electricity is not a fuel for car fuel benefit purposes.

Government Loans & Grants For Business

The Business Interruption Loan Scheme:
This is a government backed loan of up to £5m and the Government will pay the interest for the first 12 months of the loan. the Government will guarantee 80% of the loan.
The scheme is open to any business with a turnover of less than £45M, excluding banks, insurers and reinsurers (not brokers) , public funded bodies including state aided schools.
The only criteria is that the business must have been viable but for the pandemic and be able to show an adverse impact from the virus.

Coronavirus Future Fund

Bounce Back Loan
Allows small and medium sized businesses to borrow between £2,000 and 25% of their turnover up to maximum of £50,000. Similar eligibility as the Business Interruption Loan Scheme above. the Government guarantees 100% of the loan, there are no fees or interest for 12 months and the rate after that is 2.5%pa.

The Business Rates holiday for 2020/21 is extended to ALL hospitality and retail businesses irrespective of the rateable value of their premises.

The grant announced last week and available to all businesses eligible for Small Business Rates Relief is increased form £3,000 to £10,000.

Further grants to smaller businesses in the hospitality retail or leisure sectors in smaller premises with a rateable value between £15,000 – £51,000.

The Government has also confirmed that its advice to avoid pubs, clubs theatres etc is sufficient to claim for business interruption from your insurance company, provided of course you have that level of cover.  

Planning consents will be relaxed to allow pubs and restaurants to provide take away food for people undergoing self isolation.

In addition to the above and for other business sectors not covered by the grants and rates holiday HMRC should be amenable to giving your  business a time to pay arrangement or cancelling penalties and interest where you will have difficulties paying immediately. You will have o have submitted the relevant tax or VAT returns and they usually want to encompass all taxes in one payment by direct debit. Contact them direct on 0800 0159 559.

Other Announcements

The Off Payroll rules due to kick in next month have also been delayed until April 2021. This moved the requirement to determine if a contractor operating via a personal service company was actually a disguised employee and to operate PAYE to the engaging entity.

Our support in the wake of COVID-19

We are in unprecedented times with the COVID-19 virus and during times of uncertainty our biggest opportunity is to come together to learn more, support one another and adapt to change, even if we cannot always see the way forward.

Our responsibility is to ensure we put people first in all the decisions we make.

KM will remain open although we are encouraging staff to work from home where possible. Your usual contacts will remain available by e mail and reception will be staffed as usual.

We are aware of the challenges faced by our clients following decisions being made by Government to limit the spread of the virus, especially cash flow. Please do contact us if you are in need of assistance in sourcing additional funds, arranging time to pay with HMRC etc.

Our commitment to you during this situation remains as strong as ever. Thank you for your business and stay safe.

How to avoid costly HMRC Investigation fees…..

HMRC raises £16 for every £1 it spends on staff carrying out investigations into the #tax affairs of individuals and small businesses. 

Figures show HMRC collected £4.9bn in extra tax from investigations into individuals and small businesses in 2018-19, but only had to spend £309m on staff to achieve that.

This extra tax included £1.2bn from investigations into underpaid income tax.

Sign up to our #TaxInvestigation scheme to be protected from #HMRC

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