“Distraint” is where a landlord or HMRC can recover debt by auctioning off a company’s assets. An official visits the company’s premises and issues the director(s) or “responsible person” with a distraint notice and records all valuable assets.
Once these have been recorded, there will be an option to agree to “walking possession”, which is where the HMRC official “walks away”, but holds possession of the goods. If the debt has not been paid after five days, HMRC can auction off the assets. If you don’t agree to a walking possession, HMRC can take away the assets immediately.
Those issuing the notice cannot force entry into the premises, but they can enter via an open window, for example. Some businesses, such as shops and restaurants, are open for customers all day every day, making it easy for an HMRC officer to gain entry. Always check who is trying to gain entry by asking for their official ID.
First, don’t panic. There is still time to turn things around. If you can pay the debt straight away, do so. This will ensure your company will stay intact and no goods will be taken. If you can’t pay the debt or you need more time to put together a repayment plan, there are other options.
A company voluntary arrangement (CVA) can let you pay off debt over three to five years, while protecting your company from aggressive creditors. It also prevents damaging your company’s reputation, because it is not advertised publically.
You can also enter administration, which again protects the company during the process. If the company is sold to directors or a third party, the business itself can still continue.
A company can owe money to HMRC for various reasons, including falling behind with VAT or PAYE payments. If you are struggling to keep up, contact HMRC as soon as possible to explain the situation and try to negotiate a time to pay (TTP) deal.
The sooner you can negotiate payments, the better chance you have of avoiding distraint proceedings.
If you are issued a distraint notice, you need to act quickly and seek advice before any further action is taken.
Blog supplied by Keith Steven of KSA Group Ltd, who has been turning around companies since 1994. He has worked for insolvency firms, turnaround funds and venture capital investors and is the author of the www.companyrescue.co.uk website.
Employers should tread with caution when managing disability-related sickness and leave. So what are the key areas to consider?
For discrimination law purposes, a person is disabled if they have a physical or mental impairment that has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities. This definition is contained in section 6(1) of the Equality Act 2010.
In some cases, it may be obvious to a manager whether the employee is disabled, in other cases it may be necessary to obtain a medical report to consider the extent of any ‘reasonable adjustments’ required by the disabled employee.
Disability leave can be used when the employee needs to be away from work to attend medical appointments or become familiar with reasonable adjustments. Disability leave can be managed in a similar way to general leave, but it should be treated as a priority.
Distinguishing between general sickness and disability-related sickness absence is good practice, because it helps to remove disadvantage experienced by people with disabilities. It is recommended that disability-related sickness is not included in the employee’s total sickness record. If the sickness is included in the employee’s total and then influences decisions relating to promotion, references or selection for redundancy, this could result in a potential disability discrimination claim under the Equality Act 2010.
A range of adjustments can be made to assist a person with disabilities in their return to work. Common adjustments include:
It is often advisable to agree that adjustments be made for an initial trial period, after which both parties should review their effectiveness and discuss any changes.
Blog provided by Bob Teasdale, business development manager for My HR Toolkit.
If you employ anyone, you must display the health and safety law poster or provide each employee with a copy of the equivalent pocket-sized card. The poster must be displayed in a place where your workers can easily read it.
The poster explains health and safety laws and employer obligations. Details of employee safety representatives or health and safety contacts can be added.
The current version of the health and safety law poster was published in 2009. You can continue to display earlier versions until 5 April 2014, as long as they are readable and contain up-to-date contact details. After this date, you must use a new version, detailed here.
The Forum of Private Business has produced this useful reminder of why Health and Safety at work matters.
For more information, the Health and Safety Executive website features a convenient series of frequently asked questions about the health and safety law poster.
As a small-business owner, every employee will be absolutely vital to your success. Any kind of absence can become a problem, especially when staff members miss work through long-term illness. In these circumstances, it is important that you handle matters in a delicate and legally compliant manner. So what should you do?
If another member of staff cannot reasonably cover the absent employee’s responsibilities, and resources allow, you may need to appoint a temporary replacement. This can prevent other staff members from becoming overstretched, while ensuring that all work is completed on time and to a high standard.
Remaining in contact with the employee on long-term sick leave can make their return to work easier. This should be tailored to their particular circumstances to ensure any contact is dealt with in a sensitive and appropriate manner. During these conversations, employees should be made aware of their sick pay position and any significant developments within the workplace that may affect them.
With the employee's consent, employers can request a report from the employee's GP to determine the seriousness of the condition and when they’re likely to be able to return to work. You can also seek their opinion on whether the condition might amount to a disability, whether any reasonable adjustments need to be made, whether a full recovery is likely and if a return to work is advisable.
By following medical advice from the GP, you can strengthen your position with regard to potential unfair dismissal and disability discrimination claims. While you shouldn't rely solely on medical advice, it can help to demonstrate that you have investigated the situation and taken into account all the circumstances before making any decision to dismiss. Proceeding to termination without medical advice can leave you open to a potentially costly employment tribunal claim.
You may need to make certain adjustments to enable an employee to return to work, which can include a phased or gradual return, modification of work activities, hours and location or the introduction of specialist equipment, to give a few examples. It is also important that you show your support with regards to any medical assistance that the staff member requires.
By proactively handling long-term illness in a confident and legally compliant manner, small-business owners can help speed up a staff member’s return to work. If a contract of employment needs to be terminated, making sure that you have followed a lawful, fair procedure can also work to reduce the risk of complaints and claims being successfully made against your business.
Blog supplied by Davis Blank Furniss, a full service legal firm with a team of solicitors specialising in employment law.
Nearly half of all marriages now end in divorce and the starting point for a division of marital assets is an equal sharing between the couple (depending on individual cases). Those assets can include your business or interest in a business.
Thinking about your marriage breaking down can be difficult, but it is important to consider what steps you can take now to protect your business interests in the event of a divorce.
This is a written agreement signed by a couple setting out what they want to happen in respect of their financial affairs if their marriage breaks down. It can specify that a business should be retained by one party to the marriage or that its value should be excluded in the event of a divorce. These agreements can be either written before (ie pre-nuptial) or after (ie post-nuptial) the marriage takes place.
Putting shares in a business into a trust can help protect them for future generations in the event of a divorce. You should seek specialist legal advice on the structure of the trust, because it will have an effect on how it is treated in the event of a divorce.
A family investment company is a private investment company designed to be similar to a discretionary trust. The advantage over a trust is that it can still offer protection and flexibility when set up during the marriage.
Your books should show that the business is run independently for the benefit of the company, rather than a party to a marriage. If you use your business bank account as a personal account, the court may assume that this will continue, meaning your partner may be entitled to a portion of the income.
You will be expected to provide full details of your business interests in the event of a divorce, which should be backed up by paperwork. Clear and organised historical records can provide a paper trail that shows the court exactly how the business has been run and the involvement both partners have had. It will be better if you present this information, rather than your spouse, where details can be misinterpreted.
Giving thought to these issues before a separation or divorce can give small-business owners the best opportunity to protect their business assets and interests.
News that many families in Britain pay more for childcare than they do for their mortgage won't come as a surprise to many working families. It has long been accepted by most women that if they want to go back to work after having children, at least for the first few years, the majority of their salary will, in all likelihood, be spent on childcare. Unfortunately the affect of this is to put off a lot of talented women from returning to work, especially if they have more than one child - at a cost to both business and the economy.
So what can businesses do to help? By recognising the value of experienced staff and offering more flexible working hours, employers can help ease the burden and financial worry that may prevent parents, usually mothers, from returning to work. Offering job-share schemes, part-time working - for example during school hours - and working from home are all options that can help parents successfully juggle work and childcare in a more cost-effective way.
The time and costs to business associated with recruiting new staff are just one of the incentives for trying to retain valued employees. Offering a more flexible way of working and having an understanding attitude towards working parents is also likely to increase your staff loyalty. And loyal employees who feel their skills and experience are being recognised and rewarded may be more willing to go the extra mile, when needed.
Read more on flexible working