Question : I am a small employer and one of my employees has been off sick for months with anxiety and depression. How best can I support him when he returns next month?
Sarah Dunne, Higher Occupational Psychologist at the Department for Employment and Learning’s Occupational Psychology Services replies:
Mental ill health affects a significant number of people in Northern Ireland, many of whom are in paid employment. It can be difficult as an employer to know how best to deal with the situation. However, free expert advice is available locally, through the Department for Employment and Learning’s Occupational Psychology Service (OPS).
OPS and Disablement Advisory Service (DAS) are at hand to work in partnership with the employer and employee to tailor a support solution to meet the needs of both parties.
To support an employee with mental ill health returning to work, occupational psychologists from OPS gather information, carry out job analyses, and assess the employee’s workplace capability. A range of solutions are drawn up and presented to the employer. Recommended adjustments could include: phased return; disability awareness training; target revision and mentoring. Specialist programmes can also be used to support the returning employee.
OPS and DAS provide continuity of service delivery, assisting with the implementation and evaluation of solutions, and remaining available on an on-call basis. OPS and DAS can be contacted through your local Jobs & Benefits Office or JobCentre.
Question: What do we do to protect our business partnership if one of us dies?
Steve Laird, Principal at Carrington Wealth Management replies:
There are hundreds, if not thousands, of business partnerships in Northern Ireland.
Usually the larger organisations will be set up on well defined terms set out in a formal partnership agreement, but many of the smaller ones simply don't have any legal agreement in place at all.
So what happens if a partner dies? Unless stated in a partnership agreement that it must continue, a partnership dissolves on the death of a partner, so if there are only two or three partners, this can be awkward as the deceased’s ‘share’ of the partnership would pass to his or her beneficiary. They in turn may have no interest or experience in the business and yet want their financial rewards, whether that means buying them out or them becoming a sleeping partner.
The same applies if a partner becomes too ill to carry on and either wants their money out or simply becomes a passenger.
Partnership Protection Insurance is a way of making sure that the surviving partner(s) will have the option to carry on with the business should they wish for funds to be available to compensate either the estate of the deceased partner or the partner him or herself, should he or she survive a serious illness.
It is usual to set up an option agreement at the same time as taking out the insurance. It is very important to ensure that these are set up correctly. An Independent Financial Planner will aim to ensure that your business is well protected and can continue in the most difficult of circumstances. They will also explain the taxation issues that need considering as well as the use of any suitable trusts.
Question: What effect will changes to the VAT treatment of client monies have on professional practices?
Alan Curry, director of tax at ASM Horwath answers:
Historically, HM Revenue and Customs (HMRC) treated the interest on client monies retained by professional practices as being “incidental” for VAT purposes. But their position has changed. Where monies are held, and interest earned, on a client account, input VAT previously recoverable may now be irrecoverable.
The implications of this can be serious for solicitors, estate agents, accountants and financial advisors, as it reduces both profitability and cash flow.
HRMC will now be able to examine and recover any underpaid VAT from the past four years.
But there are ways to help mitigate VAT loss. Businesses that historically did not consider interest income to be VAT exempt should consider if they are now partially exempt. The VAT loss can be mitigated by using a special method calculation. Even better, the VAT may be within the de minimis provisions. This means that input VAT is deemed to be so inconsequential that it can be ignored, and all input VAT on expenses and purchases can be reclaimed.
It is important you recognise the implications for your business and that you take the opportunity to mitigate any VAT loss arising from client account interest. Seek specialist VAT advice in advance or to assist with HMRC enquiries.