Question: I am selling my business but first I need to come clean to the Revenue about undeclared profits which the purchaser has uncovered. Is there going to be a UK tax amnesty and, if so, when, and how will it work?

David Hill, tax inquiries consultant with David A Hill Business and Tax Consulting in Belfast, replies:

HM Revenue & Customs (HMRC) does not like the word “amnesty” and refuses to use it.

However, HMRC ran an Offshore Disclosure Facility in 2007 which granted effective immunity from prosecution — and a guarantee of no publicity — to tax offenders who disclosed full details of undeclared offshore investments and income.

Most people were unaware at the time that HMRC had a parallel programme through which it was agreeing similar settlement terms with those who had tax problems unrelated to offshore funds.

Full settlement under the 2007 schemes required payment not only of the tax due (for up to 20 years), but also interest and a penalty of 10% of the tax.

A second disclosure facility is expected to be announced later this year.

Early signs are that the penalty sought will be higher than 10% but will still be lower for most people than outside the scheme. A shadow facility for non-offshore cases is likely.

In your circumstances you may be tempted to wait until then.

However, if you fail to approach HMRC through your tax advisor or accountant, and the Inspector happens to find out about you first, a large penalty, and even prosecution, may well be the painful result.

Question: What alternatives are there to compulsory redundancy in the present downturn?

Gareth Walls, senior associate with A&L Goodbody solicitors in Belfast, replies:

All employers are required to recognise compulsory redundancy as the last possible course of action.

Employers are bound to seek suitable alternatives to compulsory redundancy, and must engage in a genuine process under statute to reduce or even dissipate the need for compulsory redundancy.

Alternatives can be considered at boardroom level or may be proposed from the shopfloor.

However, all must be considered on their merits if an employer is to avoid tribunal action.

These ‘suitable alternatives’ may include voluntary redundancy, part-time working or job sharing, unpaid leave of absence, reduction in bonus or overtime, removal of fringe benefits (even on a permanent basis) or a reduction in base salary.

These may seem drastic and will, of course, require changes to contractual terms and thereby employee co-operation, these are all already commonplace in all industrial sectors in Northern Ireland.

Such means are better for workforce morale than divisive compulsory redundancies, partly due to the dire economic reality and party due to the desire to retain some form of gainful employment.

A final word of caution, however, for employers. All suitable alternatives must be considered before compulsory redundancies are contemplated.

A failure to consult effectively or at all, will lead to an automatically unfair process and almost certain tribunal costs on top of the statutory and contractual redundancy payments budgeted for in a ‘standard’ redundancy situation.

Question: One of our full-time employees is the primary carer for her elderly mother and has asked for flexible working hours as her mother’s health has deteriorated. In the current economic climate we cannot afford to keep her as a |part-time employee. Where do we stand?

Lisa Bryson, associate in employment law with Carson McDowell solicitors in Belfast, replies:

If the request to change the hours of work has been made on an informal basis you may be able to ward this request off by explaining the impact of the economic downturn on the business to the employee.

If, however, your employee has made a formal request (in writing and stating that it is a request under the statutory right to request flexible working rules), you are required to follow a procedure.

You can justify refusing the request on one (or more) of the following reasons — the burden of additional cost; detrimental effect on the ability to meet customer demand; inability to reorganise work among existing staff; inability to recruit additional staff; detrimental effect on quality; detrimental effect on performance; insufficiency of work during the periods the employee proposes to work; or planned structural changes.

If the employee pursues a claim to a tribunal, commercial business decisions will not be challenged by the tribunal.

However, if you fail to deal with a formal request in line with the statutory requirements the tribunal may award the employee compensation of up to eight weeks’ pay.