Are you considering making redundancies? Read our tips to help you manage the situation carefully. Plus, new Companies House powers come into force and the latest tax-free childcare rules
Redundancies – what factors should be considered?
In times of economic uncertainty or because of operational challenges, you may find your business is facing tough decisions, including the possibility of redundancies. While such situations can be daunting and emotionally challenging, careful consideration and planning can help reduce the impact on both employees and the business as a whole.
In this article we discuss some key factors that a business should consider when contemplating redundancies.
1. Assess the situation
Before making any decisions, conduct a thorough assessment of your business’ financial health, operational needs and long-term viability. You will want to look at trends in your business’ revenue as well as market conditions so that you can make some accurate forecasts. It is important to make sure that you are working with the facts of your business’ situation. ‘Gut feeling’ can be affected by a distorted impression of the finances, and you may be surprised at how a situation looks more reasonable once all the figures have been identified.
2. Explore alternatives
Redundancies should be considered as a last resort. Are there alternative measures that could also achieve the needed financial or operational relief? For instance, reducing working hours, implementing temporary lay-offs, or renegotiating contracts with suppliers could minimise the need for job cuts.
3. Consult legal requirements
Familiarise yourself with the employment laws that apply to redundancies. Selection criteria, statutory notice periods, requirements for consultation and redundancy pay obligations are all areas where it is important to avoid potential legal repercussions. It may be best to get expert legal advice to make sure nothing is missed.
4. Communicate transparently
Open and honest communication with employees is crucial throughout the redundancy process. Clearly explain the reasons behind the decision, the criteria for selection, and the support available to affected employees. By providing regular updates and opportunities for feedback you can help alleviate the anxiety and uncertainty your staff will be feeling.
5. Offer support and Assistance
Redundancy can have significant financial and emotional implications for affected employees. Do what you can to provide support services such as career counselling, job search assistance, or access to training opportunities to help them find new employment.
6. Maintain Employee Morale
Redundancies can have a ripple effect on employee morale and productivity. Take proactive measures to maintain morale and motivation among your remaining staff, such as acknowledging their contributions, fostering a supportive work environment, and providing opportunities for career development.
While navigating redundancies can be challenging, approaching the process with empathy, transparency, and diligence can help you mitigate the impact and emerge stronger in the long run.
If you want to talk about whether your business’ finances mean redundancies may be needed or want to know how much statutory redundancy pay an employee may be entitled to, please get in touch with us. We have the tools and would be happy to help you.
New Companies House powers come into force
New powers for Companies House based on the Economic Crime and Corporate Transparency Act 2023 (ECCT Act) came into force on 4 March 2024.
The new measures allow Companies House to combat the criminal acts and money laundering being carried by criminals abusing the company registration system. These abuses have been well documented in the news, with many examples of individuals and businesses receiving correspondence and demands addressed to companies that they have no knowledge of.
Annual confirmation statements affected
One of the new measures requires those setting up new companies to confirm the lawful purpose of forming a company during the incorporation process.
However, the annual confirmation statement will also now require confirmation each year that the company’s intended future activities will be lawful. Where you complete your own confirmation statement, you will see this option included now.
Where we complete the confirmation statement on your behalf, then this will be something that the directors will first need to confirm to us before we complete the return.
All companies will now need to provide a Registered Email Address when incorporating or as part of their next confirmation statement, whichever comes first.
Greater information powers
The new powers include being able to query information and request supporting evidence. Companies House will be able to make stronger checks on company names and will have greater ability to tackle and remove factually inaccurate information.
No more use of PO Boxes
Under the new measures, it will no longer be possible for a company to use a PO Box as their registered office address.
It should be noted that Companies House will be actively checking Registered Offices on an ongoing basis and failure to respond quickly to their enquiries could result in fines or suspension from the register. If you are concerned at all about communication you receive from Companies House, please contact us as soon as possible to advise you.
Sharing of data
The ECCT Act now allows Companies House the ability to share data with other government departments and law enforcement agencies, which will help them in combating criminal activity.
As a result of the additional work that the new measures involve, Companies House are increasing their fees with effect from 1 May 2024. A table showing the new fees can be found at: https://changestoukcompanylaw.campaign.gov.uk/changes-to-companies-house-fees/
The new measures are accompanied by new criminal offences and civil penalties to help with their enforcement. The ECCT Act also introduces other measures, including identity verification and accounts reform, but these will not be introduced until a later date.
If you need help with a company incorporation or any company secretarial tasks, please do not hesitate to contact us. We will be very happy to help you!
Are you or your employees making good use of Tax-Free Childcare?
Tax-Free Childcare is available to working families to help them save on their childcare costs. However, many may not be making use of this provision and with the Easter break soon upon us, HM Revenue & Customs (HMRC) is encouraging families who have not yet signed up to consider doing so.
Tax-Free Childcare can be worth up to £2,000 annually per child, or £4,000 if the child is disabled. It can be used to help pay for approved childcare for children aged 11 and under, or 16 and under if they have a disability.
The way it works is that the parents first apply for a childcare account. Once the account is opened, the parents can deposit money that will be used to pay for childcare. Where eligible, for every £8 paid into the account, the government will pay in £2 to use to pay the childcare provider.
To be eligible for Tax-Free Childcare a family has to:
- Have a child aged 11 or under, or 16 and under if they have a disability.
- Be earning at least the National Minimum Wage for 16 hours a week, on average.
- Each earn no more than £100,000 a year.
- Not be receiving tax credits, Universal Credit or childcare.
Employed, self-employed, and directors can all apply, and HMRC set out what details parents need to provide to confirm eligibility.
From April 2024, there is also the possibility for eligible working parents to access 15 hours free childcare for 38 weeks a year that can be used flexibly with one or more providers.
This scheme will be further expanded in September 2024 and again in September 2024 so that ultimately 30 free hours of childcare could be available for working parents with children between nine months old and school age.
To apply for Tax-Free Childcare, please see: https://www.gov.uk/apply-for-tax-free-childcare
To register for childcare support, please see: https://www.childcarechoices.gov.uk/