Thinking of Buying a Business?

Things to Consider

Buying an existing business can be a great way to get started as a business owner, or to expand operations if you are already running a business successfully.

Established businesses have already done the hard work of setting up a business, so you can get up and running on day one without a lengthy formation process.

Things You’ll Need

  • Why is the business for sale? – It’s important to understand the motivation for the sale, whether strategic or whether an emergency sale. There may also be hidden reasons for the sale which your research can uncover.
  • Research – Do more than you think you need to! Market research, investigation, learning and questioning about the potential business, the locale, the industry, the customers, the suppliers, the competitors, the market and the nature of the goods or services being sold will ensure you don’t rush into a decision just because it looks like a good deal.
  • Due diligence – You’ll need to see detailed financial records, contracts, licenses, supplier agreements, lists of equipment, assets and inventory, lists of liabilities, loans and debts, and all employee records before making your decision.
  • A good business plan – That covers one year, two to three years and possibly five years as well. This will help you to look at the longer term and big picture, assess the potential of the business and give a realistic picture of what you are committing to.
  • Independent advice – from your tax agent and other business advisors such as an industry expert, business broker or lawyer. You might think a business looks like a great potential, but objective observers may pick up issues or queries that you have not.
  • Finance – Whether it’s your own funds, a business loan or short term finance options, you will need to work with your advisors and refer to the business plan to assess how much you will really need for the initial purchase, transition period, and future investment.
  • Commitment to the work – Being prepared for responsibility required to run a business. Running a business does require certain skills, as well as time, energy and money. You need to be clear about your reasons for going into business and to be sure you are up for the challenge!

When considering a business, we can help you to analyse the financial reports, activity statements, tax returns and sales and purchases records to give you an independent overview of the financial performance and potential of the business.

We can assist in understanding the financial performance and benchmarks of a business you are considering buying so that you make the best decision possible! Call us on (06) 878 8824 today.

Thrive or Just Survive in 2020

The question to ask is…..are you going to thrive or just survive 2020?

We are living in extraordinary times. Our lives as we have known them have been tipped upside down, all within a week. Who knows what tomorrow will bring? Is this uncertainty becoming our new norm? I hope not.

Thrive is a verb that could be easily replaced with prosper, flourish, blossom, bloom or even boom

Survive is also a verb that could be changed with live, last outlast, endure or live through.

They mean very different things. Let’s be clear though, in order to thrive, we must first survive.

The following steps are mostly logical, but also can seem counter-intuitive, and go against our survival instincts or human nature. Some examples what be considered normal or safe:

  • Being self-focused, predominately focused on your business and your family’s survival. Such as keeping your butchery retail shop open when it’s not defined as an essential business or panic buying your groceries.
  • Cutting all unnecessary expenses such as firing your business advisor or cancelling your Sky subscription.
  • Withdrawing into ourselves and relying mainly on our own thinking. Then communicating less and putting on a brave face with your business partner, key relationships or family and friends.

As a leader of your business and family, those around you are looking and depending on you to provide strong leadership and reassure them that we can overcome the current situation, including the fear it brings. It takes courage to step into the unknown to choose to have a positive and optimistic attitude despite the circumstances.

With that in mind, here are my recommendations for you and your business to THRIVE in 2020.

Step 1. Take Stock…. Where you and your business are at

Take some time to take several deep breaths, give yourself permission to be still unto you get some peace. Focus on one day at a time so you don’t get overwhelmed. Focus on what is going right and what you are gaining, it’s much more productive and energizing and remember you can’t control the uncontrollable so only focus on what you can control. Review the situation, your financial position and what decisions you need to made today for your business and family then act. If you need advice, reach out and ask for it.

Step 2. Develop a business continuity plan and a personal plan 

A business continuity plan pinpoints the most important parts of your business, identifies the risks to critical aspects of your business and prepares you to recover from the lockdown as quick and easy as possible. It’s how you’ll get your core parts of your business up and running again.

You could ask your Business Advisor or Accountant for help to develop your business continuity plan or you could ask them to direct you to a template to work through. I would always encourage you to involve your Business Advisor or Accountant as they can add value in the process. It’s good to surround yourself with the people who can help you make good decisions right now.

Developing a personal plan is just as important as you lead your business and family. They both need you. Developing a personal financial plan is a must which would include a review of expenses and a budget. If you are now working for home, you would have set up your home workspace with the technology required to function as normal as possible. Working from home or not you will need to review, work out and then set a new routine that works for you, your business and family.

Your routine would involve such things as a set time to start work, regular breaks, time to finish work, family time, eating time, rest and relaxation time, partner time, exercise time, bedtime and ‘me’ time. This will enable you to be more focused and productive in your day. This will take time and discipline, be intentional but not rigid or hard on yourself or your family.

This challenging time is an awesome opportunity to create some great habits that will serve you further in the future.

3. Invest in your business, yourself and others

You’ve steadied the ship, now is a time to ask the bigger questions for your business and you personally. Important questions like ‘what does success look like in 5 years?’ Or looking more short term, ‘what does success look like at the end of the next financial year?’ The key here is to ask yourself “if I knew I couldn’t fail, what would I achieve?”

Take some time to consider the possibilities and think bigger. It needs to be a stretch that requires massive focus and action to achieve it.

I encourage you to take the opportunity you have before you right now. Invest the time and money required into your business and yourself. Now is not the time to shrink back and play small. Get clarity of vision, get a strategy, grow in skills and confidence to achieve your business and personal success. Then go and achieve it.

Now that the chips are down, and as a nation our backs are against the wall, this is our time to show the very best of humanity by rallying around each other looking for the opportunities to invest in others and respond generously to the needs we see around us. Whether that would be helping a staff member financially, going over and above for a client without charging them, buying someone their groceries or simply picking up the phone and asking how someone is. Whether these gestures seem big or small to you, they make a big difference to the people receiving them. They restore people’s belief in humanity and give fresh hope to face another day. People will remember how you treated them during this time and well beyond.

Remember to value your key business and family relationships

Business and life are done with people who all have, fears, dreams, aspirations, family, strengths, weaknesses and they all have their own stuff going on.  They are not just a number or a transaction. I see so many business owners have transactional relationships with staff, suppliers, contractors, customers and even their family.

Our business and personal success depends on the quality of people we choose to surround ourselves with and the depth of relationships we have with them. 

Now is a great time to build better relationships with our key business relationships and family by spending more time connecting with them, being more vulnerable (risking and sharing your feelings and thoughts more), valuing them more by considering their feelings, their situation and involving them in your decision making process.

Summary

We are in an extraordinary time in history right now. There is a massive opportunity to take this time to set up your business and yourself to not only survive but to thrive in 2020. I challenge to you take stock, develop your plans, invest in yourself, your business and other. Be kind, caring and value your relationships.  And together we will get through this. Actually, you will thrive.

Robert Miller is a business coach who has been serving businesses and their leaders for over 15 years in the Hawke’s Bay and throughout New Zealand. He is a partner and founder of Tandem, a business consulting and coaching firm based in Napier, New Zealand.

Robert and his business partner, Steve Connell are happy to speak to you, with no obligation, and share tips and hints to help you in this season. Just give them a call and mention you are a client of Epplett & Co. Their details are:

Robert Miller, 0274 794 064, robert@tandembusiness.co.nz
Steve Connell, 021 557 055, steve@tandembusiness.co.nz

www.tandembusiness.co.nz

“We’ve had Tandem partner with us now for a number of years. As Chartered Accountants, we have found Robert and Steve to be a great resource. During that time, they delivered an excellent & very practical series of presentations for our clients and staff. We have also referred several clients to Tandem, and Tandem delivered outstanding results and value for our clients. We also use Robert and Steve to work with us in our business”

Sarah Walker, Director, Epplett & Co Accountants

Business Health Check

Do you know how much you’re spending on printing, advertising, and taking clients out to lunch? Or does it come as a shock when you do your GST returns? If your company is growing, your expenses may too, but in some cases it could be a lack of attention causing spending to creep up.

This monthly checklist will help you assess the health of your business and stay in control:

  1. Step back and do a financial overview
  2. Review account statements from suppliers
  3. Review annual sales
  4. Keep a close eye on inventory
  5. Make sure your customers remember you
  6. Spread the word about your business on social media
  7. Review your website traffic
  8. Keep on top of industry news
  9. Keep your data safe
  10. Talk to your advisors

If you would like to chat to us about the health of your business, call us today on (06) 878 8824.

To Claim or not to Claim

Planning a business trip with a personal holiday tacked on the end? Renting out the bach and unsure what expenses can be claimed? Whatever your situation, we want to make sure you’re getting the expense claim tax break you’re entitled to.

Here’s the lowdown on legal costs for trust admin, travel expenses, mixed-use assets and sponsorship.

Facing a legal bill for your business or trust? Good news.

Generally speaking, you can deduct any business-related legal expenditure carried out by your company and/or trust if total legal expenses incurred are less than $10,000 in a tax year.

Examples of deductible claims include: expenses relating to protecting trade secrets of the business, opposing the extension of a competitor’s patent, defending an allegation of an infringement of copyright, defending traffic infringements brought against company employees while on company business, and costs for appointing company directors.

Travel expenses – what can I claim?

If your business involves hitting the road, you can claim business travel as an expense. The best way to prove the business portion of your travel expenses is to keep a diary of your travels. Hang on to your itinerary, invoices and tickets. Jot down the reasons for the trip, date of the trip, and costs of any car hire, air/bus/taxi fares, accommodation, meals and incidentals, as well as the time spent on business and non-business activities.

Mixing business with pleasure? If your trip is primarily for work purposes, but contains a private or capital element, you can claim a deduction (e.g where the holiday aspect is incidental to the work element) or an apportionment (where there are two purposes for the trip, both truly separate). If the work side of things is just incidental to the holiday, no deduction can be made.

Got a bach? Claim away.

If your holiday home is being used privately and for income-earning purposes (and is also unused for 62 days or more) you can claim mixed-use expenses. There are three categories to be aware of:

  • Fully deductible expenses: You can claim 100% of any expense solely for the income-earning use of the asset. For example, costs of advertising for tenants for your bach.
  • Non-deductible expenses: You can’t claim any expenses for the private use of the asset. For example, the cost of a jetski stored in a locked garage that’s unavailable to bach renters. You also can’t claim expenses such as improvements (adding on a carport, or upgrading the bathroom).
  • Apportioned expenses: If an expense relates to both income-earning use and private use, you need to apportion it using this formula:

Apportioned expenses formula

These rules can be a little complicated, especially if a company is involved in the mix, so it may pay to come and have chat to sort out how they apply to your business specifically.

When is sponsorship fully deductible?

For sponsorship to be fully deductible, your business must be promoted and any element of private enjoyment must be incidental.

Sponsorship examples that are fully deductible:

  • Sponsoring $2,000 towards the local hockey team’s new uniforms and in return, the team agrees to display your business logo on the uniforms.
  • Sponsoring $10,000 towards the Taupo Relay for Life and in return, the organisers agree to advertise your business across all promotional materials.

If you would like to talk to us about what you can and cannot claim, call us today on (06) 878 8824.

Thinking of Buying or Selling a business?

There is no topic about which greater differences of informed opinion may exist than the value of a business or shares in a private company.  The value of a business is naturally influenced by the willingness or a vendor to sell and a purchaser to buy.  In assessing business or share valuations there are a few usual methods that are considered:

  • Capitalisation of future maintainable earnings
  • Capitalisation of future dividends
  • Discounted cash flow
  • Net assets value
  • Liquidation value
  • Tangible/fixed assets plus goodwill based on super profits
  • Market based

If you or someone you know is considering purchasing or selling a business, Epplett & Co can provide specialist valuation advice.  Contact Angela Williams for more details.

Top 10 New Years Resolutions for Businesses

The start of the year is a good time to reflect on business progress and challenges over the past year and plan improvements for the coming year.

Our top 10 resolutions will help you focus on what’s important to you and your business, whilst maintaining a sensible work-life balance and a state we like to call ‘Business Contentment’.

  1. Learn how to delegate and make it a daily habit
    We often delude ourselves that it’s easier to do something ourselves rather than teach a staff member the process. That initial time spent transferring knowledge and skill is a powerful investment in leveraging our own time.
  2. Fight procrastination
    Procrastination is referred to as the ‘thief of time’. The simplest trick in dealing with procrastination is to do the hardest tasks first.
  3. Focus on one thing at a time and stop multi-tasking
    Recent research indicates that people who constantly multi-task take longer to complete tasks and make more mistakes. Get into a real work zone. Turn off your mobile phone and your email and disconnect from all distractions and possible interruptions for blocks of time. You’ll be amazed at what you achieve.
  4. Set realistic goals
    Goals should be SMART – Specific, measurable, achievable, realistic and time bound.
  5. Make business planning a weekly event
    Set aside time each week to review, adjust and look forward. Lock these times permanently into your diary or online calendar.
  6. Promote your business regularly and consistently
    It’s amazing how businesses just expect potential customers to know that they exist. There are plenty of low cost ways to promote your business, so create a simple marketing plan.
  7. Learn something new
    What you choose to learn may be directly related to your business or completely unrelated. Depending on how you choose to learn, you may meet new and interesting people who may become customers, colleagues or friends.
  8. Drop what doesn’t work for you and move on
    If a technique, a product or a business relationship isn’t working for you, take stock. Don’t keep investing a lot of energy into trying to make the unworkable work. Move on. Something better will turn up.
  9. Give something back to your community
    Find a cause that matters to you and give what you can. Serve on a worthwhile committee, be a mentor, volunteer or simply make regular donations to the groups in your community that make the place you live a better one.
  10. Put time for you in your calendar
    Business owners lead demanding lives. All work and no play is a recipe for mental and physical disaster. If you have trouble freeing up time to do the things you enjoy, write time regularly into your schedule to ‘meet with yourself’ and stick to that commitment. If you won’t invest in yourself, who will?

New Year Computer Detox

By the end of the year most computers are feeling the effects of over-indulging. Perhaps not on Christmas wine and chocolate but as the result of viruses, document hoarding and other accumulative hangovers. Detox your computer to get it working faster, safer and more efficiently.

  • Clean it. Literally. You’ll be amazed what appears when you tip that keyboard upside down (only use anti-static wipes or a soft brush. NOT water!)
  • Remove clutter, delete unwanted documents off the desktop and tidy up your folder structure
  • Remove any programs that are no longer required
  • Empty your recycle bin!
  • Check that all necessary updates have been installed
  • Update your security passwords!
  • Double check your antivirus protection is up to date
  • Make sure your firewall is active
  • Perform a virus scan – check out Spybot Search & Destroy
  • Perform a disk cleanup and disk defragmentation
    (set this to run overnight as it may take several hours)
  • Perform routine backups of all files and settings
  • Archive files offsite

Computer systems vary. If you use an external IT provider to manage your computer requirements then liaise with them as to what they have planned and what you can carry out yourself. And remember… your computer needs a rest too – make sure to shut down and turn off before you leave the office!

Tax Pooling – A way to sort Christmas Cashflow Issues

The period after Christmas can be tough for many small and medium sized businesses.

According to more than half the respondents to a poll conducted by the Employers and Manufacturers Association, January to March is when they tend to experience cashflow constraints.
It’s hardly surprising, really. The period after Christmas is traditionally slow business-wise. Consumers are either enjoying their holidays or getting their finances in order following their festive season spending. Earnings will be down if businesses shut during the break. Others may also feel the pinch if they paid staff bonuses prior to the holiday season.

It is, therefore, understandable how having to make a provisional tax payment on 15 January might be a bit problematic for some.

Still, it does not change the fact that Inland Revenue (IRD) expects this payment to be made on time and will charge taxpayers late payment penalties of up to 20 per cent per annum and use of money interest (UOMI) of 8.27% per cent if the tax is not received on the due date.

However, those who wish to free up cash at a time when they need it most have an option.

Tax pooling is IRD approved and can be used to defer provisional tax payments to a time that suits them – without incurring late payment penalties and UOMI.

This method is cheaper than using many other traditional forms of finance – rates at Tax Management NZ (TMNZ) start from below six per cent – and does not affect existing lines of credit.

No credit check or security is required.

The full amount of finance does not need to be paid back if less tax is owed than first thought. The finance arrangement can be easily extended as well.

Contact our office if you want to discuss how to finance your provisional tax payment.

Safeguard your business

Being able to trust your team and advisors is gold standard. Keep it that way and don’t make it easy for someone to abuse your trust. Think about these tips to safeguard your business and keep those trusted relationships strong.

Housekeeping

Good systems make it easy to understand and hard to hide things. If you have a system, make sure it’s documented. They don’t have to be complicated. For instance, when you refund a customer, make sure it’s signed off by a manager or yourself and recorded somewhere central. Checklists can make a system easier for staff to understand and work with too.

Have systems in place to routinely look at where your money’s going or that require you to sign off on key transactions.

Monitoring

Do you have regular reporting? Things to look for are unusual customer refunds or credits, a spike in new suppliers or payments to existing ones. Do your sales look right? Is there a dip in cash sales?

Know what benchmarks other businesses in your industry are hitting. Compare your profit to overhead ratios with theirs and question inconsistencies.

Buddy systems

Red flag any of your systems where only one signatory is required or only one person oversights income and expenses. Make it part of the monthly routine to run the bank statements by more than one pair of eyes. Consider whether training up ‘buddies’ to share key financial responsibilities might make it harder to siphon off funds unseen.

Buddy systems can strengthen your succession plans as well as taking the pressure off when a signatory takes holidays. Ironically, it seems that people engaging in suspect activity tend not to take holidays for fear of being found out as they know someone else is performing their duties.

Background checks

Reference checks are a truism of recruitment but it’s important to take them seriously. If you’re interviewing for a role with access to sensitive financial data or business assets, consider whether background checks are advisable, e.g. criminal record checks or confirmation of qualifications. Make sure background checks fall within legal requirements or you can fall foul of the Privacy Commissioner and/or the Employment Relations Authority. There are specialists who can provide this service.

Audit

While audit is a significant additional business expense and we don’t suggest it lightly, periodic independent financial reviews or spot checks might be worth considering, if only to let it be widely known that this is one of your resources.

We can help you with risk assessment for your business and help you strengthen your systems if needed.

Changes to land sales could affect you

Are you selling residential land?

From 1 July 2016, a new withholding tax – residential land withholding tax (RLWT) – may need to be deducted from a property sale/disposal where the property being sold/disposed of is in New Zealand and meets the definition of ‘residential land’, and the vendor

  • acquired the property on or after 1 October 2015, and
  • has owned it for less than two years before selling or disposing of the property, and
  • is an offshore RLWT person

Obviously, this affects non-residents. Less obviously, an ‘offshore RLWT person’ includes New Zealand resident companies who have shareholdings of 25% or greater held by foreign persons, and trusts where more than 25% of the trustees are foreign persons. Just because your business is a New Zealand company, it doesn’t mean that you will not be caught by these new rules. It is possible for certificates of exemption to be applied for affected taxpayers. Contact us if you think this may affect you.

New requirements for Companies

From 1 May 2015 new registration requirements come into force for applications to incorporate a New Zealand Limited Liability company. All New Zealand incorporated companies must have at least one director who lives in New Zealand or who lives in Australia and is a director of an Australian incorporated company. Existing companies on the companies register will have 180 days to comply with these New Zealand ‘resident director’ requirements. In addition, all directors must provide their place and date of birth and all companies must supply their ultimate holding company details (if applicable).

Contact us if you think you may be affected.

Rates Rebates – Low income earners

The Rates Rebate Scheme was established in 1973 to provide a subsidy to low-income homeowners on the cost of the rates. The 2014/2015 rating year rebate scheme is now open for applications. From 1 July 2014 the maximum rebate increased from $595 to $605 and the income threshold increased from $23,870 to $24,250.

There is an additional income allowance for dependants at $500 per dependant. Although a ratepayer’s income might exceed the income threshold a rates rebate could still be available, depending on the rates amount per annum and the number of dependants.

If you know someone who may be entitled to the rates rebate – refer them to their local Council website where they will find information on the rates rebate and the application process. More information including eligibility calculators is avaialbe through the Department of Internal Affairs website.

Changes to IRD payments

IRD has just announced changes to how they will accept payments.

From 1 October 2014, cheques posted by mail, will need to arrive on or before the due date at IRD, posting on the due date will no longer be acceptable. Also you will no longer be able to pay by cheque at Westpac (EFTPOS and cash are still ok). For more information regarding payments visit the IRD website.

National Average Market Values Specified Livestock

The National Average Market Values (NAMV) of Specified Livestock Determination 2014 has been released by IRD.
If you have elected to use the herd scheme, these are the allowed values for the 2013/2014 year.

Here is the full listing of values.

We have also compiled an historical chart of Sheep and Beef values that may be useful.

eXPired technology

Taking your business online? Look at whether your current setup will let you keep up with the change.For instance, if you’re still running XP, be aware that Microsoft will no longer support Windows XP and Office 2003 from this year.

From April, if you use Windows XP, you won’t receive technical support for it. This means no new security updates, or non-security hotfixes. No support and no online technical content updates.

Until July 14 2015, Microsoft will continue to offer Windows XP users its malware scrubbing program (MSRT). However, your system will become more vulnerable to security risks and viruses.

Over time you’ll encounter more applications and devices are incompatible as software and hardware manufacturers upgrade their products.

You’re already onto this … right? But call us if you’d like to talk through how your computer system interacts with your accounting system or other business processes.

Year End Checklist

When it comes to the end of the financial year, you need to consider a few key factors. Here are some of the most important ones.

Consider pre-paying certain expenses
Some expenses can be prepaid in March and claimed as a tax deduction in the year to 31 March 2014, regardless of their amount. These include stationery, postage and courier charges, vehicle registration and road user charges, rates, subscriptions for papers or journals.

Other expenses have limits on the extent to which they can be claimed if prepaid. These include rent, consumables, insurance premiums, professional or trade subscriptions, travel and accommodation, advertising, periodic charges and other services. The rules surrounding prepayments are quite complex, so if you’re planning this type of expenditure, please contact us.

Don’t forget business expenses paid for privately
If you have paid for any business expenses privately during the year now is a good time to prepare a reimbursement to yourself for these.

Gather up any receipts for business expenses, for example newspaper subscriptions, entertainment, travel, employee smoko supplies. Add them up and prepare a reimbursement from your business bank account to your personal account.

If you are not sure whether an item is business related, please give us a call to check.

Similarly you may have business usage of a personal asset such as a vehicle. Give us a call to discuss your specific circumstances.

Tidy up your General Ledger – Now is a good time to check your cashbook or accounting software matches your actual bank balance. In the process, check for stale/unpresented cheques that may need to be adjusted.

Bank Certificates/Summaries – During the first few weeks of April most banks will issue Loan certificates and RWT summaries. Make sure you keep these in a safe place, or send to our office when you receive them.

Review last year’s fixed asset register
The book value of assets can be written off for tax purposes if the asset is no longer in use by the business, the business has no intention of using that asset in the future and the cost of disposing that asset is expected to be greater than the proceeds from its sale. Actually, it’s simpler than that.

Scan through your asset schedule from last year’s accounts and you’ll probably notice assets that no longer exist (the mobile phone that you dropped in the tide at Christmas time), or simply don’t work.

Maintenance and repairs – If you are planning on carrying out any significant maintenance or repairs, bring this forward to get an early tax deduction. Deciding whether expenditure on an asset is deductible as repairs or maintenance or should be capitalised is not always cut and dried, so please contact us if you aren’t sure.

Bad debts – Always review your debtors. If you have tried to recover the cost of the debt, it’s possible you may be able to write it off. If so, you may be able to claim a deduction.

Stocktake – Trading stock (excluding livestock) must be valued at the lower of cost or realisable value. It’s important therefore to perform a physical stock take at year end and actually dispose of any obsolete lines or alternatively write that stock down to its net realisable value.

Clients with an annual turnover of less than $1.3m can value their closing stock at the opening stock value, but only where closing stock can be reliably estimated to be less than $10,000.

Employee expenses – Any amounts owing to employees at year end (such as holiday pay, bonuses, long service leave, redundancy payments) can be claimed for tax purposes in the current year as long as they are paid within 63 days of balance date.

Dividends and imputation credits – Consider reviewing planned dividend payments to use any imputation credits, the RWT will be payable on these 20th April, so now is the time to make these decisions.

Donations Receipts
Don’t forget to gather up your donation receipts to bring in to us with your records.

You are able to claim back 33% of any donations that have been made to an approved donee organisation as long as your donation was at least $5.00 and you hold a donation receipt. There is a limitation in that the maximum rebate is limited to 33% of your taxable income.

Now is a good time to ask for a yearly receipt for any regular donations you have made and where you have misplaced receipts during the year. School fees as long as they go the general fund and are stated as being donations may also be claimed

Health and Safety obligations with employees working from home

It is becoming quite common for employees to decide to work from home for part of the working week. So what are your obligations as an employer when someone from your team makes this decision to do so? As an employer, do you have any obligations at all? The answer is yes, you do.

The definition of place of work includes any place where a person is to work or is working for gain or reward and this includes the worker’s own home if that is used for work. As an employer, it is your duty to take all the necessary steps to prevent harm to your employees when they are at work.

Be sure to check that your employee has adequate resources to perform his or her role and the home office is a safe environment.

This includes ensuring that the home is appropriately furnished and computer equipment is functional.

These elements are essential to maximising productivity but are also crucial when ensuring the health and safety of your team member.

Health and Safety requirements when working from home should be covered when setting out the terms of working from home. To find out if you’re complying with Health and Safety requirements, come and see us.

Cashing up annual leave

Some things you may not know

What are the rules when it comes to annual leave?

Employees can make a request to employers to cash in annual holidays, opting instead to take a lump sum payment rather than time away from work, but there are a few rules that need to be taken into consideration.

The request must come from the employee and not the employer. Although the employee is entitled to leave, the employer can decline the request at its own discretion and does not need to give a reason for its decision. However, the fact that employers owe a duty of good faith to their employees suggests that an employer’s response to a request should be reasonable.

In addition, there is a limit to the amount of leave that can be converted to payment. By law, the employee can only exchange a maximum of one week annual leave for cash payment per annum.

An employer is entitled to have a policy that it will not consider requests from employees in its business or in a particular section of its business.