DT writes: One of my employees has a grievance against another member of staff, and I want to stop the problem escalating. Is there a formal process I should follow to rectify this situation?
Grievances should be dealt with under a company’s grievance procedure, which should lay out the rights of your employees. All employees should be aware of this procedure and should have access to it, writes Peter Done, managing director of Peninsula.
When a grievance is received, your first action should be to discuss it with the employee. This will give you the opportunity to ask questions and clarify the details of the complaint. You should allow the employee to be accompanied at this formal meeting.
You should then conduct an investigation, which could include holding a meeting with the member of staff being complained about and any witnesses present at the time of the incident. During the meetings you should make written minutes.
Depending on the nature of the grievance, it may be more appropriate to implement a personal harassment procedure, which covers bullying and harassment.
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This may involve considering whether the two employees should be separated. It could mean moving one of them to a different area or floor of the office, or even to another office. You should not automatically move the employee who raised the grievance because they may feel it is punishment for doing so, and the other employee should not feel that they are being punished before any investigation or formal decision, so discussion with both is vital.
Once you have investigated the matter, you should make a judgment on whether the complaint is substantiated and convey this outcome to the employee.
Attempting to repair the relationship between the two employees outside of the grievance procedure should also be considered, and this may be achieved with help from a workplace mediator who can assist with the personal and emotional aspects.
VAT: pros and cons of early registration
JN writes: My company has been trading for some time and is approaching the point when I need to register for VAT. Is there any advantage in registering early and can I backdate it to reclaim VAT I have already paid?
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You can register voluntarily for VAT and the main advantage of this is that you can then recover VAT on expenditure, writes Jon Dawson, partner at Kingston Smith LLP.
Ordinarily, a business must register for VAT if, at the end of any month, its taxable supplies in the last year exceed the registration threshold, which is currently £82,000. VAT registration is required earlier for businesses that expect to exceed the threshold entirely within 30 days.
The main disadvantage of registering early is that your sales are subject to VAT. If your customers are mostly VAT registered, it shouldn’t matter to them. Unfortunately, customers who cannot recover the VAT will find that their invoices increase by 20% when you add on VAT. You may decide that commercially you have to absorb some of the increase to remain competitive, but this will erode your profit margin.
You are permitted to reclaim VAT paid on services your business has received up to six months before the registration date. If you buy goods for use in your business, you can reclaim VAT paid on them up to four years prior to registration; however, you must still have the goods at the registration date. If you choose to backdate the registration to claim back more VAT, you will need to account for VAT on any sales from the registration date.
HM Revenue & Customs often looks carefully at initial VAT claims where there is a repayment and it is not uncommon for it to inquire into the first return. You should always make sure you have supporting VAT invoices, correctly addressed to the company, and that all expenses are business related.