Employee Absence Effectively

Recent research by the Confederation of British Industry (CBI) revealed that the government introduced ‘fit notes’ scheme had not delivered less instances of employee absence through unwarranted ‘sickies.’

The CBI’s Absence and Workplace Health Survey discovered that in 2010 the average employee took 6.5 days off sick, which was a slight increase of 0.1 days compared to the previous year’s figures.

Fit notes were introduced in 2010 to replace the sick note with the main change being that GPs were able to advise workers about how to return to work and report on the impact of their illness or injury.

The study found that 66 per cent of firms thought that fit notes had not encouraged their employees to return to work and 71 per cent did not believe that doctors were using them in a different way from the old sick note.

Employee absence resulted in the British economy losing 190 million working days, of which 30.4 million days were ‘sickies’, and this equated to £17 billion in lost revenue.

Katja Hall, CBI chief policy director, said that examples of unwarranted employee absence were damaging the economic recovery and employers must act to bring down levels of absence.

She said: “The gap between the best and worst has widened. The substantial costs of absence to the economy put a premium on managing longer-term absence well. There can be no room for complacency in addressing the so-called sick note culture.”

Employers must recognise that every employee will get ill occasionally but regular instances of absence must be tackled as for small businesses especially they can mean the difference between profit and loss.

Stress-related health problems are increasingly common so if an employee complains of this it is important to help them as they will feel less engaged and more likely to miss work if their employers do nothing to support them.

Increasing engagement through regular communication will enable managers to understand the professional and personal problems an employee may be experiencing, which can then be dealt with as quickly as possible.

Providing support will make an employee feel valued and this will encourage them to remain with an employers and motivate them return to work if they are forced to take time off due to illness.

5 Point Mid-Year Tax Planning Check

Here’s a checklist to help make sure you are on track for your tax planning this year.

Point #1
Do you need to add an entity or change how an entity is taxed in your tax strategy?

Entities are one of the greatest tools to reduce taxes. Knowing the right time to add an entity and knowing the right entity to add can save as much as $10,000 per year in taxes. However, the entity needs to be in place in order for the tax savings to occur.

When I create a tax strategy with a client, it’s not uncommon for an entity to be created knowing that once it reaches a certain level of income, an election will be made to change how the entity is taxed. Missing this election or not making it at the ideal time can be a very costly tax mistake.

Now is the time to look at adding an entity or changing how one of your existing entities is taxed. Waiting any longer could minimize the tax savings for this year.

Point #2
Are your entities paying you the optimal amounts to minimize your taxes in your tax strategy?

Optimizing how you take money out of your entity is another effective way to reduce your taxes. The amount that is taken and how it is taken can have a huge impact on your taxes. It can also get the unwanted attention of the government.

Now is a good time of year to check in on how your entities are paying you because if changes need to be made, there is still time left in the year to make those changes without having to do one big adjustment at the end of the year.

Point #3
Is your documentation in place?

Documentation is a great way to successfully get through an audit. It is also a great way to increase your tax deductions because proper documentation leaves less room for deductions to get missed.

Documentation is best when it is kept current. An auditor can usually tell when someone has gone back and created their documentation after-the-fact.

Documentation includes keeping proper receipts, keeping mileage logs for your business vehicle and keeping hour logs if you claim real estate professional status.

Don’t get behind with your documentation – now is the time to get caught up.

Point #4
Have you been reimbursed for expenses you’ve paid personally?

Commingling business and personal funds is never a good idea. It can jeopardize the legal and tax status of your business.

To avoid commingling of funds, it’s best to pay business expenses with business funds and personal expenses with personal funds.

There is one exception to this and that is business expenses paid by you personally. It is a common business practice for a business to have policy in place to reimburse employees or owners for certain expenses. Common examples include lunch with a client or travel for business purposes.

If you have paid for any business expenses personally and have not been reimbursed, it’s time to submit that expense report and get paid. These expenses are easy to forget about and that means the tax deduction could get missed.

And, if your business doesn’t have a policy in place to reimburse you for these expenses, it’s time to get that in place too.

Point #5
Is your bookkeeping up-to-date?

Have you noticed that each of the above is impacted by your bookkeeping?

Bookkeeping is one of the most powerful tools in a tax strategy. Without up-to-date bookkeeping, it is impossible to determine if anything in your tax strategy needs to be adjusted in order to maximize tax savings.