May need to consider redundancies?

Re: May need to consider redundancies?

Neal Palk — Fri, 10 Feb 2012 13:20:08 GMT

The OP on this one has understandably chosen to remain anonymous - but if s/he is still reading the thread I invite him/her to get in touch as I may be able to help with the predicament without incurring more cost which is seemingly par tof the difficulty. I'll not go into detail as I only know what's been posted, but the offer is there to get in touch - nothing to lose really?

Re: May need to consider redundancies?

Gurth Scriven — Thu, 09 Feb 2012 20:40:12 GMT

You have to get a grip PDQ before your health is affected by the Mill Stone you have tied around your own neck.

1) a radical cull of staff, be honest with yourself as to who are more of a luxury than a necessity.

2) The locum has to go, even if you have to make more use of the OOH facility. Perhaps you could find someone locally to give you a regular day every week, significantly less expensive than a locum, especially if you can avoid bringing an agency into the equation as well.

3) Take a long look at your life, would you miss your long term relationship with HMRC, VAT & your Accountant? - I don't. - If you could realise the capital and goodwill in your business and swap it all for a salary and regular time off with the family you might be better off regard to both your health and your finances.

Whatever course you decide upon, good luck. But do something, you need to get things sorted sooner rather than later, before your health and/or your practice fall apart.

Re: May need to consider redundancies?

Bob Russell — Tue, 31 Jan 2012 12:45:49 GMT

Always, always, always get your paperwork in on time. When our practice manager was escorted off the premises we found, hidden under a mountain of rubbish a number of warning letters from the VAT people. She had decided that as long as we paid on time they would not worry about when the paperwork arrived! I suppose this is because they will be charging interest on outstanding amounts.

We had a whopping great penalty to pay!

I have tried to keep HMRC happy over the years. Our last VAT inspection lasted not much more than an hour. We carry insurance in case HMRC come in mob handed!

Re: May need to consider redundancies?

Gerry Henry — Tue, 31 Jan 2012 11:25:12 GMT

[quote user="Bob Russell"]

[quote user="Gerry Henry"]

Don't, repeat Don't phone HMRC to ask for time. All it does is flag you up and they will pester you mercilessly, do you really think Sharon Jobsworth gives a tuppeny toot about you or your difficulties. Pay a third in January/February, a third in March and a third in April/May; each time they receive a payment they go quiet for a while. Play the system, everybody else does; this isn't tax evasion, just tax deferment.

[/quote]

Disagree strongly here. If your profit is reasonable they are not going to look for problems. There are plenty at HMRC that realise the difficulties of cash flow. Despite their attitude they are not there to make life harder for you. I know the attitude has hardened in recent years but when I applied for time to pay they volunteered a much more liberal schedule than I was requesting.

If you fail to notify them you stand to have penalties and surcharges.

Let them know you are going to pay X this month Y next and Z the following month. Make sure you stick to these payments. I have never seen any evidence that you will be flagged up. The pestering letters (very unpleasant and bullying) are computer generated when you fail to pay. They will stop if you use the system rather than ignore it!

If in doubt get the opinion of your accountant as to whether it is better to take time to pay or to request it!

[/quote]

You have to be careful about what you defer; pay the VAT on time, if you can't you won't be fined for a late payment if its a first offence, if you repeat then its a percentage of the amount due. Do get the return in on time, that accrues penalties if you're late. As for the income tax element they only charge interest, not especially high at present.

Our experience of phoning for extra time is obviously very different. Personally I've never asked and have always taken a few months with no come back. A few of my writer friends however have had very different experiences; one asks for time and gets sh*t from then on; threatening calls to his home, nasty letters etc etc; one, like me pays when he can, no hassle apart from the letters which he files under W.

Re: May need to consider redundancies?

Hannah Wynne Richards — Tue, 31 Jan 2012 09:27:49 GMT

If turnover has increased, but you're still having problems-it sounds as though you're in the position I was 12/13 years ago-busy 2 veterinarian practice-and no money left for me.I increased fees dramatically which lost 50% of customers ,which in turn meant both the gross profits per patient were dramatically increased,and I was able to do all the veterinary work, so could make both veterinary surgeon and some support staff redundant-the VS had not been there long enough to qualify for redundancy-there was a very dramatic increase in the bottom line

Wynne

Re: May need to consider redundancies?

Bob Russell — Tue, 31 Jan 2012 09:16:46 GMT

[quote user="Gerry Henry"]

[/quote]

If you fail to notify them you stand to have penalties and surcharges.

If in doubt get the opinion of your accountant as to whether it is better to take time to pay or to request it!

Re: May need to consider redundancies?

Neal Palk — Mon, 30 Jan 2012 18:59:52 GMT

@Mark and Bob - my post was missing a word ('be' now added) in that 2 x 0.5 (or other multiple) is indeed the way forward. Typo on my part.

Re: May need to consider redundancies?

Gerry Henry — Mon, 30 Jan 2012 17:51:47 GMT

Re: May need to consider redundancies?

Mark Holmes — Mon, 30 Jan 2012 17:34:50 GMT

[quote user="Bob Russell"]

I don't agree with 1FTE rather than 2 x 0.5. Two part-time staff are more flexible than 1 full-timer. If you are busy you can get both to man the pumps (with their agreement!) and two can work a 8.30-6.00 by sharing the day. A full timer will need breaks and you will fall foul of the working time directives with these shifts! Two part-timers will pay less tax and NI.

[/quote]

Two part timers can also provide respective holiday cover.

Re: May need to consider redundancies?

Bob Russell — Mon, 30 Jan 2012 17:32:26 GMT

The tax people at the end of the phone are not paid to be nice. They are probably told not to agree to time to pay without a fight but I agree there is no point in them killing the goose that lays the golden eggs.

Ask them if they would rather wait a bit for the money (and charge interest!) or pay unemployment benefit for your staff! That should shut them up.

It is likely to be worth paying redundancy pay to make longer term savings in the wage bill.

Re: May need to consider redundancies?

Neal Palk — Mon, 30 Jan 2012 16:31:10 GMT

Your post reads like you indeed have too much cost in your business (if turnover has increased). Locums (there is no formal recognition of such in law) are typically paid a premium for (amongst other things) a lack of employment longevity. You say you engaged him recently so - depending on the terms of engagement - it is unlikely you need to give more than a week's notice to conclude the arrangement. Your inference he may 'walk' if you suggest the end is nigh may be a way forward also and the best solution for you both.

If you are right about the necessary future structure (you + 1 FTE) I'd suggest three things to consider:

1. Legally you must consider and give '1st refusal' to existing employees. This need not be a negative!

2. The '1 FTE' looks more approrpriate to be 2 x 0.5 (or other combination). Paying VNA rates for reception/admin isn't good business and the role may be unattractive to a VNA anyway

3. If you make redundancies - even at statutory minimum - it will cost you money you may not have so plan carefully.

Re: May need to consider redundancies?

Gerry Henry — Sat, 28 Jan 2012 21:34:52 GMT

Been there, done that. They're not stupid, the inspectors I mean, they don't want to kill thegolden geese, as long as the money comes in they're prepared to be flexible.

Re: May need to consider redundancies?

james herriot lied — Sat, 28 Jan 2012 16:10:45 GMT

You may need to bar the doors of the practice on Monday morning, Gerry. And a pair of cast iron underpants to prevent the 'nice' auditors from crawling up your @rse might be handy, too.

Re: May need to consider redundancies?

Gerry Henry — Sat, 28 Jan 2012 14:06:58 GMT

Look everyone, stop letting HMRC push you around. Can't pay the VAT, OK, 'accidentally' forget a month, complete quarterly return online and pay the reduced amount, then, when cash flow is healthier, adjust the short payment and pay up, all's well, they probably won't even notice. My experience is that the inspectors are far nicer than the call centre drones.

Re the begging letters from HMRC concerning tax, ignore them, pay an amount each month when you can, the threats don't materialise.

Re: May need to consider redundancies?

plantagenet — Sat, 28 Jan 2012 08:58:49 GMT

[quote user="An On MRCVS"]Regarding VAT, HMRC allowed us time to pay in the past but when requested again I was made to feel like a naughty school child[/quote]

I asked for a couple of extra weeks to pay my VAT when a busy qtr was followed by a quiet one and I don't have the cashflow to easily put it aside. The man at the other end of the phone line (for people with payment difficulties) was SO rude, offensive and unhelpful, that I have complained to my MP. Of course it's getting nowhere because the call was not recorded and I was so angry at the time, I didn't get his name. I pointed out to my MP that, like many other small businesses, I am providing employment, training and a local service in these hard times and the least I expect is courtesy.

I hope things work out for you. I am struggling with a problem with a pregnant nurse at the moment and, even if I can get the right advice to stop it costing a fortune, the time wasted getting it right, is another drain on me personally.

Re: May need to consider redundancies?

An On MRCVS — Sat, 28 Jan 2012 01:21:28 GMT

Just wanted to thank everyone for their thoughts ( and virtual support) It has been very much appreciated. Just to say that the cashflow comment is spot on. I do not run a traditional practice but we are busy, not as profitable as a surgical facility but we do OK but cashflow is the killer.Regarding VAT, HMRC allowed us time to pay in the past but when requested again I was made to feel like a naughty school child & told that in effect the offer had been for a limited period! Credit cards are the way to go apparently. I had worked 24/7 for nearly 3 years but managed to farm out the OOH 1 year ago. RCVS guidelines regarding this nearly killed the practice then as I couldn't afford to pay anyone to do it (we have no OOH provider locally anyway) and as a single parent I couldn't continue to offer it. Fortunately all resolved. I am training in a veterinary speciality that should see me qualified in a further 3 years and would like the practice to survive to see this implemented. Think I can see light at the end of the tunnel, not as bleak as last week so thank you everybody and especially for the offers of further advice. Good job everyone

Re: May need to consider redundancies?

Martin Atkinson — Tue, 24 Jan 2012 11:26:33 GMT

[quote user="Bob Russell"]

Redundancies are a sad fact of life and small practices are more sensitive to the ups and downs more than larger practices (I am more than willing to be corrected by larger practice owners!)

[/quote]

I'd have said that medium sized practices are most vulnerable: i.e. those with 3-4 vets and 2-3 branch surgeries. It is easier for me to batten down the hatches being sole charge, one centre, I could do it by myself if things got that bad. Large practices with several self-sufficient branches have probably got the resources to weather the storm unless they're living off a large overdraft. But the bigger they are the harder they fall.

Re: May need to consider redundancies?

Bob Russell — Tue, 24 Jan 2012 11:06:47 GMT

There are two different problems in practice:

1) Profit - this is often not the problem but leads to tax bills!

2) Cash flow - this is often the killer for practices. Obviously we do not know the details of the OP's practice but if the business model is sound profit will not be the problem but cash flow is. For a number of years we made a profit but having to pay the VAT based on our busiest quarter, paying many bills (VDS, insurance etc etc) in January linked to a short working month in December and high costs of Christmas put our cash flow under intense pressure. Even now I worry about the balance in our bank account at the end of January. It can be dire whereas it is healthy in the summer.

Redundancies are a sad fact of life and small practices are more sensitive to the ups and downs more than larger practices (I am more than willing to be corrected by larger practice owners!)

It is not difficult to lose staff legally if the pressures on the practice are great. You just have to be seen to be fair about the process.

Re: May need to consider redundancies?

Martin Atkinson — Tue, 24 Jan 2012 10:30:32 GMT

The OP hasn't said why she has had to have time off and needs to employ a locum but clearly this is the biggest drain on the practice. She also says that her most important asset is her receptionist/practice manager but unless this person is amazingly magnanimous I would say he/she is the least needed. I would like to think that the OP is not so incapacitated that she is unable to do any work at all so maybe she could do the practice management role herself as much of this could be done from home. I am a sole charge practice and the current financial circumstances have affected me so I've cut staff by natural wastage, I certainly couldn't afford a near full time locum and unless totally incapacitated I would crawl into work and prop myself up - I have effectively done that with a broken leg. I now have just 2 full time nurse/receptionists who work shifts on an alternative short and long day. If someone is sick or on holiday the other covers and is happy to earn the overtime. They're both school leavers so I don't have to pay them a fortune and trained by me to my standards. I do all my own practice management. This model works for me but how you achieve these staffing levels is the problem. So long as you stick by employment legislation then it should be easy to remove the dead wood after all you've said that you feel they are unable to fill the proposed roles, you are allowed to get rid of staff if they are unable to adapt to new roles which have been created due a genuine change of business model. Redundancy pay even if applicable will be small beer compared to the savings in the longer term. As others have said, you look after number one first, staff would shaft you if it suited them. If none of this is possible then a big reappraisal as to whether continuing as self employed is the best way is needed.

Re: May need to consider redundancies?

Bob Russell — Tue, 24 Jan 2012 09:31:34 GMT

Time to pay telephone number 0845 3021435 (HMRC) - don't be bullied by them! There are comments in the papers about attempts to reduce or withdraw the scheme.

I am not happy writing to the tax man (always recorded delivery to prove it arrived!) because post does not seem to be treated with priority. Do not be surprised if letters continue despite arranging time to pay. If you owe small amounts (by their standards) the letters can be very aggressive and frightening. Apparently this gets people to pay, I found it insulting and was receiving letters threatening bailiffs before they linked the time to pay with my details.

This may or may not be on purpose!

I accept I am only harping on about tax liabilities but up to a few years this was a very tense time of year!

My experiences were several years ago but it put me under a lot of pressure but getting that bit of a break allowed us to look at the bigger picture!

We changed accountants and it turned out we were paying far more tax than we should have done!!!

Re: May need to consider redundancies?

Gillian Mostyn — Mon, 23 Jan 2012 21:01:08 GMT

I get the impression this isn't a 'typical' veterinary practice so not sure if the business model is a good one. However, as with any business, only the owner can decide what is affordable and if it is not working then you need to make strict cuts - get good advice about what is legal but try not to worry about your staff - it isn't deliberate afterall!

Re: May need to consider redundancies?

plantagenet — Mon, 23 Jan 2012 20:17:58 GMT

Best wishes and sympathy. I know how tough it is to run a a practice on your own. Put yourself first - no one else will. Easier said than done, I know. A good locum should be sympathetic and will be able to get work somewhere else.

Re: May need to consider redundancies?

Gerry Henry — Sun, 22 Jan 2012 13:47:50 GMT

I've opened and built up two practices from scratch and it ain't easy. This is year eight of practice two and i'll be taking my first proper holiday in June - that's seven years without a real break. To be honest it was only in the last two years i could afford a locum for Saturday mornings, our OOH provider doing the rest of the weekend. I never fail to be surprised by start up principals who don't understand or fail to grasp that for the first few years its 24/7/52, then 12/7/52; if you're lucky and have a local OOH it can be - oh, bliss - 12/5/52; only when the practice is established (a variable) can you afford the luxury of time off. If you enjoy what you do (and i do), then its no hardship providing you get the weekend with your family and the odd bank holiday, if its just one big stress-fest, it must be hellish. You say you're a non-surgical practice which, I suspect, is the nub - or close to the nub - of your problem, how the hell do you make any money at all? Without surgical cases I'd be in the poor house, along with the rest of the profession I suspect. Also if you're non surgical, why do you need four staff, surely there can't be that much work. My advice would be get on some remedial surgical CPD or if that's not an option, scrub in with a friendly practice and polish up those 'day one competences' and start doing your own, simpler stuff, moving forward as you confidence and skill improves, or, if surgery really isn't your bag, do a medicine cert and consider referral work; one way or another you've got to get those fees in. Re paying tax, take your time and don't let them fluster you. Avoid penalties by submitting VAT, tax returns and balancing payments on time but pay the 'on account' stuff over a few (3 or 4) months and just chuck the HMRC begging letters in the bin. Are you in a buying group? big savings on the drug bill if you are.

So, the plan going forward; 1) Reduce your staff and get used to long hours 2) Up your skills to maximise revenue (surgical income = almost pure profit) 3) Look carefully at all aspects of expenditure, cut what's not essential 4) Join a buying group.

Re: May need to consider redundancies?

Kate Richardson — Sun, 22 Jan 2012 13:02:06 GMT

[quote user="Lorna McHardy"]

[quote user="Malcolm Ness"]

There are several on vetsurgeon with experience of running a practice - don't be slow in sending a personal message for a chat - I haven't asked yet but I am sure that Bob R, Jonathan Wray (JGW), or the Mostyns for example would be happy to help, as would I.

[/quote]

I love this site.

Good luck, Anon

[/quote]

Seconded. I can't offer anything more than support, and best wishes, and really hope that you can resolve your problems. The first step is asking for help, which you have, so that in itself means to me you are most likely to overcome your difficulties.

Re: May need to consider redundancies?

Lorna McHardy — Sun, 22 Jan 2012 12:35:03 GMT

[quote user="Malcolm Ness"]

[/quote]

I love this site.

Good luck, Anon