All posts by Yujin Ee

Recruitment and the new grading system for GCSEs

Some of you may remember the old GCE O Level examinations which worked alongside CSE examinations. It was widely accepted that a Grade 1 in CSE was the equivalent to an O level. We then had the introduction in 1988 of GCSEs with an A to G grading system. There was also a “U” classification which meant that the examination was ungraded.

From August 2017 there is a new grading system and those of you involved in recruitment will need to be aware of and understand the changes.

The change is that GCSEs will be graded on a scale from 9 to 1, with 9 being the highest grade and 1 being the lowest. This will apply to English language, English literature and mathematics in 2017, and will be followed in 2018 by 20 other subjects including all sciences, French, German, Spanish, geography, history, religious studies, art and design, drama and PE. Most other subjects will follow in 2019 so that by 2020, all GCSEs will be graded under the new system.

So, from a recruitment position, during this three-year transition period you will come across students who will have a mixture of letters and numbers in their GCSE grades. The good news is that from 2020, all grades will be in numbers.

I am told that the top grade available under the new numbered system, which is a “9”, will be a higher level grade than the current A*. The U classification is to be retained. Ofqual has said this has been done to recognise the fact that the new style GCSEs are more challenging.

I am also advised that the new grade 4 is considered to be a standard pass and is broadly equivalent to a grade C. So if you currently look for GCSEs grades A to C this will change to grades 9 to 4.

Living in Lincolnshire we have a good number of students who move around the country (for example, students of parents who are in the RAF) and you need to be aware of some geographical issues. These GCSE changes only apply to England. Wales and Northern Ireland are not introducing the new 9 to 1 grading system; their GCSE grading systems will retain grades A* to G. Scotland is not affected as its students sit Nationals, not GCSEs, so please remember that when you advertise for GCSEs of a certain grade you need to make it clear that you will accept an equivalent level of qualification.

Head of Human Resource at Nicholsons Chartered Accountants Lincoln HR

The savings habit gets stronger with age

People who are aged 55 or over have twice as much saved for the future than the UK average, according to March 2017 research by SunLife.

The Cash Happy report found over-55s have an average savings balance of £47,237, compared to the overall UK average of £26,180. One in five people in this age group have more than £100,000 stored away for their future.

That doesn’t mean older people are always making the best decisions for building up their savings. 30% of over 55s still keep some of their savings in a jar or biscuit tin, with one in 10 having more than £500 stashed away at home.

73% state they have savings stored in an instant access account – two-thirds of these people have more than £20,000 held in this way. This is despite the fact interest rates are at record low levels. 57% of over 55s surveyed said they are saving for their long-term future, but less than a quarter have a stocks and shares ISA.

Return to work interviews

A vital part in any process as regards the management of sickness absence is the return to work interview. This is something I regularly recommend and even include this either in the contract of employment or as part of the sickness absence policy within the handbook. The return to work interview is something you require all employees to attend on returning to work, either after every period of absence or significant absence.

However, you may get a situation where the employee objects to the person who will be conducting it, what do you do in that situation?

I recommend return to work interviews as part of the sickness absence process for four reasons:-

1. The employer needs to know whether there are any issues that he needs to be aware of and if anything can be done to prevent future absence.

2. If the return to work interview is done either on all occasions, or to a fixed schedule, for example, after 10 days of absence, the culture within the organisation will be such that the interview will be anticipated and will not be seen as a threat.

3. It has been proven that return to work interviews do reduce fraudulent sickness absence on the basis that employees may be less likely to take a day off if they will have to go through this process on their return.

4. From a health & safety perspective you will fulfil your legal duties and obligations in ensuring that the employee is fit to work and whether any adjustments are required.

So, to go through the return to work process, ideally the interview should be arranged as soon as the employee returns to work, i.e. that morning as early as possible before they start work. The discussion should be held in a private place and be conducted by the employee’s line manager; this is not something to be delegated. If the line manager is not available then an alternative may be used but should be a person of a similar status in the workplace.

In the event of the employee raising objections to the person who is going to conduct the interview the first thing the employer needs to establish is the reason for the objection. All too often I come across line managers who jump to conclusions, which is the wrong approach; always establish the facts. In particular ask for the reasons for the objection (is this objection masking some other reason) as opposed to asking why they don’t want a particular person to conduct the interview (this could be because they have an issue with that person or the matter could be highly sensitive and they would prefer to discuss this with someone of the same sex).

The reason could be perfectly reasonable and if so then it has to be right to accept that but then offer an alternative person. However, in a situation where the employee refuses point blank to engage with anyone or their objection has unreasonable grounds then this is simply not acceptable. In this situation the employer should say to the employee that they are obliged to co-operate and you have a duty to protect their and others’ health and safety. If this approach is still met with an objection then I am afraid this becomes a disciplinary matter.

Head of Human Resource at Nicholsons Chartered Accountants Lincoln HR

What next after Brexit?

The UK has formally given notice it will be leaving the EU, but the path forward is filled with uncertainty.

On Thursday 30th March, nine months since the nation voted to leave the EU, Prime Minister Theresa May announced: “There can be no turning back”.

But rather than bringing an end to the episode, the reality is we are only at the beginning. Article 50 is effectively a two-year notice period to depart from the EU, with the priority being to agree the terms of Brexit.

A wide range of details will be debated between the British government and EU ministers, with the Prime Minister outlining 12 negotiating priorities her government will focus on.

Most of these discussions are expected to take place away from the spotlight, but with Brexit such a major media talking point, it’s a topic that’s unlikely to fade into the background.

Even after the terms of Brexit have been agreed and the UK has formally left, the government still has to decide which EU laws to keep and which to discard. In total there are 80,000 pages of EU agreements to renegotiate. As they affect the way UK businesses currently operate, the implications around keeping and changing these rules could be significant.

“In the current climate, developing a balanced portfolio of investments could help you to achieve a smoother investment journey”

There’s no doubt that uncertainty is going to reign for a number of years – even after Brexit takes place. Leaving the EU is going to fundamentally change the UK. But in what way, and to what extent, no one can really know.

How could this affect your investments?

On the morning after the UK vote to Leave the EU, stock markets endured sharp falls. But since that point, it has been a relatively positive period for global markets.

Last year’s decline in the value of Sterling currency hurt many UK businesses (mainly those who rely on imports as part of their operational model), but Sterling has started to recover early in 2017. Investors with global assets – or who are invested in UK businesses that rely on exporting goods – have been able to benefit from the fall in Sterling.

Clearly, the outcome of the Brexit negotiations will have an impact on markets. For example one of the major areas of contention is trade deals. Right now, UK businesses benefit from being part of the single market, where goods and services can be imported and exported free from tax. Leaving the EU could mean businesses face significant costs to continue trading with Europe. This would hurt their profits and have an impact on stock markets.

Some sectors will be largely immune to the situation, such as domestic-focused businesses like estate agents and house builders. Others, who trade overseas, could continue to benefit from the fact Sterling is still weaker than it was for the moment; but their long-term fortunes might be tied to the UK’s ongoing membership of the single market.

Don’t neglect your own financial future

The uncertainty over Brexit might be an unavoidable part of life for the next few years, but that doesn’t mean your own financial future needs to be compromised. If you have major financial goals and are unsure of your ability to accomplish them, it could help to meet a financial adviser to review your plans.

In the current climate, developing a balanced portfolio of investments could help you to achieve a smoother investment journey. That way, even if areas of the market struggle due to Brexit-related developments, for example, you might have other areas of your portfolio still generating strong returns. An adviser can help you build a strategy that suits your individual needs.

It will also help to continue regularly reviewing your investments. That way, if the economic landscape and outlook shifts significantly, you can examine any impact this might have on your plans and make any changes needed.

The value of your investment can go down as well as up and you may not get back the full amount invested. Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor. The Financial Conduct Authority does not regulate Taxation and Trust advice.

When a key employee resigns

It is never a nice situation when a key employee resigns. You have to decide whether you would like the person to stay or whether you are okay with the fact that this employee is leaving you. Whatever your decision when faced with an employee’s resignation, it is important to deal with matters quickly, and even more essential if you are considering an attempt to change their mind. Believe me, the closer it gets to their termination date, the less likely they will do a U-turn. In addition, other administrative factors will need to be considered in relation to the impending departure and keeping all of this confidential will be very difficult.

If you want to try and keep this employee I would set up a meeting with this person within 24 hours of receiving the resignation letter. You may want to do this by sending a letter or e-mail where you make the request to meet in order to discuss the reasons for leaving and any other matters that may be relevant to the decision to leave. You may wish to add in the communication that you would like to explore whether there is any possibility of persuading that person to change their mind. This will get the employee thinking about their position.

You don’t have to try to persuade an employee to stay on – so it’s entirely up to you whether this section is included. If you don’t, the meeting will simply be to discuss the employee’s reasons for leaving with a view to ensuring there are no issues or problems which you may have previously been unaware of.

At the meeting the aim is to discuss what has led to the resignation. When you have this information it will be easier for you to work out whether you can tempt the employee to stay. I tend to look at the following;

  • If they want a career change or move to another part of the country then there is not a lot you can do about it.
  • If it is about salary or benefits – is there anything you can do; pay a bonus? Enhance the benefits? Etc..
  • Are they looking for more flexibility in their work? Could they work from a different location?
  • Could some of their job duties or responsibilities be changed? Or are they feeling disenchanted at a lack of career progression? Some simple variations to their role can make an enormous difference  Is the issue that they just don’t get on with their colleagues or manager? In which case could you consider work location or changing the reporting structure?
  • When I have been involved in these types of conversations, whilst I have asked for confidentiality it rarely happens, so be careful what is said and what you are agreeing to because if confidentiality is breached you may have set precedents that you don’t wish to follow or indeed you may then have an army of employees demanding a pay rise.

If, after discussions, the decision is made to part company you should take time to remind the leaving employee of possible contractual clauses in the contract of employment; such as the duty of confidentiality and secrecy, obligations under any restrictive covenants and the return of Company property. You may also wish to consider, if your contract of employment allows for this, putting the employee on “garden leave”.

Head of Human Resource at Nicholsons Chartered Accountants Lincoln HR


Micro Entities – Disclosure versus credit

When it was announced that FRS105 Micro Entity accounts could be prepared by companies meeting the criteria everyone jumped at the chance. Minimal disclosure and information about private companies going into the public domain, what was not to like?

What nobody was made aware of was that the credit agencies were not geared up to read the necessary information from the filed accounts. They do not calculate a “net worth” position for the company based on the information filed.

Some Directors may not be concerned with this new information. Others, however, may need to rethink what they file going forward. If a company needs credit  of any form, or even a lease for a vehicle or equipment, a credit search will be undertaken and if the company has filed Micro Entity accounts it will not have a credit score. This could significantly limit your credit options.

Discussions with agencies such as Experian have indicated that they have no plans to amend their systems to pick up the data so be aware that the new regime is not all it may seem. The issue arises because the balance sheet would not show any differentiation between tangible and intangible assets.

To be eligible to file Micro Entity accounts your company must meet 2 of the 3 following criteria:-

Turnover below £632,000

Balance sheet  below £316,000

Average employee numbers below 10

Always consider the above when deciding on what accounts to file. Disclosure versus credit.

Government U-turn is a boost for self-employed

how the general election 2017 will affect business in lincoln

One of the headlines from March 2017’s Budget was news that the government was planning to increase the amount of tax self-employed people have to pay on their earnings. But with the move proving unpopular, Chancellor Philip Hammond has decided to scrap the measure.

Hammond initially announced he would be increasing Class 4 National Insurance Contributions for the self-employed. The plan was it would rise from 9% to 10% in April 2018, and then to 11% the year after. Hammond initially defended the measure on account of a rising number of people becoming self-employed; and the fact they currently pay a lower level of National Insurance contributions than employed people.

However, widespread outrage at the measure – which would have cost every self-employed person an average of 60p a week – and the fact it went against the Conservative Party’s own manifesto lead to Hammond scrapping these plans a week later. This is great news for self-employed people, who no longer face a tax hike on their earnings.