LT writes: We have a problem with theft. It’s small and petty but I am afraid it may snowball. What measures can I introduce? If I discover who the culprit is, how should I dismiss him?

Issue a memo to all staff saying all theft must stop immediately, writes Peter Done, managing director of Peninsula. This may help to reduce losses while you investigate the matter.

You must inform your workers about your policies and procedures, any internal controls in place to prevent theft, your code of conduct and what disciplinary action will be taken for breaches. Clear policies and procedures and some form of incentives may help to head off any threat of theft.

You normally have to follow a “standard” three-stage minimum dismissal procedure: setting out the problem in writing; allowing the employee a face-to-face meeting to discuss it; and giving the individual an opportunity to appeal if the decision goes against him.

You should interview any witnesses, including the employee. If the investigation suggests that disciplinary action is warranted, call a hearing. Give the worker ample warning and tell him he may be accompanied by a colleague or union official. Before the hearing, send him written details of the allegations and the reasons you believe that he is responsible.

During the meeting, take written minutes. Once you have given your decision in writing, the employee should be given the right to appeal. It would be ideal for a more senior manager to deal with any appeal that the employee makes.

Building work may escape tax scheme

D W writes: My property firm is about to rebuild some walls in its offices. Will this work bring it within the construction industry scheme?

Firms that work in the construction industry or do construction-related work have certain obligations under the construction industry scheme (CIS), writes Jon Sutcliffe, partner at Kingston Smith LLP. These include registering under the CIS, checking whether your subcontractors are registered, making deductions from payments to subcontractors where necessary, and submitting monthly paperwork.

Even if your firm doesn’t do building work, it might still be a contractor or be treated as a “deemed contractor”, which means that HM Revenue & Customs would require it to register with the CIS.

I assume your firm is not involved in building, or it would already be registered. Property investment firms are not covered by the CIS as long as they spend less than an average of £1m a year over three years on construction operations.

Although the CIS rules state that the expenditure on the firm’s own business premises (those not for sale or let to third parties) is outside the CIS, the £1m limit includes work on the company’s offices.

So, depending on the nature of your business and the annual construction spending, it is possible you may not need to register.

The Revenue website at hmrc.gov.uk/cis/cis-intro.htm has further details.

Kingston Smith LLP, the chartered accountant, and Peninsula, the employment-law firm, can advise owner-managers on their problems. Send questions to The Business Doctor, The Sunday Times, 1 Pennington Street, London E98 1ST, or fax to 020 7782 5765. Advice is given without legal responsibility.

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