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Tax

Nothing can ruin a summer like getting caught with unreported taxes. Renee Dawson has provided a short guide to some common pitfalls in employment taxes. As we start a new tax year, it is an opportune time for employers to review employment taxes for the year ahead and identify any weaknesses in tax reporting processes. This article aims to highlight some common areas where employers can inadvertently fail to report employment taxes accurately. Staff entertainment All payments made to or on behalf of employees should be reviewed. Are employers funding staff entertainment, which falls outside the scope of HMRC exemption of £150 per employee for annual events? The supply of meals to staff when working late or the funding of team events can lead to an employment tax liability. Employers should consider applying for a PAYE Settlement Agreement with HMRC for the 2019/20 tax year to remove the need to declare on forms P11D.  Trivial benefits The provision of vouchers to employees at Christmas should be reviewed in conjunction with HMRC trivial benefits exemption. This exemption allows employers to provide non-cash gifts of up to £50 per employee tax-free as long as the gift is not an incentive or reward for service and is provided to all employees. Any vouchers provided to employees exceeding £50 or as an incentive or reward must be either returned on form P11D or included in a PSA. Termination payments Following the changes to the taxation of termination payments in April 2018, employers must comply with the new rules regarding Post-Employment Notice Pay (PENP) whenever an employee leaves without working a full notice period for whatever reason. The notice period must be confirmed using the PENP formula and pay as you earn (PAYE) and national insurance contributions (NIC) applied. This is due to change from 6 April 2020, when ex-gratia payments in excess of £30,000 will be subject to employer’s NICs. If the termination qualifies for £30,000 tax exemption under S 401 ITEPA 2003, any excess payment over this amount is subject to tax only and is still NIC free. This, however, is due to change from 6 April 2020, when payments in excess of £30,000 will be subject to employer’s NICs. Cash allowances Many employers are unaware of the full extent of the changes to salary sacrifice introduced in April 2017. Now called Optional Remuneration, the changes removed the tax advantages with the exception of pensions, childcare vouchers and cycle-to-work schemes. However, Optional Remuneration also introduced new rules where the employee has a choice of a benefit or a cash alternative. The most obvious example of this is a cash allowance in lieu of a company car.  Where there is a clear choice available, the employee who chooses the car will be taxed on the actual car benefit calculated according to the car list price and CO2 or the cash foregone, thus removing any taxable benefit in selecting a green CO2 friendly car.  Director current accounts Employers should aim to closely monitor any director current accounts to establish if there is a reporting requirement. Many directors regularly use their current account for cash withdrawals and clear the outstanding balance prior to the accounts year-end by payment of a dividend. However, many employers do not realise that, even though the account has been cleared at year-end, a significant overdraft exceeding £10,000 during the year could lead to a benefit in kind reporting obligation.  Temporary subsistence rules Care should be taken when employees are working away at a temporary location. Employers should monitor the 24-month rule for travel and subsistence costs under temporary workplace rules. If it is known from the outset that the assignment will exceed 24 months, the payments will be taxable from day one, or if it becomes apparent during the course of the secondment tax should be applied from that date.  Many employers will choose to place employees in rental accommodation rather than a hotel. This can cause issues for tax, especially if the amounts involved exceed £2,500 per annum.  HMRC requires the employee to complete a tax return to disclose the benefit and then make a contra-business expense claim to negate the benefit.  Off-payroll working Any gross payments made to individuals working off-payroll should be treated with caution. Payments to an individual who claims to be self-employed should be scrutinised to determine the status based on the tests such as control, integration, substitution and financial risk, and you should ensure that a contract of service does not apply to make the arrangement one of employment.  However, if the individual is operating through the intermediary of a personal service company (PSC) and provides services to an engager in the private sector, the risk lies mainly with the PSC rather than the engager, at present. From April 2017, for PSCs operating in the public sector, the burden of responsibility rests clearly with the engager making the payment to the PSC. The roll-out of this legislation to businesses in the private sector will take place on 6 April 2020. It is worth pointing out that the PSC will be taxed as an employee but will not benefit from any employment rights.  In advance of the new rules to come into effect on 6 April 2020, employers should review all engagements with PSCs. HMRC have introduced a new interactive tool called CEST (check employment status tool) to assist with this review. All payments made outside payroll should be reviewed on an individual case by case basis. This presents a risk for employers and potentially increased costs with the employer’s NICs.  The new tax year brings a fresh opportunity to review all employment tax reporting obligations and the systems in place to ensure you are fully compliant with HMRC. Happy new tax year!   Renee Dawson is Tax Senior Manager at BDO Northern Ireland.

Jun 03, 2019
Tax

David Duffy highlights the latest VAT cases and discusses recent VAT developments. Irish VAT updates eBrief 48/19 contains links to several new and chapters of Revenue’s Tax and Duty Manual (TDM) concerning VAT. The new chapters primarily concern the VAT treatment of activities of public bodies, and the VAT treatment of certain types of vouchers (see below). Also, there have been updates to several chapters of the TDM to reflect the increase in the VAT rate for certain supplies from 9% to 13.5%, which took effect on 1 January 2019. Public bodies This guidance does not appear to reflect any particular change in Revenue practice in respect of the VAT position of public bodies, but instead seeks to summarise the current position. A public body’s activities are generally outside the scope of VAT where they are undertaken under a power conferred on the public body by any enactment, and the public body is not in competition with private operators in respect of that activity. However, where not applying VAT on the public body’s activities would give rise to significant distortions of competition with private operators, those activities will generally be subject to VAT in the same manner as for private operators. In addition, VAT legislation specifies certain activities that are automatically within the scope of VAT (unless VAT exempt) when carried out by a public body. This includes, but is not limited to, telecommunication services, supplies of water, gas, electricity and thermal energy and transportation of goods. Vouchers New VAT rules in respect of certain types of vouchers, known as single purpose vouchers (SPVs) and multi-purpose vouchers (MPVs) have been in place since 1 January 2019. In eBrief 48/19, Revenue released guidance on the VAT treatment applicable to other types of “vouchers” that do not fall within the meaning of an SPV or MPV. This includes instruments such as stamps (but not postage stamps), coupons, telephone cards, tokens and book tokens (collectively referred to as “vouchers” in the TDM). The guidance sets out the rules that apply to such vouchers in several scenarios, which broadly follow the VAT rules that were already in place before 1 January 2019. In the normal course, no VAT is due on the sale of such vouchers at face value to private customers, and VAT only becomes due when the customer redeems the voucher. However, where the price charged for the voucher exceeds the face value of the voucher, VAT is chargeable at the standard rate (currently 23%) on the difference between the face value and the consideration paid. The sale of vouchers to a VAT-registered person for resale to private consumers (e.g. an intermediary) is liable to VAT at the standard rate (currently 23%) on the payment received. Any future sales of these vouchers by the intermediary, or subsequent intermediaries, is also liable to VAT. No VAT is due on the redemption of the voucher in these circumstances. The sale of a voucher at a discount to its face value is not subject to VAT until the voucher is redeemed. Provided detailed records are kept, the issuer may account for VAT on the discounted sales price received rather than the face value of the voucher. Mandatory e-filing eBrief 068/19 confirms that electronic filing of VAT returns and electronic payments of VAT on Revenue Online Service (ROS) are mandatory for all taxpayers, including new registrations. This has been the case for many years following a phased implementation. EU VAT updates Place of supply on training courses SRF is a company established in Sweden, which provides educational and vocational training to businesses mainly established in Sweden. The courses take place both in Sweden and other EU member states.  The question referred to the CJEU in the SRF case (C-647/17) was whether the place of supply of these training courses was where the business customer was established (i.e. Sweden) or where the course took place. The latter treatment would apply if the service should be classified as ‘admission’ to an educational event, which is an exception to the general place of supply rules for business-to-business services. The CJEU confirmed that the “place of supply” should, in as far as possible, be the place of consumption. Therefore, the CJEU concluded in this case that admission to, and the right to participate in, these training courses should be subject to VAT at the place the courses took place. VAT treatment of  driving lessons In the A&G case (C-449/17), a German driving school sought to treat their driving tuition services in respect of cars and vans as VAT-exempt “school or university education”. However, the CJEU did not agree that VAT exemption could apply in these circumstances and in the CJEU’s view, “school and university education requires the following features: An integrated system for the provision of knowledge and skills relating to a wide and varied range of matters; and The deepening and development of such knowledge and skills by pupils and students according to their progress and their specialisation at the various levels constituting the system. Based on this, the CJEU concluded that driving lessons in a driving school do not fall within the scope of “school and university education”. The CJEU did not consider whether the tuition services could have been treated as “vocational training”, which is a separate heading within the same exemption. The judgment, therefore, largely supports the current Irish VAT position, which treats driving lessons as subject to VAT, except where they are in respect of vehicles assigned to carry at least 1.5 tonnes of goods or at least nine persons (including the driver). David Duffy FCA, AITI Chartered Tax Advisor, is a VAT Partner at KPMG.

Jun 03, 2019
Tax

EY’s Helen Byrne, Sherena Deveney and Brendan McSparran FCA outline the relevant compliance dates for June and July 2019. Republic of Ireland  Relevant dates for companies 4 June 2019 Dividend withholding tax return filing and payment date (for distributions made in May 2019). 21 June 2019 Due date for payment of preliminary tax for companies with a financial year ended 31 July 2019. If this is paid using ROS, this date is extended to 23 June 2019. Due date for payment of initial instalments of preliminary tax for companies (not “small” companies) with a financial year ended 31 December 2019. If this is paid using ROS, this date is extended to 23 June 2019. 23 June 2019 Last date for filing corporation tax return CT1 for companies with a financial year ending on 30 September 2018 if filed using ROS.  Due date for any balancing payment in respect of the same accounting period. Loans advanced to participators in a close company in the year ended 30 September 2018 may need to be repaid by 23 June 2019 to avoid the assessment (on the company) of income tax thereon. A concessional three-month filing extension for iXBRL financial statements (not Form CT1) may apply. For 30 June 2018 year ends, this should extend the iXBRL deadline to 23 June 2019. 30 June 2019 Last date for filing third-party payments return 46G for companies with a financial year ending on 30 September 2018. Latest date for payment of dividends for the period ended 31 December 2017 to avoid Sections 440 and 441 TCA97 surcharges on investment/rental/professional services income arising in that period (close companies only). CbC Reports/Equivalent CbC Reports for the fiscal year ended 30 June 2018 (where necessary) must be filed with Revenue no later than 30 June 2019. 14 July 2019 Dividend withholding tax return filing and payment date (for distributions made in June 2019). 21 July 2019 Due date for payment of preliminary tax for companies with a financial year ended 31 August 2019. If this is paid using ROS, this date is extended to 23 July 2019. Due date for payment of initial instalments of preliminary tax for companies (not “small” companies) with a financial year ended 31 January 2020. If this is paid using ROS, this  date is extended to 23 July 2019. 23 July 2019 Last date for filing corporation tax return CT1 for companies with a financial year ending on 31 October 2018 if filed using ROS. Due date for any balancing payment in respect of the same accounting period. Loans advanced to participators in a close company in the year ended 31 October 2018 may need to be repaid by 23 July 2019 to avoid the assessment (on the company) of income tax thereon. A concessional three-month filing extension for iXBRL financial statements (not Form CT1) may apply. For 31 July 2018 year ends, this should extend the iXBRL deadline to 23 July 2019. 31 July 2019 Last date for filing third-party payments return 46G for companies with a financial year ending on 31 October 2018. Latest date for payment of dividends for the period ended 31 January 2018 to avoid Sections 440 and 441 TCA97 surcharges on investment/rental/professional services income arising in that period (close companies only). CbC Reports/Equivalent CbC Reports for the fiscal year ended 31 July 2018 (where necessary) must be filed with Revenue no later than 31 July 2019. General 30 June 2019 Claims under the VAT compensation schemes for charities for VAT on paid on expenditure in 2018 must be submitted by 30 June 2019. Deadline for FATCA and CRS reporting obligations for 2018. 05 July 2019 Under mandatory reporting rules, promoters of certain transactions may be required to submit quarterly ‘client lists’ in respect of disclosed transactions madae available in the relevant quarter. Any quarterly returns for the period to 30 June are due on 5 July. 30 July 2019 Due date for submission of return and payment of IREF withholding tax in connection with accounting periods ending between 1 July and  31 December 2018. Due date for IREFs to file financial statements electronically (in iXBRL format) with the Revenue in respect of accounting periods ending between 1 July and 31 December 2018. Northern Ireland  Relevant company dates 14 June 2019 For accounting periods beginning on or after 1 April 2019, a company whose augmented profits for the period exceed £20 million (as reduced where required) are referred to as a “very large company”. Very large companies are required to pay all of their corporation tax in instalments during the accounting period. For a 12-month accounting period, the first instalment is due two months and 13 days after the first day of the accounting period and each subsequent payment is due three months after the last. For example, a company with a 12-month accounting period ended 31 March 2020, the instalment payments are due on: 14 June 2019 14 September 2019 14 December 2019 14 March 2020 Each instalment should represent 25% of the company’s estimated corporation tax liability. 30 June 2019 If a company has to comply with Senior Accounting Officer (SAO) regulations, they will need to nominate a SAO and inform HMRC of the individual. A SAO of a qualifying company must provide HMRC with a certificate no later than the end of the period allowed for filing the company’s accounts for the financial year with Companies House. For public limited companies, this is six months after the end of the accounting period, i.e. 30 June 2019 for a company with a 31 December 2018 period end.  For groups that are subject to a corporate interest restriction, a “reporting company” (if desired) must be nominated within six months of the end of that period of account. 14 July 2019 Due date for the first quarterly instalment payment for “large” companies with a period ended 31 December 2019.  Due date for income tax for the CT61 period to 30 June 2019. Personal tax 31 July 2019 First payment on account towards the taxpayers 2018/19 liability is due.   Any 2017/18 tax returns submitted after this date will be subject to a penalty amounting to the higher of £300 or 5% of the tax due for the year.   Any tax for 2017/18 not paid by this date will be subject to a further 5% penalty (in addition to an interest charge). Corporation tax 01 June 2019 Due date for corporation tax for companies with a twelve month period end 31 August 2018 that are not “large” or “very large”. 14 June 2019 Due date for quarterly instalment payments for “large” companies (with a twelve month accounting period): Period end 30 November 2019 – first quarterly instalment; Period end 31 August 2019 - second quarterly instalment; Period end 31 May 2019 – third quarterly instalment; and  Period end 28 February 2019 – fourth quarterly instalment. 01 July 2019 Due date for corporation tax for companies with a twelve month period end 30 September 2018 that are not “large” or “very large”. 14 July 2019 Due date for quarterly instalment payments for “large” companies (with a twelve month accounting period): Period end 31 December 2019 – first quarterly instalment; Period end 30 September 2019 - second quarterly instalment; Period end 30 June 2019 – third quarterly instalment; and Period end 31 March 2019 – fourth quarterly instalment.  

Jun 03, 2019
Careers

With the changed audit landscape, a lot more goes into audits now than in the past. Aine Morgan takes us through a purposeful audit planning process. In working with my clients over the last few weeks, I considered what could be improved during the busy season. One issue that presented repeatedly was insufficient audit planning. It is apparent to me that we are not making time for audit planning as we often undervalue the importance of this critical process. These days, the planning sections of our digital files are significantly more comprehensive than the skinny section of the lever arch file when many of us trained as auditors. The regulatory environment in which we work has evolved and the way we audit has changed radically, making audit planning an even more important task. The best way to ensure that you perform planning procedures for the next busy season is to start planning for planning today. Today Block off two hours in your calendar sometime in the next two weeks to plan for planning.  Your brain will very likely tell you that this pre-planning isn’t necessary and two hours is too much time, but you will thank yourself later in the year.   Your instinct might be to invite the whole team go to this meeting. I encourage you to think carefully about whether or not you want to invite others to this session.  To the extent that you feel it would be helpful to have the input of someone else, be very specific about the exact inputs you’re require from them.  Someone really needs to own planning and that’s going to be you. Consider doing this first session alone and getting input from the rest of the team later. Within two weeks Honour the slot in the calendar when it is time to plan. Close your door and get to work.  You don’t need to check your phone and you don’t need to keep your emails open. These two hours are for planning. It’s going to pay off hugely as you move into the 2019/2020 season. During this planning session, map out what outcomes would comprise a really successful audit plan in as much detail as you can, including acceptance and continuance, internal and external planning meetings, meaningful materiality calculation and fraud risk assessments, control environment testing (taking into account the three year rule), and specialist or expert involvement. This will require you to go into last year’s file and critically consider the work you did.  Ask yourself : how would I feel about this file if it had just been pulled for external review? From there you will know exactly what you want to drill down into this year, and what planning procedures that will require. With a clear view in mind of what you need to plan, make sure you have the staff you’ll need. Make a list of the meetings you will need to have as part of planning procedures,  including a kick-off meeting, taking-stock meetings and client meetings. Make a list for team members who will need to be invited to these meetings.  Close out this session by scheduling time in the partner’s calendar to bring her up to speed on the upcoming audit plan and get her input. Schedule time with your senior as well, so that you can delegate and get him or her started. Within the next month It’s important to meet with the partner as planned and get her input in the next month. The meeting does not need to be formal, but document all discussions and file them to demonstrate the partner’s involvement at all stages of the audit workflow. Meet with your audit senior and have him calendar all the meetings that you planned two weeks ago, both internally and externally. Your brain will think that it’s too early in the year to do this. It isn’t. The earlier you have those meetings carried out, the more ease you bring to the whole audit workflow, and the more meaningfully you can incorporate the outcome of those meetings into your audit plan. Have your senior schedule these meetings well ahead of time, and make the invitation to other staff non-optional.  ISA 300 requires all team members to be at the planning meeting and properly onboarded by agreeing the nature and extent of deliverables from specialists, and timing, so make sure they are actively engaged in key audit strategy discussions. Delegate the work you require your senior to complete ahead of the kick-off meeting to your audit senior and have him put it in his calendar. He should also schedule time in your calendar for review of this work together and to create an agenda for the kick-off meeting.  Within the next three months Review planning procedures in the next three months. If you usually conduct the kick-off meeting in a presentation style, consider moving away from this. Instead, file client/audit history/background information on a shared drive where the team members can read about it ahead of the meeting. Using valuable meeting time for this kind of re-cap may not be the best use of the team’s time. When crafting the kick-off meeting’s agenda, ensure the team members’ time can be optimised and that the key ISA-relevant planning meeting issues of materiality, fraud and audit strategy planning are addressed. Keep minutes documenting key outcomes, making sure to always take note of the partner’s involvement in those discussions so that her footprint is evident. Tailoring your approach For smaller entities, the above process will be too much given the risk profile. That said, just having the kick-off meeting on the first day of the audit is no longer sufficient. As soon as you can, schedule time in the calendar to consider what the success factors of the audit planning process would be for you. Delegate and schedule meetings as above, using well thought out agendas, maximising everyone’s time. A 30-minute engaged kick-off meeting where meaningful inputs are exchanged and risks discussed and documented is a sound basis for a smaller, risk-focused audit that will keep everyone’s focus in check from the get-go. It’s 2019 and the way we audit has changed radically from when we were trained. We know it, but many of us need to start living it. Aine Morgan is the owner of Aine Morgan Coaching and coaches Big 4 Mums who  are returning to work after maternity leave.

Jun 03, 2019
Careers

Credible vulnerability is a powerful and often underused tool that offers significant benefits for those who are both brave and disciplined in its application. Vulnerability, openness and resilience pepper all leadership conversations at the moment. As leaders, we are encouraged to share our softer side, the impetus being that staff cannot be what they cannot see. We model the behaviours of our organisation’s vision to reap the cited benefits, which include a more resilient culture and talent development. We define vulnerability as exposure to the possibility of being attacked or harmed, either physically or emotionally. However, recent studies have found that well-placed weakness is humanising, as we judge others less harshly than ourselves. Remember when Jennifer Lawrence tripped when accepting an Oscar? The public loved her all the more for it. Recent psychological studies describe such situations as “a beautiful mess”, where we view vulnerability in others as alluring while seeing it in ourselves as a weakness. I was inspired by a client who was asked to speak to a leadership development group about their career setbacks; how they experienced them and how they ultimately got past them. While fearing brand damage, this client embraced the task and laid open their experiences and their accountability for them. The participant feedback included “inspiring”, “refreshing”, “changed their perspective” but more important was the change it provoked in my client. Being vulnerable and receiving feedback, acceptance and endorsement liberated my client from any lingering doubts about their culpability for past events. It strengthened their resolve to practice credible vulnerability and their ability to do so in the moment. So in this world of spin, where everyone is playing the upside, really embracing vulnerability is a bit like visiting the Great Barrier Reef – if you snorkel, you can say you have been there, but you only really feel the magic if you dive right in. When used appropriately, such well-timed vulnerability can differentiate you and supercharge your personal and professional development. Sharing your vulnerability will: Remind you of what you have achieved, despite the odds (for example, admitting that you hate public speaking but getting on with it by actively putting yourself in that space). This reminder brings to your forebrain the knowledge that you can learn, progress, change and overcome – particularly now that you know so much more than you knew then; Recalibrate your thoughts by sharing past negative experience, which ‘outs’ your fears and mentally ties up loose ends. When faced with career difficulties, we often spend so much time spinning the upside that there is little time left to reflect on our responsibility and its limits. This rush allows doubts to fester inside. For example, I worked with a highly capable and conscientious colleague who, after a setback early in her career, was told: “You are the type of person who is only good at doing one thing; you don’t show an ability to manage many things at the same time”. While my former colleague defended herself in the moment, this comment echoed deep inside and affected her future choices. Finally retelling it to her team (both the feedback and the context) allowed her to see the situation with fresh eyes and witness the reaction of her team, who recognised the unfairness when the organisational structure failed to support the delivery of multiple projects. It took ten years to make peace with that career setback, and my former colleague achieved it in just 10 minutes; Release you from your fears. The impact on my former colleague was immediate; suddenly she put herself out there, went for more jobs and was promoted twice in the following two years; Resonate with people. Credible vulnerability changes how people respond to you and by laying out your fallibility, you cross the management divide into human land. You grieve; you worry; you don’t have all the answers, and the very act of admission shows strength. Trust is borne and can enhance your ability to influence, lead and inspire change. This is the road to lasting career success. A manager despaired trying to deliver a cross-functional project with two other managers, whose support was lukewarm. In frustration, she exclaimed: “All I want to do is survive each day and go home to my children!” The impact was immediate – the others understood her project ambition as delivery, not empire building, and she released herself from the fear of being misunderstood. She let her team see her “beautiful mess”, and they couldn’t resist it. This trio collaborated in many ways over the years to the benefit of all three, and she became known across the organisation as someone ‘real’ who would do their best for you, which in turn made it easier to get things done; and Provide real-time feedback. I worked with one man who, after every meeting, asked: “How do you think that went?” After listening, he always went on to say: “If there were one piece of feedback I could give myself, I think I could have...” I asked why, and his response was simple – to stop him mulling over it and to see others’ reactions. “If it resonates, I need to do something about it,” he said. Success criteria The size of the prize, both personal and professional, is enormous but this strategy is not without risk. So, arm yourself as follows: Professional credibility comes first. Avoid the ‘pratfall’ factor where weakness is perceived to be evidence of incompetence; Language should be professional and emotionally measured in line with your culture; Capitalise on your vulnerability by offering reflection (for example, “At that time, I...” or “Looking back now, I can see that...”; Employ controlled emotion. People will forget the facts of the story, but will remember the feeling; Pre-frame the vulnerability to avoid over-identification. For example, “This may or may not resonate with you. Either way, if it makes you think, that’s a good thing”; and Remain vigilant to the reaction of your audience. You may need to change tack to stay in a credible space. Be ready to do so. So, given the increasing need and challenge to differentiate ourselves in today’s competitive workplace, credible vulnerability is a powerful and often underused tool that offers significant benefits for those who are both brave and disciplined in its application. Be that person, and you will immediately differentiate yourself, connect with others, and enhance your influence and leadership.   Louise Molloy is Director of Luminosity Consulting & Coaching.

Jun 03, 2019
News

We are in a period in which technologies are at once emerging, resurging and converging. Companies across virtually every sector are positioning themselves to outpace their competition by embracing and implementing innovative, technology-based business models to create differentiated value. It comes as no surprise that respondents to KPMG’s 2019 Technology Industry Innovation Survey ranked Internet of Things (IoT) as the top driver of business transformation over the next three years. From wearable health monitors to connected homes and cities, everything feels “smart” these days and is interwoven with a myriad of devices and applications. International Data Corporation (IDC) forecasts global IoT spending will reach $745 billion this year, and $1.2 trillion in 2022. A revealing aspect of the survey is that, while the top ten technologies was essentially the same as last year, the order has changed dramatically. Robotic process automation (RPA) and blockchain both jumped up significantly in this year’s ranking. Robotic process automation RPA comprises the software bots that facilitate the automation of manual and structured activities. It is viewed as an entry point in the spectrum of intelligent automation (IA), which is a broad portfolio of enhanced and cognitive automation applications that also includes machine learning and true artificial intelligence (AI). In offices around the globe, automated software bots are already performing numerous basic tasks and even making decisions that were previously in the domain of humans. RPA complements and augments human skills and boasts the power to exponentially increase the speed, scale, quality, precision and efficiency at which enterprises operate. Blockchain Since 2008, blockchain has progressed from being overhyped and disparaged to now firmly in the implementation phase. In fact, worldwide spending on blockchain solutions is forecast to reach $11.7 billion in 2022. According to the survey, 41% of technology company leaders expect to implement blockchain technology at their company over the next three years. Similarly, nearly half (48%) believe blockchain will change the way their company does business. Implementation issues Almost regardless of the specific technology, industry leaders most frequently cited the bottom line impacts of “improved business efficiencies” or “increased profitability” as the top benefits of adopting transformational technologies. Surprisingly, “increased market share” was only named once and “new revenue streams” was not ranked in the top three for any technology. This implies that business leaders are more focused on taking costs out of their business and are uncertain about how new technologies can transform their business models to grow revenue and market share. This point is reinforced by the fact that “unproven business case” was the top cited challenge with adopting new technologies. As for other perceived challenges with adopting these technologies, respondents also said they were given pause by “technology complexity.” Another popular concern was “security”, ubiquitous in today’s business world as data or privacy breaches can cause untold reputational and financial harm. Top 10 technology rankings: Internet of Things Robotic process automation Artificial intelligence, cognitive computing, machine learning Blockchain Robotics and automation Augmented reality Virtual reality Social networking, collaboration tech Biotech, digital health, genetics On-demand marketplace platforms You can read KPMG’s full report here. Anna Scally is Partner, Head of Technology and Media and Fintech Lead at KPMG.

May 23, 2019