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Companies are not only talking about sustainability; they are also beginning to act. Elise McCarthy explains how companies can support the Sustainable Development Goals through their business activities. Companies are beginning to recognise the role they play in creating a sustainable society and how, by doing so, they are also driving business growth and productivity. Many organisations are looking at the Sustainable Development Goals (SDGs) as a guide. Any company considering how it can support the achievement of the SDGs through their business activities should begin with these five starting points Understand the SDGs In 2015, the world leaders under the United Nations adopted the Sustainable Development Goals for nations and businesses alike to solve the world’s most significant challenges by 2030. Seventeen goals address the global challenges we face by moving to eradicate poverty, promote peace and equality, allow sustainable prosperity and protect the environment. The SDGs are built on 169 targets, which are measured against 232 indicators. It’s a good idea to review the targets and indicators when considering which SDGs offer the most opportunities for your business. Understand your business Looking upstream along your value chain, where does your company source raw materials and staff? How much of these resources does it purchase? This type of information will indicate where your company can make a change and have an impact. By taking cues from the SDGs, your company can set down specifications for suppliers and the resources it purchases.  Alternatively, your organisation could look downstream along the value chain. What products or services does your company make and supply? Are your distribution or logistics as clean and efficient as possible? Could you recycle goods? Would redesigning some products or services make a significant impact on the SDGs? Look for opportunities  There are business growth opportunities in the SDGs. For example, one report identified $12 trillion in savings and new opportunities by achieving the SDGs. The goals are not just branding for what society is already doing; they are goals that require new thinking and an appetite to see change. They are meant to challenge us to think about the world we want to live in, to play to our strengths and to use our power to make a change – even if it is under just one goal. If we all play our part, we will get there. Engage employees These days, most people are interested in sustainability and are trying to implement changes in their personal lives. Tap into that interest and enthusiasm among your colleagues by helping them to play their part at work. Show them that, as a leading employer, the company is also thinking about making smart changes to practices and procedures, and that it wants to involve its people in the journey. This user-friendly guide to the SDGs can help with internal communications and awareness.  Decade of action In September 2019, the United Nations Secretary-General called for more leadership and local action within countries and among individuals to meet these ambitious 2030 goals. Every day events – fires, storms, drought, waste mountains and growing inequality – are reinforcing the urgency of this mission. The clock is ticking but we excel when we put our minds to it. Elise McCarthy is a Senior CSR Adviser in Business in the Community Ireland (BITCI). BITCI has published a detailed guide for business on the SDGs.  

Jan 19, 2020
News

Social entrepreneurs are a valuable and necessary part of society and economy, providing much-needed social and environmental change to communities. Fiona Smiddy outlines how accountants and finance professionals can help support these local social enterprises. Social enterprises are businesses whose core objective is to achieve a social, societal, or environmental impact. Poverty, climate change, anti-social behaviour, housing and health are just some of the problems that Irish social entrepreneurs are attempting to tackle. We need to embrace and support social entrepreneurs as they are a valuable and necessary part of society and economy. Social entrepreneurs often come from range of backgrounds. They tend to see a problem in their local community and devise an innovative solution to help. However, many will run before they can walk, carried by their passion and energy. Below are just some ways that accounting and finance professionals can support their local social enterprise. Provide mentoring services As accountants, we can lend an objective mindset and critical thinking to social entrepreneurs to ensure their enterprise is set up for long-term growth. As in many entrepreneurial scenarios, the main workload often lies with the founder. However, it can be difficult to self-critique when your passion and belief in the solution to your social issue is so strong. A second set of eyes and ears, or the offering of a hand to review a business plan would be welcome support. Improve access to finance Due to their nature, social enterprises often seek alternative methods of funding. EU and government-backed programmes such as the Social Enterprise Development Fund can go a long way to support them. This €1.6 million fund was created by Social Innovation Fund Ireland (SIFI) in partnership with Local Authorities Ireland and funded by IPB Insurance and the Department of Rural and Community Development. There is opportunity for similar funds to be created. With the right financial backing, combined with supportive mentoring programmes, social enterprises can provide much-needed resources to local communities. Open a co-working space With the high costs of rent, many social enterprises are born and run from kitchen tables and inefficient workspaces. Your workplace could provide a platform for social change by opening a boardroom or co-working space on a part-time basis to local social enterprises. Provide training through CSR programmes Corporate Social Responsibility (CSR) programmes can go a long way to support social enterprises. Many of the skills that accountants and finance personnel possess are in demand by social enterprises. Work with your employer to identify training needs of local social enterprises and develop training programmes to assist these mission-driven businesses. Make connections and provide visibility We need more social entrepreneurs to help us find new routes toward social improvement. If you know a social enterprise through your connections or in your local community, use your platform to promote them either via LinkedIn or other social channels. You can even invite them into your workplace to promote their product or service. Social entrepreneurs are drivers of positive change. As accounting and financial professionals, we play a part in their success and must support them in creating positive change for all of us. Fiona Smiddy ACA is the Founder of Green Outlook.

Jan 19, 2020
News

To promote sustainable finance, the finance industry must incorporate environmental, social and governance factors into investment decision-making. Orla O’Gorman explains how companies can enable investors to invest in sustainable, socially responsible assets. The climate crisis is the most impactful and far-reaching agent of change that we will see in our lifetime, the impact of which is comparable only with, perhaps, the industrial revolution. It will permanently alter how our society and economy operate – that includes our financial systems and how capital is allocated. We have already seen the world’s largest asset manager, Blackrock, asserting that climate change will be the focus of its new strategy and that it will reshape the industry as we know it. We have also seen the world’s largest sovereign wealth fund, Norges Bank, divest entirely from all oil and gas exploration. To promote sustainable finance, the industry needs to incorporate environmental, social and governance (ESG) factors into investment decision-making, supporting the allocation and transfer of capital towards sustainable and transitioning assets. Stock exchanges are at the heart of the global financial system and will play a vital role in enabling this transfer in an efficient, transparent way. Two-pronged approach As part of Euronext’s new strategic plan, Let’s Grow Together 2022, we have developed an ESG strategy with a two-pronged approach:  Sustainable practices (what we do internally); and Sustainable products (what we offer externally). Internally, our goal is to embrace the latest and greatest methods of sustainable working. Externally, meanwhile, our goal is to develop and support sustainable products and services for issuers, investors and the financial community, and we have already launched two initiatives in support of this. The first initiative is Euronext Green Bonds, which will allow investors to discover, compare and participate in sustainable investment opportunities and allocate capital accordingly. The second initiative, the publication of our ESG reporting guidelines for issuers, enables listed companies to communicate effectively to stakeholders about their current work in sustainability and assists them in addressing ESG issues with investors that will encourage them to invest in sustainable, socially responsible assets. The guidelines also provide a basic framework for ESG strategy and reporting. Looking to the future We hope that, by empowering issuers and investors with these products and tools, we can make the transition to a sustainable economy and finance a future of which we can be proud.  Orla O’Gorman is Head of Equity Listing Ireland at Euronext.

Jan 19, 2020
Tax

New legislation from the UK government has changed the rules of UK residential property disposals. Maybeth Shaw tells us about these changes and what tax filing and payment obligations need to be adhered to post-6 April 2020. The UK government has passed legislation which will have a major impact on the filing and payment obligations of certain UK resident taxpayers who sell UK residential property from 6 April 2020, applying to both individuals and trusts and only to capital gains tax (CGT). It does not apply to UK resident companies (and, from 6 April 2020, non-resident companies) which are subject to corporation tax on capital gains. This change was initially proposed in 2015 in order to reduce the time between a gain arising on a residential property sale and the tax being paid (in order to bring it closer to the position for other taxes). The April 2020 changes represent an extension of provisions which have applied to the disposal of UK residential property by non-resident persons from 6 April 2015, which was extended from 6 April 2019 to non-residential. Disposals before 6 April 2020 Currently, a UK resident individual or trust disposing of UK residential property that results in a taxable gain is required to report that gain on their annual UK self-assessment tax return. The deadline for reporting the gain and paying the tax due is the 31 January following the year of the disposal. Disposals from 6 April 2020 onwards From 6 April 2020, a UK resident individual or trust disposing of UK residential property will be required to file a “residential property return” within 30 days of the completion date of the disposal. Penalties will apply if the return is filed late. The vendor will be required to pay an estimate of the CGT within 30 days of the completion date. This will be treated as a ‘payment on account’ against their total income tax and CGT liability for that year when their annual self-assessment tax return is submitted by 31 January after the tax year of disposal, if filed online. The individual or trust will, therefore, be required to estimate how much tax is payable. This will depend on several factors which could result in a refund/additional liability being due when the self-assessment return is submitted. If additional tax is due when the annual return is filed, then interest will be payable at the standard rate set by HMRC. Exceptions Some common examples of where a return will not be required are: Where the gain is wholly covered by principal private residence relief for the duration of the taxpayer’s ownership. If a loss arises on the sale of the property. The gain is sheltered by capital losses crystallised before the sale takes place. The gain is small enough to be covered by the individual’s annual exemption for the year of disposal. The return and payment on account will not be required where the property disposed of is not a residential property or where the property is situated outside the UK. From a practical perspective, the taxpayer will need to rapidly determine whether (or to what extent) their gain is sheltered through principal private residence relief and, if it is not fully sheltered, what the gain will be and to what extent it will be sheltered by crystallised capital losses or their annual exemption. As these can take time to assess/calculate, it will often be worthwhile to assess them before the sale has completed. Non-UK residents Non-UK residents have already been required to file returns within 30 days when they have disposed of UK property, both residential and non-residential, since 6 April 2015 and 6 April 2019 respectively. There are no changes for disposals by non-UK resident individuals or trusts from 6 April 2020. Action from 6 April 2020 The application of this legislation to UK residents will be a game-changer in the sense that the tax filing and payment obligations need to be considered immediately on completion of the sale rather than left until after the end of the tax year. It will be common for individuals not to know precisely what their CGT liability will be at the time of the sale and, indeed, some of the relevant information may not be known until after the end of the tax year. For example, this could be the case where the tax liability depends on other disposals or other income in the same tax year. It would, therefore, be prudent to contact your tax advisor much sooner (ideally before completing the transaction) when making residential property disposals in order to submit the returns on time and to determine an appropriate estimate of the CGT liability. Maybeth Shaw is a Tax Partner in BDO Northern Ireland.

Jan 10, 2020
Tax

Without much guidance from Revenue, business owners often struggle with completing their annual Return of Trading Details, at great impact to the business. Alan Kilmartin explains RTD, how it can affect a business and the best way to simplify the process. All VAT-registered persons are required to file a Return of Trading Details (RTD) following the end of their accounting period (which is usually aligned to the financial year). The RTD is a statistical return summarising actual sales and purchase figures, the VAT on which was included in the less detailed periodic VAT returns during the accounting period. The return gathers the information through four key questions: Have you made supplies of goods or services? Did you acquire any goods or services from the European Union, including Northern Ireland? Did you purchase goods or services for resale? Did you purchase goods or services that are not for resale but where VAT paid on them can be claimed as an input credit?      The fields on the return are completed using the net sales or purchase figures at the various VAT rates applicable to the relevant transactions. For example, the net total sales of goods and services supplied for question 1 would be broken down into the various VAT rate categories (9%, 13.5%, 23%, etc.) and included in the return based on the total for each rate. The potential impact of the RTD The RTD must be filed on the 23rd of the month following the end of the accounting period. Therefore, if a business has an accounting period which ended on 31 December 2019, the RTD is due to be filed by 23 January 2020. The return is, as mentioned, a statistical return and, as such, does not carry an obligation to pay any VAT liability. Essentially, the RTD is used as an audit tool to assist Revenue in verifying the accuracy of periodic VAT returns filled during the accounting period. Revenue have stated in recent guidance that when a nil RTD is filled, it will be rejected when there have been positive values in the VAT returns for the accounting period, so it is important to ensure that the RTD reconciles with the VAT returns made to Revenue in the period which it covers. It is recommended to carry out a reconciliation of the RTD with the VAT returns because it is quite likely that one will be carried out by Revenue and if there are discrepancies, Revenue may choose to audit your client’s business. In contrast to VAT returns, there is no option to complete a Revenue Online Service (ROS) offline file in respect of the RTD and, therefore, the return must be completed ‘live’ on ROS. Failure to file an RTD can affect the cash flow of a business as tax refunds, under any tax head, can be withheld until the RTD has been filled. Also, Revenue may refuse to issue tax clearance certificates until the RTD has been filed. How to simplify the process In order to ensure that the information provided to Revenue is correct, it is recommended that businesses fully utilise the functionality of their ERP/accounting systems and ensure the tax and VAT codes within those systems take account of the data required to be declared in RTDs. In addition, preparing the RTD on a periodic basis when preparing the periodic VAT return will alleviate pressure during the “year-end” process. Despite an overhaul in recent years, the RTD still contains obvious flaws and its completion, in parts, is certainly open to interpretation by the taxpayer. Furthermore, in the absence of definitive guidance from Revenue, it is not surprising that taxpayers often have difficulty completing this return. So, are you RTD ready? Alan Kilmartin is a Director of Indirect Tax in Deloitte.

Jan 10, 2020
Management

Sarah Daly explains how introducing some new time management methods into your day can help you manage your time more efficiently. In business, time is definitely money. Yet, while learning to prioritise competing demands is a skill that I have tried to develop over the years, like many business owners and managers, I find that unless I consciously manage time, there is always a risk of spending too many hours working ‘in’ the business and not enough hours working ‘on’ it. Talking to other accountants, I know that I’m not alone with this problem. In a busy office where clients phone in with urgent requests throughout the day, it is easy to fall into a pattern of running from one crisis to another. While some of these demands are genuinely urgent and have to be dealt with there and then, others are less urgent, and some – like spending too much time on email – can be a habit that, although neither urgent nor important, can take up a significant chunk of time. The key to good time management is learning to understand how you and your team spend your time each day so that you can identify opportunities to improve efficiency. The idea of analysing tasks and learning how to allocate time appropriately is not new. In his book, The Seven Habits of Highly Effective People, management guru Stephen Covey explains that by categorising tasks into those that are ‘important and urgent’, ‘important but not urgent’, ‘urgent but not important’, and ‘not urgent and not important’ can help you get ahead of the game. Categorise First thing is to decide what tasks go in which category. Where does your daily check-in with staff go on the list? How about returning client calls? Tasks that are both urgent and important should be done first (obviously) while those that are in the ‘not urgent and not important’ category may not need to be done at all. At least not by you. Tools to help Today, there are tools that can help analyse how you and your team allocate your time, from monitoring time spent on social media to analysing time spent on particular projects or clients. One that I particularly like is the MyHours time tracking solution which has helped me to identify my most valuable work and eliminate time-wasting activities. Dedicated email time Another technique I find useful is having two slots a day for email — one in the morning and one toward the end of the day — rather than allowing email to constantly interrupt me. For me, email is usually in the ‘important but not urgent’ category, but your emails might be important and urgent, so adjust your email time as needed. Outsourcing It is worth reminding yourself – and your clients – that time-consuming administrative tasks can often be outsourced to specialist service providers, freeing business owners and managers to spend more time working 'on' rather than 'in' the business. What means the most to you? Finally, at this time of the year, it is worth reflecting on whether the things that mean most to us – like spending time with family and friends or looking after our health and wellbeing – are sufficiently high priorities on our ‘to do’ list, falling into the ‘important and urgent category’. If not, now is the time to get them on to our list of priorities for the coming year. Sarah Daly is Founder and CEO of GroForth.

Jan 10, 2020