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The end of January sees several customs changes that will have a significant impact on Irish exporters to the UK. Brian McNamara discusses what you need to know to avoid delays and charges After several delays, HMRC will finally introduce full UK import checks on goods coming from the island of Ireland. On the same day, the UK Department for Environment, Food & Rural Affairs (DEFRA) import controls will also begin for certain food and plant products coming from the European Union. Below are three important points businesses moving goods to the UK should be aware of in relation to these changes: 1. UK import declaration and goods movement reference The biggest change from 31 January is that UK customs filings must be done prior to departure of the goods. Up to this point, there has been an easement in place allowing the import declaration to be carried out after the event. From Wednesday next, if the UK import declaration has not been submitted, the goods simply won’t get on the ferry in Dublin or Rosslare. Further, truck drivers will need to scan a goods movement reference (GMR) document when checking in with the ferry company. The import declarations for all goods on the truck need to go into the GMR. Exporters should talk to all parties in their supply chain (freight companies, clearance agents and UK suppliers) and get comfort that all necessary documents will be in place to ensure their goods keep moving. 2. DEFRA controls The 31 January also sees the introduction of health controls on the import of certain foods of animal origin (FOAO), plants and plant products from the EU. While the EU insisted on such checks on UK imports straight away on 1 January 2021, the UK government elected to delay the introduction of a similar regime. These DEFRA import requirements include the advance notification of the consignment on the UK’s IPAFFS system, and the submission of an export health certificate for certain goods. DEFRA has classified all FOAO, plants and plant products as either low, medium or high risk. The exact requirements each category of goods is subject to will depend on their risk classification. Exporters in the agri-food and plant industries should get a clear picture of the risk category of their goods and ensure all necessary steps are taken. As with the general UK import controls, if the correct submissions are not made, the goods won’t move. 3. Repairs/goods moving for processing Ireland is a smaller market than the UK. In some industries there isn’t the same level of capability locally, so it’s not unusual for goods to go to the UK for repair or further processing. A common misconception concerning customs is that, if goods are not being bought/sold, people think there is no import duty due on them – machinery moving to the UK temporarily for repair, for example. This is not the case, however. Once goods cross a customs frontier, an import declaration is required, and the goods are potentially liable to import duty. It is possible to gain relief from import duties on goods entering the UK temporarily by using Customs Special Procedures such as Inward Processing or Temporary Admission. However, businesses should be aware that it can take time to properly put these procedures in place. Taking short cuts could lead to the goods getting stuck and/or incurring import duty and VAT. So to an extent, the full impact of Brexit will only now be felt by Irish companies moving goods to the UK. To stay on top of this, businesses should make sure that all the correct documents are in place to keep their goods moving, minimise import duty and stay customs compliant. Brian McNamara is MD at SwiftFile Customs.

In the complex landscape of corporate decision-making, understanding the differences between ESG and sustainability is crucial, writes Dan Byrne Corporate decision-making today involves a lot of talk about the environment, social and governance (ESG) and sustainability – precisely, how your company will fit into both movements. No one wants to discover they don’t know the difference between the two in the middle of a board meeting. While the two ideas share a lot of overlapping principles, they are different. It is essential to understand these difference because, once you sit down with colleagues to oversee core strategic decisions, you must have robust knowledge about the relevant topics. The difference between ESG and sustainability Sustainability is a principle dictating that, while we must look after the needs of our current society, it cannot be to the detriment of future generations. The concept of sustainability is so broad that it inevitably means different things in different boardrooms. The common thread in most organisations is that sustainability principles guide stakeholder expectations and, as a result, company strategy. ESG isn’t a principle; it’s a framework for measuring specific impacts and risks. It is a tool that can help investors and stakeholders to understand where their money is going. Why the confusion? There is a lot of overlap between ESG and sustainability, so organisations often file them under the same heading. In practice, companies embracing ESG will often commit to not harming the planet (environment), its people (social) or themselves (governance). While this should always be approached with the understanding that ESG is an investment metric and tool for analysing risk, it can be easy to generalise to the point that ESG is instead viewed as a sustainability metric or simply another name for sustainability itself. This is particularly true when companies focus on the “E” part of ESG. It’s popular across multiple industries and wins the backing of key stakeholder groups. An organisation’s focus on the environment creates a natural overlap with sustainability activities. Avoiding confusion in the future If you are in a board meeting and find yourself hovering around both topics, be sure not to hint that they’re the same with these tips: Remember that ESG is a collection of metrics; sustainability is a principle; If you’re talking about ESG, you will likely end up talking about numbers, quantities, reporting and investment opportunities. If you’re talking about sustainability, it’s expected more in the context of organisational goals, culture and policies; and Sustainability, in many respects, is the end goal. ESG is a pathway and a framework that will allow you to get there. Dan Byrne is a writer with the Corporate Governance Institute

As artificial intelligence and hybrid working reshape roles, accountants must begin to embrace IT, analytics and real-time data. Mark Lam explains why Bean counters, excel spreadsheets, sums and calculators – just some of the stereotypes and imagery that are associated with accountants. In 1955, General Electric began to use computers to perform accounting functions, and in 1978, VisiCalc, the first spreadsheet software allowing financial modelling, was developed. Since then, technology has continued to evolve and become more complex and central to the role of the accountant. A worker is only as good as the tools they are given to complete the tasks at hand and accountants are no different. Spreadsheet software itself revolutionised the profession, turning a “20-hour per week bookkeeping chore into a few minutes of data entry”. We have been seeing a more recent new shift in the profession in the past decade and this has been exacerbated in the years since the COVID-19 pandemic with the rise of hybrid working and artificial intelligence (AI). Technology has clearly advanced since the introduction of that first spreadsheet, with developments in computer systems and software connecting each function of the business to a single Enterprise Resource Planning (ERP) system. Just like in the 1970s, accountants are going to need more IT skills in order to stay competitive in the current market. New roles for accountants have emerged, such as the project accountant, financial system accountant, system accountant or data accountant. All are technically the same role, requiring high levels of IT systems and process knowledge­ and functioning as the intermediary between the IT and financial functions of businesses.   Future skill requirements As digital transformation is becoming more of a hot topic, companies are seeking continued improvements in efficiency combined with the need for real-time data causing businesses to increase data collection and connectivity between business processes. ERP systems providing the solutions to these needs offer just one part of the answer. Business leaders increasingly want accurate real-time data and information to aid decision-making. Accountants are required, not only to understand how the systems work, but also produce meaningful reports for bosses. Employees who understand how these systems work can build processes around them and extract and present the relevant information to help management leverage ERP systems to best effect. To stay ahead of the curve, businesses need to consider the future skill requirements of their financial teams, just as accountancy bodies will have to consider the curriculum provided to trainees to meet those needs. Businesses that take on trainees may start to consider taking on those who come from an IT background instead of accountancy, for example. Accountancy firms should be able to train accountants but can’t train computer programmers, after all. It may be more important to have new skills at the organisation’s disposal rather than more traditional accountancy functions. Accountants have always been more than just bean counters, but now this stereotype is becoming a distant memory. Mark Lam is H&W Group Financial Reporting Manager at Vhi and Chartered Accountants Ireland Technology Committee Member The Chartered Accountants Ireland Technology Conference will aim to inform members about this change, to allow us to bravely step into the world of digital transformation having learned from our peers and industry experts. Industry leaders such as Microsoft and Sage will present on the best practice around digital transformation at the conference and there will be case studies from fellow accountants detailing their digital transformation journey and lessons learned. Sign up now.

Real-Time PAYE has supported five years of streamlined tax compliance, but employers face expanding reporting demands in 2024. Olive O’Donoghue outlines key deadlines and requirements in 2024 Real-Time PAYE has been up and running for five years and many will agree that the real-time system has introduced tax compliance efficiencies for employers and employees alike. Employers still have significant reporting obligations that fall outside of the Real-Time PAYE, however. Further, the scope of real-time reporting is expanding with the introduction of Enhanced Reporting Requirements and there is an obligation for employers to operate PAYE on the exercise of stock options from the start of 2024. Below we outline key reporting deadlines and obligations employers need to put in this year’s calendar for timely action. 2023 Employer SARP return – February 2024 The deadline for employers to file a 2023 Employer SARP return is 23 February. The Special Assignee Relief Programme (SARP) provides personal income tax savings of up to 12 percent for employees who relocate to Ireland and meet certain conditions for up to five years. The return covers both local employees and expats and requires details of earnings and the value of the SARP deduction provided through payroll per employee. It also requires details of tax-free items, such as flights or school fees, which may not be readily available in the payroll data. Employers should factor in the time it takes to collate off-payroll information and information on employees who have relocated to other jurisdictions. It is essential to have a solid process for the timely collection of accurate information to avoid or minimise follow-up queries from Revenue. 2023 Employer Share Award Returns – March 2024 Employers are obligated to report details relating to various forms of share-based remuneration provided to employees in 2023 by 31 March this year. This includes all Revenue-approved schemes but also unapproved stock options, restricted stock units and various other direct share awards. Several different returns exist, so it is important for employers to report the right details on the right return. All matters relating to unapproved share options are reported in Form RSS1. However, the return with the widest application for employers is the Employer Share Award (ESA) return. The ESA is a catch-all return and covers all forms of share-based remuneration, including awards that are cash-settled and not specifically reportable on other share returns. Specific returns then exist for KEEP, an Approved Profit Share Scheme (APSS), and a save-as-you-earn (SAYE) scheme. Failure to comply with this mandatory filing obligation can result in a financial penalty for employers, so a timely review of share plans and cash-based incentive arrangements is crucial to determine if the employer has a reporting obligation. Enhanced Employer Reporting from 1 January 2024 2024 heralds the rollout of the Enhanced Reporting Requirements (ERR) which places an obligation on employers to file an additional electronic return with Revenue on or before any payment or reimbursement of in-scope reportable benefits to an employee. Reportable benefits include the remote working daily allowance of €3.20, certain categories of travel and subsistence payments, including vouched and unvouched payments, and benefits covered by the small benefits exemption. ERR will enable Revenue to undertake more targeted PAYE reviews into certain expenses and benefits provided to employees. Revenue has stated that it will not operate a compliance program or apply penalties for non-compliance with ERR until 30 June 2024. While employers must comply with ERR from 1 January 2024, they should use the respite period to the end of June to continue to review and align expense systems to establish a robust process for managing ERR. PAYE on stock options from 1 January 2024 Another significant change from the start of this year is the introduction of the requirement to operate PAYE when an employee exercises a stock option. This represents a significant shift from the previous tax collection system whereby income tax, USC and PRSI payable on stock options were settled by the employee directly with Revenue within 30 days of exercise. While the move to PAYE on the exercise of stock options will be welcomed by employees as it removes their obligation to settle their taxes, significant challenges may arise for employers who will be required to gather the necessary data to report the stock option gains via the payroll on a real-time basis. PAYE must be operated even where an option is exercised by a former employee, for example. This can give rise to practical challenges related to timing and the ability of the employer to collect taxes from the individual. Employers may also face challenges operating PAYE on stock options exercised by cross-border employees who worked in different countries throughout the vesting period. Employers will need to have access to accurate travel data to enable them to correctly determine the portion of any option gain that is taxable in Ireland. Olive O’Donoghue is a Tax Partner with KPMG’s People Services tax practice 

Do boards truly understand the risks and opportunities AI presents? Ryan McCarthy explains why many are ill-prepared for this game-changing technology There can be no doubt that the era of artificial intelligence (AI) has arrived. Barely more than a year since ChatGPT landed with a bang, investment has poured into the sector. Google has launched its Gemini system and Elon Musk’s X has introduced Grok, an AI modelled on the Hitchhiker’s Guide to the Galaxy. Spurred by the proliferation of AI tools in the EU, the European Council and Parliament have reached provisional agreement on the world’s first comprehensive AI law. Given all this, you might expect that AI must surely be on the agenda at every board meeting. This is not quite the case, however. We’re not yet seeing AI discussed around boardroom tables in any meaningful way. When it is discussed, it is generally with very little depth. This needs to change. Every board member must take it upon themselves to understand the issues and implications of AI now and in the future – don’t leave it to someone else. Threat and opportunity On the occasions AI does come up at board meetings, the discussion invariably turns to the emerging threat or risks it may pose. What hasn’t been discussed yet are the business opportunities it may also present. AI tends to be viewed as an external factor that could affect an organisation rather than an operational item to be examined from the inside. Thematically, we are seeing continued focus on AI as a broad, external and conceptual threat. Board room discussion remains very much at the surface level. Risk: rules vs principles Boards have become focused on risk primarily from a corporate governance, rather than a practical, point of view. The risk section in a typical annual report is getting thicker and thicker – not without reason, but it can contain a lot of ‘cookie-cutter’ risks: cyber-attacks, supply chain challenges and climate change, for example – and now, AI. There has been a steady drift over time towards rules rather than principles. People ask whether the risk is written down and documented, as opposed to asking, ‘What’s really going to sink the ship?’ You rarely find a strong example of a business identifying a risk that is clearly explained alongside an outline of how it has been contained or overcome. Advising the experts So, if boardroom discussions about AI are still only skin-deep, what will move it onto the business agenda? You have to look at modern governance structure, which involves companies drawing on specialists in areas including audit, risk, nomination/remuneration matters and, more recently, sustainability. Some companies, particularly in the US, have created the dedicated role of Chief AI Officer. There may be a gap for a technology or ‘emerging tech’ committee at board level. There are already requirements regarding the correct number of financial experts needed on a board. Should every board now also have technology experts? Diversity behind the boardroom door This leads to a broader point: given the close correlation between youth and emerging technology, does the typical top-level boardroom have the right demographic to deal with AI? We have come a long way in terms of boardroom diversity, but there is another layer to diversity that is exposed here: do we have young people?  Do boards have people from different educational and skill backgrounds, particularly when it comes to technology and innovation? I would say that many don’t. Outside the boardroom, a company’s executive – including the HR function – should also be getting to grips with AI. If something like the AI opportunity is not coming up through the organisation to the board level, then you’ve probably got to ask whether you have an executive that is tuned in. In the same way you need day-to-day skills to fully embrace environmental, social and governance requirements, do you have the right skills for AI? The workforce question What I haven’t yet discussed with any client is the opportunity AI could potentially present for the workforce. Part of the reason is that we haven’t yet fully figured out use cases. It looks as if these use cases will become more apparent in 2024 and beyond. One Dublin hospital has begun using AI to assess radiology scans, for example, while the National Weather Service has an academic collaboration in place to explore the use of AI and data science in weather and climate services.  The medical profession is producing more and more diagnostic information yet there is a worldwide shortage of people to review it. Could AI provide a possible solution? Companies with large customer service operations have been through the cycle of using onshore customer service teams to moving some elements offshore and then introducing bots or some combination of all three. Could AI provide a better option? Curiosity is key I expect AI to feature more prominently in boardroom discussions in the future. The best board members – and by extension, the best boards – have an innate curiosity. Right now, there are two things in the world we should be curious about now: one is geopolitics, and the other is technology – more specifically, AI. If you sit on a board and you’re not curious about these two things and their potential impact on your business, you may be in trouble. Ryan McCarthy is Audit Partner and Board Leadership Centre Lead at KPMG

As finance leaders grapple with the Corporate Sustainability Reporting Directive and its complex demands, IT collaboration will become increasingly important, writes David Codd Finance Directors and Financial Controllers are working hard to understand the implications of the Corporate Sustainability Reporting Directive (CSRD) and to put the necessary reporting in place in their businesses. But their colleagues in IT also have a vital part to play. This is an unusual challenge for IT, and it’s important to consider how to collaborate effectively. What are the pitfalls to avoid? And how can you build a strong partnership to deliver your sustainability reporting programme? The CSRD, finance teams and IT The CSRD will expand sustainability reporting which will become mandatory for publicly listed companies (plcs) in 2025 for 2024 performance and a year later for all large companies. Finance teams are now performing double materiality assessments and assessing what new measures and information will be required. However, the underlying data itself must be identified and sourced, its reliability established, and processes put in place to extract and interpret the data and report accurately on an ongoing basis. This has the potential to become very onerous. IT support will be critical to an effective and efficient process, i.e. high-quality reporting with minimum manual intervention. An unusual IT challenge This is an unusual challenge for IT departments for various reasons: The scope is exceptionally broad The activities that impact the environment are conducted across an organisation’s operations and – for Scope 3 emissions – through multiple steps in the supply chain. So, the systems and datasets your IT colleagues will have to work with are unusually disparate and will even fall outside the boundaries of the technology estate they control. The standards are still being rolled out IT project managers like clear definitions at the start of a project. However, the first sustainability reporting standards have only recently been released, and the taxonomy for digital reporting is a work in progress. Plus, the “limited assurance” concept will give rise to different interpretations of the quality of the audit trail needed. This is a big project without a conventional monetary business case Chief Information Officers usually have many more attractive-sounding initiatives in the pipeline than they can deliver at once. So, they work with their finance and functional colleagues to prioritise, and resources are allocated based on financial payback or loss avoidance. Your CSRD-driven reporting programme does not neatly fit these criteria.      How to manage risks There are several risks when working with an IT team on sustainability reporting. Confused responsibilities You usually work with a financial systems team, but IT business partners for supply chain or manufacturing operations will already have been partnering with sustainability managers to develop scorecards. Muddled ownership and communications can result in lost time. In a large business, reporting is a full-blown programme consisting of several streams. It needs experienced management to coordinate it and manage the relationship with you. I would also recommend that accountability for IT delivery sits with the head of financial systems, and the IT project manager should sit on the team. This keeps the ownership and lines of communication as simple as possible. Your IT team can’t resource the project Since the 2000s, IT resource has shifted from enterprise systems to ecommerce, data analytics and security. Enterprise resource planning systems teams have been staffed to make incremental changes on the basis that resources can be contracted in as needed. However, consulting firms are now experiencing heavy demand for their sustainability reporting expertise as deadlines approach. The work should be scoped out with IT as early as possible. Most of the scope can be clarified now. Finance and IT should accept that adjustments will be needed, but it’s wise to use resources now and make progress. In this case, perfect is the enemy of good. Motivation The tech community loves stimulating work – through either buying into a goal or working with innovative technology (and preferably both). You need enthusiastic professionals volunteering for this project, but you’re competing with exciting fields such as artificial intelligence and the possibility of going to other employers. The people you need have lots of options. Be aware of the nuanced differences between finance and tech culture and accept that you’re competing for talent. Reach out to the IT community in your business, explain that CSRD prevents greenwashing and that high-quality reporting is a noble undertaking that will help your business to show the world what you’re doing. True partnership is key Recognise the significant challenge presented for both IT and finance by the imperative to develop a quality, efficient sustainability reporting process at pace. A true partnership between finance and IT is the key to successful reporting. David Codd is a Non Executive Director and Strategy and Transformation Consultant