At the time of writing, efforts to contain the spread of coronavirus are undoubtedly the focus of attention for society and business across the island. This is a very serious and fast-evolving situation, and Chartered Accountants Ireland will adhere to the official advice provided by our respective health services and governments. The safety and health of our members, students and staff are paramount, and that principle guides the decisions taken. The Institute is reviewing its programme of activities in respect of members, students and external stakeholders. We will be in contact with everyone concerned to advise them of all decisions made. I would like to take this opportunity to commend businesses across the island for their responsible attitude to their employees and customers in following official guidelines. Such decisive action will, we hope, effectively curtail the spread of the virus. Paschal Donohoe T.D. At the start of March, we were honoured to host Minister for Finance, Public Expenditure and Reform, Paschal Donohoe T.D., who addressed an invited audience of Institute members and guests. Inevitably, coronavirus featured prominently with the Minister predicting that the Irish economy would be impacted by the global slowdown associated with the outbreak. He said: “Many, including the OECD, outline that this outbreak has the potential to slow global growth to its lowest rate since the financial crisis just over a decade ago. To what extent, it is too early to say, but it follows that weaker growth will affect our short-term outlook and my department will update its projects in April”. Turning to Brexit, the Minister argued that while the post-Brexit world will present significant challenges, if managed correctly, Ireland’s reputation as an open, adaptable yet stable economy also presents opportunities.  Engagement with US members and politicians At the time of writing, the Institute’s Director of Advocacy & Voice, Dr Brian Keegan, and myself are currently meeting with members and politicians in the USA. The programme has involved meetings in New York with Northern Ireland Economy Minister, Diane Dodds, and Consul General of Ireland, Ciarán Madden, before moving on to Washington DC for various events including the Irish Business Leaders’ Lunch, the Irish Funds dinner and the NI Bureau breakfast. Throughout the visit, we have had a very warm welcome from members based in the US and some really useful engagement with political representatives from both sides of the Atlantic. Institute signs climate change pledge In February, our Institute announced that it is one of 14 accounting bodies worldwide to become signatories to a call to action on climate change issued by Accounting for Sustainability (A4S). The memorandum of understanding signed by Chartered Accountants Ireland states that signatories will commit to providing the training and infrastructure that accountants need, as well as supporting initiatives and providing the necessary evidence to take action on climate change. In signing the memorandum, Chartered Accountants Ireland recognises that climate change is an economic, social and business risk and that accountants must take action collectively as a profession and individually as professionals working in the public interest. The 14 accounting bodies signed up to the agreement represent a total of 2.5 million accountants and students worldwide. Annual Dinner Finally, this is my first comment section since our Annual Dinner at the end of January. I would like to record my thanks to the 900 guests who supported the event; to our event partners Dublin Airport, Bank of Ireland, PeopleSource and Toyota; to our special guest, Lochlann Quinn FCA; and, most particularly, to the many corporates who supported the event by hosting tables. For me, it was another great demonstration of how Chartered Accountants are at the heart of our economy, driving Irish business. Conall O’Halloran President 

Apr 01, 2020

Economic forecasting can be a difficult business, especially when you consider the ‘unknown uncertainties’ the world is currently facing, writes Annette Hughes.  Businesses do not like uncertainty but, at present, that is the prevailing economic theme. An uncertain political situation, ongoing Brexit negotiations and the recent coronavirus outbreak remind us how vulnerable the economy can be to external shocks. Those in the business of economic forecasting understand this vulnerability very well. The purpose of an economic forecast is to measure the impact of ‘known uncertainties’ on future economic performance, but the future is unpredictable and this is further complicated by the ‘unknown uncertainties’ we now face.  Economists, in making their projections for economic growth in 2020, would not have been aware of the coronavirus outbreak until the first reports of a cluster of cases were identified on 31 December 2019 in Wuhan, China. The rapid and continuing escalation of COVID-19 has led economists to revise their economic forecasts downwards, as the initial output contractions in China begin to be felt around the world. It remains unclear what the full effects will be on the movement of people and goods, and economic activity, while the response of policymakers is evolving on a daily basis. Global economy In early March, the OECD reported on the considerable human suffering and major economic disruption that had resulted from COVID-19. OECD global growth in 2020 was revised downwards, by around 0.5 percentage points to 2.4%, from an already weak forecast of 2.9%. The adverse impacts on confidence, financial markets, the travel sector and disruptions to supply chains were all factors contributing to the downward revision. However, without knowledge of the full impact of the virus, the OECD acknowledged that, should the outbreak be more intense and last longer than predicted, global growth could drop to 1.5%. Economists at Oxford Economics believe that the virus will result in Q1 2020 being the first global contraction since Q1 2009, with overall growth of 2% for the year, the slowest pace in the last decade. Irish economy The OECD forecast for economic growth in the euro area was revised downwards by 0.3 percentage points to 0.8% in 2020, although, given that the spread to Europe did not materialise until February, this forecast is likely to be subject to further downside risks.  Ireland has an open economy reliant on international trade and global markets to support economic growth. Ireland and its economy accounts for just 0.4% of global GDP and 0.06% of the world’s population. However, it still remains vulnerable to the impact of the COVID-19 virus.  Economic growth in Ireland will definitely be weaker than projected should the virus spread for an extended period. The main impacts are likely to be felt through supply chain disruptions, travel and tourism restrictions, and reduced mobility (affecting consumer spending and workers staying at home). There have already been reports of delays in the delivery of imported products in the construction sector, according to the Ulster Bank Construction Confidence Index. It has been acknowledged that Ireland will likely follow a pattern seen in other European countries and the Taoiseach’s measures to minimise the spread of COVID-19 could be significant, but much less than the economic and social consequences of acting too late. The flexibility that Irish businesses have demonstrated in dealing with evolving economic, political and social trends are acknowledged in EY’s February 2020 Economic Eye. EY Chief Economist, Neil Gibson, correctly pointed to the coronavirus outbreak as likely to damage global growth in 2020, but as a rapidly evolving situation, it is difficult to predict the full economic impact on the island of Ireland. The closure of many public institutions and private businesses in the Republic of Ireland will no doubt further slow growth across the island, but the sectoral and regional impact will vary greatly. It important to remember, however, that this is first and foremost a human crisis, and we must think about people first. Moving away from GDP numbers, we must look at what business, governments and individuals can do together to help get us get through this incredibly difficult period.  Clearly, these are unprecedented times and taking such developments into account makes economic forecasting a difficult business.   Annette Hughes is a Director at EY-DKM Economic Advisory.

Apr 01, 2020

With advice comes responsibility as almost all advice has consequences, writes Des Peelo. As a Chartered Accountant, whether in professional or commercial life, our qualification is relied on by others for knowledge and experience when we provide advice. Advice brings responsibility, as almost all advice has consequences. A course of action undertaken, an investment made, a decision taken, a matter rectified, a risk addressed, and so on. The accountant can sometimes be unaware that somebody has interpreted a comment or course of action as advice. Even responding to a casual enquiry can be an everyday hazard in a complicated and regulatory world. Letter of engagement I, in common with other professional advisers, have experienced clients or circumstances where it is later claimed that advice was wrong or inadequate. Thankfully, none developed into legal claims – though I have acted as an expert witness in many such cases. Common factors in these claims included allegations that the client subsequently raised an issue that was not within the original remit, or did not take the advice, or varied its implementation to suit a different purpose. It may not always be possible in everyday commercial situations, but it is invariably wise to have a clear letter of engagement (LOE) signed as accepted by the client in advance of undertaking the work. The real relevance is that the LOE can avoid any later claim of misunderstanding or ambiguity. The LOE can also state in advance what is to be excluded in the advice, as explained below. Create clarity In my experience, it is increasingly necessary to ensure that the recipient understands what the advice is not, as well as what it is. For example, that it is not legal advice, that it is not tax advice as may arise, or that the advice cannot be taken as reassurance to a third party (such as a bank or fellow investors) as to the standing or validity of the circumstances relating to the advice. The advice is for the recipient alone, and there is no responsibility to third parties. The subsequent written advice to the client may then state: “This advice is provided in accordance with the signed letter of engagement (LOE), dated 1 April 2020. For good order, a copy of the LOE is attached to this letter”. Chinese walls Experience suggests that most professional indemnity claims for negligence arise through allegations of omission. In other words, some aspect was overlooked or understated by the adviser and should have been appropriately addressed. This, of course, enters into the grey area of opinion of which there is little legal definition beyond a simplistic analysis as to what your peer group would have done in the circumstances. In the ordinary course of events, a Chartered Accountant is unlikely to face a conflict of interest in giving advice – although a wary eye is necessary for Ireland’s relatively small business network. Others may, however, experience conflicts of interest in a different way, as explained by a straight-faced story from the rarefied world of high art dealings. In a frank memoir, a retired director of a major auction house in London explained  ‘Chinese walls’ as follows: on one side of the auction house, the potential seller of a painting is reassured as to this being the best time to sell a painting. On the other side, in the same auction house, the potential purchaser is reassured as to the wisdom of investing to future advantage in the same painting. Be brave Good advice is always worth it, but the advice might be unexpected. A senior politician, for example, battered by the vagaries of the world, remarked to me that if you are ‘being an eejit’, the best advice sometimes comes when the adviser tells you so in plain terms. And how much should one charge for all this great advice? A wise PR lady, not entirely tongue-in-cheek, once told me that advice should always be reassuringly expensive. Des Peelo FCA is the author of The Valuation of Businesses and Shares, which is published by Chartered Accountants Ireland and now in its second edition.

Apr 01, 2020

Joan Curry, who recently joined the first female majority board of IFAC, discusses her varied career in the public sector. Joan Curry is Head of Finance at the Department of Transport, Tourism & Sport; ex-chair of the Chartered Accountants Ireland Public Sector Interest Group; member of Council at Chartered Accountants Ireland; and a board member of the International Federation of Accountants. Add to that six children and a keen golfing interest, and one could reasonably say that Joan leads a hectic life. In terms of her professional career, Joan had an interest in figures and accountancy from an early age. “I was the eldest of five children, and my mother and father both worked outside the home,” she recalled. “We swam and my father was treasurer of the swimming club. I helped him with the money, so it was a subliminal introduction really.” At school, Joan and three friends were the first pupils of Mercy College in Coolock to do higher-level maths. “It didn’t occur to us that we were trailblazers or anything like that,” she said. We just did what we did. I got an honour in maths in the Leaving Cert, so I suppose I always had a head for figures.” No college fun Joan planned to do a commerce degree in university when fate took a hand. “My brother’s football coach was an accountant and he called to the house one evening and convinced me to become a Chartered Accountant by working for an accountancy firm,” Joan said. “I took that advice and qualified with Smith Lawlor & Co., now JPA Brenson Lawlor in 1988.” Joan completed her training contract and qualified in 1988 when she moved into industry with Nokia with a desire to gain commercial experience. Nokia was a tissue paper manufacturer, and Kittensoft was its major brand. The company was a big player in the Irish retail FMCG scene at that time. As a financial accountant, Joan was responsible for budget and financial management including the preparation of accounts for consolidation into the European group headquarters and, subsequently, for the United States when it became part of the James River and Georgia Pacific corporations. Looking back, Joan reflected: “In practice, you are engaging with clients annually. There is more continuity in industry; you are part of decisions and can see their cause and effect and results.” It wasn’t all work in Nokia, however. Joan made up for the lack of fun at college as she met her husband in Nokia. “I married the site engineer after he left the company,” she said. A wide and varied career Joan has spent the past 18 years in the civil service in several roles that have broadened her capacities. She gained extensive experience in multi-disciplinary environments and brings all of that to bear in her current financial role with the Department of Transport, Tourism & Sport. Joan’s career in the public sector began with a contract role as a project accountant for the Department of Finance, as it implemented the JD Edwards financial management system. This was later extended into a contract of indefinite duration. In 2011, Joan moved to the Department of Public Expenditure & Reform on its formation to work in the Government Accounting unit, the standard-setter for government accounts in Ireland. There, she built relationships with colleagues in both finance and internal audit in each government department. Joan also spent three years as Head of Corporate Services for the National Shared Services Office. A role that Joan particularly enjoyed while working in the Department of Public Expenditure & Reform was a secondment as Secretary to the Public Service Pay Commission. This was a non-financial role, utterly different to anything she had done before, and involved supporting the Commission in its examination of recruitment and retention matters in specific areas of the public service. Joan managed the research, contribution and report-writing phases of the Commission’s work and engaged with the public sector employer, union and other stakeholders in the process. Current role Joan joined the Department of Transport, Tourism and Sport as Head of Finance in August 2019 and her role covers “vote and expenditure management, financial management, risk management, and responsibility for the procurement framework”. The use of the term “vote” serves to highlight the differences between the public sector and private sector accounting practices. This refers to the financial allocation made to a department or public body by the government, which is approved by a vote of the Oireachtas. The differences run deeper than mere terminology, however. The State doesn’t utilise private sector financial reporting standards, nor does it prepare its accounts on an accrual basis. Joan is a firm believer that the State’s move to re-examine this area and consider the use of accrual accounting is the right one. A change in policy here would be consistent with OECD guidance on the matter Joan stressed. Joan reflects that, in contrast to government accounting, local authorities have been engaged in an advanced form of accrual accounting since 2002. They prepare their accounts in accordance with an accounting code of practice, which complies with FRS102 where applicable. The Department of Transport, Tourism and Sport has an oversight role in various bodies under its aegis and at times, Joan’s expertise is called on by departmental colleagues directly involved in the oversight function. “It extends into the transport sector – public transport, roads, local authorities, and then we have the tourism industry and Fáilte Ireland and Tourism Ireland and the breadth of activity they are involved in to attract tourists. It goes right down to sport and grants to local clubs. I didn’t realise the breadth of services involved until I started working in the department.” And unsurprisingly, there is no such thing as a typical workday for Joan. “There is a huge variety on any given day,” she said. “I try to look at it in its different compartments – vote management, financial management, risk management, and procurement. Those are the four key areas I try to interface with every day.” At the time of writing, the COVID-19 pandemic was taking up much of Joan’s time. “We have been engaged in emergency planning and contingency planning and arranging for staff to work remotely and so on. The staff here have been really fantastic,” Joan said.  Joan is also working daily with critical stakeholders on liquidity funding strategies to keep key transport systems and supply chains going – getting people and goods to where they are needed in light of COVID-19. Volunteer work Joan is a Fellow of the Institute and a Member of Council at Chartered Accountants Ireland. She is also a member and former Chair of the Public Sector Interest Group and recently became a member of the International Federation of Accountants (IFAC). Joan describes her initial introduction to the Institute’s Council as the result of ‘a tap on the shoulder’. “I was approached to run for Council and I agreed. It all goes back to networks. I play in the Chartered Accountants Golf Society and have made some great contacts there. Within an hour of seeking nominations, I had ten nominations and I only needed seven.” Joan’s next step came when she was asked to go forward for the IFAC board. “I was nominated by Chartered Accountants Ireland and was short-listed. I went for the interview and was fortunate enough to be invited to join the board. Being there for Ireland is an immense honour, and being able to contribute that public service perspective is also very important to me.” The 23-member board includes 12 males and 13 females. “It’s gender-balanced, and the overall diversity is great,” she said. “I have four girls and two boys, and I have always stressed to them the importance of equality.” Life outside the office In Joan’s view, one of the best things about working in the public service is the scope offered to do other things. “The support I have received over the years has been invaluable,” she said. “I got better at managing my time and learned that I don’t need to be involved in everything that’s going on. I have improved at delegating and saying no. I have also learned that the time you spend on yourself is good for you and your employer. If you’re not feeling good, you won’t perform at your best.” When her children – Aisling, Ciara, Dearbhla, Shane, Sonia and Karl – are not keeping Joan busy with various college, school and extracurricular activities, she can be found on the golf course. “It’s the perfect place for headspace for me,” she concludes. “And a little competition as well!”

Apr 01, 2020

Eimear McGrath explores some of the key impacts of the European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019 and asks to what extent they will widen the financial reporting and filing obligations for partnerships. Signed into law at the end of November 2019, the European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019 (S.I. No. 597/2019) (the 2019 Regulations) came into operation on 1 January 2020. The effect of these Regulations is to bring the statutory financial reporting and filing obligations of certain “qualifying partnerships” more in line with those of companies formed and registered under the Companies Act 2014 (the 2014 Act), the main aspect being the requirement for qualifying partnerships to file and make public their financial statements. This article explores some of the key impacts of these Regulations on such qualifying partnerships in respect of their financial reporting and filing obligations. It may be of particular interest to professionals that organise their business as a partnership. What were the financial reporting and filing obligations of partnerships until now (under the 1993 Regulations)? Prior to the commencement of the 2019 Regulations, the European Communities (Accounts) Regulations 1993 (as amended) (the 1993 Regulations) set out the scope of partnerships that were subject to requirements for the preparation, audit and filing of financial statements that were generally equivalent to those applying to companies under the 2014 Act. In summary, the requirements of the 1993 Regulations applied to any partnership (both general partnerships established under the Partnership Act 1890 and limited partnerships established under the Limited Partnerships Act 1907), all of whose partners – and, in the case of a limited partnership, all of whose general partners – were limited corporate bodies or other entities whose liability was limited. It also required that such partners or general partners that were limited corporate bodies, or other entities whose liability was limited, were registered in an EU member state. Therefore, for example, such partnerships using limited companies registered in the Isle of Man or the Channel Islands did not have to file their financial statements. These 1993 Regulations are revoked by the 2019 Regulations, except to the extent that they relate to the financial years of a “qualifying partnership” commencing before 1 January 2020. What is a qualifying partnership under the 2019 Regulations? The 2019 Regulations introduce a new definition for a “qualifying partnership”, which is set out in Regulation 5. The definition does not ultimately change the previous requirement in the 1993 Regulations of bringing certain partnerships whose members enjoy the protection of limited liability into scope for the preparation, audit and filing of financial statements. However, it does extend the definition in the 1993 Regulations and has been reworded to address the other entity types as defined in the 2014 Act. It incorporates partnerships (both general, established under the Partnership Act 1890 and limited, established under the Limited Partnerships Act 1907), all of whose partners and, in the case of a limited partnership, all of whose general partners, are: limited companies; designated unlimited companies (designated ULCs); partnerships other than limited partnerships, all of the members of which are limited companies or designated ULCs; limited partnerships, all of the general partners of which are limited companies or designated ULCs; or partnerships including limited partnerships, the direct or indirect members of which include any combination of undertakings referred to above, such that the ultimate beneficial owners of the partnership enjoy the protection of limited liability. Regulation 5(2) also further extends the above list to include any Irish or foreign undertaking that is comparable to such a limited company, designated ULC, partnership or limited partnership. However, the reference to such foreign undertakings having to be registered in an EU member state has been removed. It is worth explaining some of this in further detail. A limited company is any company or body corporate whose members’ liability is limited. Designated ULCs are defined in Section 1274 of the 2014 Act and include, amongst other entity types, unlimited companies that have a limited liability parent. Such designated ULCs are not exempt from the requirement to file financial statements with their annual return. In considering whether an undertaking is “comparable”, Regulation 5(3) sets out certain guiding principles that would suggest comparability while Regulation 5(6) states that in making the assessment, regard should be had to whether the liability of persons holding shares in the undertaking is limited. The reference to shares is cross-referenced to Section 275(3) of the 2014 Act, which sets out the interpretation of the meaning of “shares” and mentions that, in the case of an entity without share capital, the reference to shares is to be interpreted as a reference to a right to share in the profits of the entity. Regulation 5(5) defines “ultimate beneficial owner” as meaning “the natural person or persons who ultimately own or control, directly or indirectly, the partnership or undertaking”. The concept of “ultimate beneficial owner” is also referred to in Section 1274 of the 2014 Act, which provides that certain designated ULCs must prepare and file statutory financial statements with their annual return. The types of entities that fall under the definition of a designated ULC in Section 1274 are clearly set out and the definition specifically includes a guiding principle whereby if the ULC’s ultimate beneficial owners enjoy the protection of limited liability, they will fall under the definition of a designated ULC. There is, however, no definition of “ultimate beneficial owner” provided for in the 2014 Act. It has generally been interpreted to incorporate not only natural persons, but also orphan entities that directly or indirectly enjoy the benefits of ownership. It is clear from the definition in the 2019 Regulations that the “ultimate beneficial owner” must be a natural person. Whether the definition of “ultimate beneficial owner” in the 2019 Regulations carries through to the interpretation of “ultimate beneficial owner” in Section 1274 of the 2014 Act in the context of ULCs will need to be further considered. What are the consequences of being a qualifying partnership in respect of financial reporting and annual return filing obligations? Qualifying partnerships will apply Part 6 of the 2014 Act, which addresses the accompanying documentation, including financial statements, required to be annexed to the annual return. Existing partnerships that fall within the scope of the 1993 Regulations have generally been required to meet such obligations. However, the extension of the definition of qualifying partnerships means that many more partnerships (such as those using limited companies registered in a non-EEA member state, for example) will now be required to file financial statements and make them publicly available. The application of Part 6 of the 2014 Act to qualifying partnerships is addressed in Part 4 of the 2019 Regulations. The general principle of the 2019 Regulations, as stated in Regulation 7, is to apply Part 6 of the 2014 Act to a qualifying partnership as if they were a company formed and registered under that Act, subject of course to any modifications necessary to take account of the fact that the qualifying partnership is unincorporated. Part 4 further goes on to modify or dis-apply certain provisions of Part 6 of the 2014 Act for qualifying partnerships. Some notable modifications and dis-applications are discussed below. Interpretation of terms Regulation 8 outlines certain terms in Part 6 of the 2014 Act pertaining to “companies” that should be construed differently for the purposes of qualifying partnerships. Where Part 6 of the 2014 Act refers to the directors, secretary or officers of a company, it should be construed as a reference to members of a qualifying partnership (i.e. in the case of a partnership, its partners and in the case of a limited partnership, its general partners). Any duties, obligations or discretion imposed on, or granted to, such directors or the secretary of a company should be construed as being imposed on, or granted to, members of the qualifying partnership. Where such duties, obligations etc. are imposed on, or granted to, such directors and the secretary jointly, they shall be deemed to be imposed on, or granted to (i) two members of the qualifying partnership, where it is not a limited partnership; and (ii) in the case of limited partnerships, if there is only one general partner, that partner; or if there is more than one general partner, two such partners. References to the “directors’ report” of a company should be construed as references to the “partners’ report” of a qualifying partnership, unless otherwise provided. The date of a company’s incorporation will be construed as the date on which the qualifying partnership was formed. Any action that is to be, or may be, carried out at a general meeting of the company will be deemed to be any action that is to be, or may be, carried out at a meeting of the partners, or otherwise as determined in accordance with the partnership agreement. Dis-application of certain provisions in Part 6 of the 2014 Act in respect of financial statements The 2019 Regulations dis-apply certain provisions that are contained in Part 6 of the 2014 Act to the financial statements of qualifying partnerships. Amongst these are: the general obligation to maintain and keep adequate accounting records and the statement in the directors’ report pertaining thereto; and the requirement for Companies Act financial statements to comply with applicable accounting standards, to provide a statement of such compliance, and to disclose information in relation to departures from such standards. In reality, these dis-applications arise as a result of a legal technical issue. Regulations brought into law by virtue of a Statutory Instrument are often used to implement EU Directives. Such Statutory Instruments may not include provisions that do not form part of the underlying EU Directive. The purpose of the 2019 Regulations is to give further effect to Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings (the 2013 EU Accounting Directive). The general obligation to maintain and keep adequate accounting records and the requirement for Companies Act financial statements to comply with applicable accounting standards did not derive directly from that 2013 EU Accounting Directive. However, since qualifying partnerships are required to prepare statutory financial statements that give a true and fair view, it stands to reason that they will need to maintain adequate accounting records to support the preparation of such financial statements, and will also need to comply with applicable accounting standards in order for the statutory financial statements to give a true and fair view. There are additional dis-applications arising from the fact that certain provisions will not apply in the case of a qualifying partnership, such as the requirement to provide details of authorised share capital, allotted share capital and movements therein, the requirement to disclose information on financial assistance for purchase of own shares, and the requirements in the directors’ report to disclose directors’ interests in shares and interim/final dividends, among other items. The relevant dis-applications and modifications are set out in detail in Part 4 of the 2019 Regulations. Application of other company law to qualifying partnerships Part 7 of the 2019 Regulations provides for the application of the European Union (Disclosure of Non-financial and Diversity Information by certain large undertakings and groups) Regulations 2017 [as amended by the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) (Amendment) Regulations 2018] to qualifying partnerships as if they were companies formed and registered under the 2014 Act. Part 6 of the 2019 Regulations also imposes the requirements of Part 26 of the 2014 Act in respect of payments made to governments on certain qualifying partnerships.  These are subject to any modifications necessary to take account of the fact that the qualifying partnership is unincorporated. Annual return filing obligations The requirements in relation to the obligation to make an annual return are set out in Regulation 21 of the 2019 Regulations, which state that the annual return of a qualifying partnership is to be in the form prescribed by the Minister for Business, Enterprise and Innovation. Qualifying partnerships will be required to submit to the Companies Registration Office (the CRO) their annual return accompanied by financial statements, and by a partners’ report and auditor’s report, where relevant, for each financial year-end. The CRO notes that the relevant form for filing the annual return is Form P1, which requires details of the partnership name and its principal place of business. The annual return form required to be filed by companies is Form B1, which requires additional information such as authorised and issued share capital, members and their shareholdings, for example. Conclusion So, what actions should members of the Institute take?  Members should familiarise themselves with the requirements of the 2019 Regulations. While this article explores some of the financial reporting and filing provisions in the Regulations, it does not touch on other aspects such as those regarding the audit of financial statements and reporting by auditors. It is clear, for example, given the extension of the definition of qualifying partnerships by the 2019 Regulations, that Institute members should check whether partnerships they are involved with, either in an employment or in an advisory capacity, will now be required to file and make public their financial statements, with effect from financial years commencing on or after 1 January 2020. Failure to comply with this, and other specified provisions of the 2014 Act will result in an offence being committed and therefore, legal or professional advice should be sought where necessary. Eimear McGrath is Associate Director at the Department of Professional Practice  in KPMG.

Apr 01, 2020

John Kennedy explains how to turn a casual chat into a steady flow of high-quality clients. A common problem that limits the success of many practices is also one of the most damaging, but happily, it is also one of the easiest to fix. In this article, I will show you how to turn an informal chat into a positive client relationship. When you master this structure, you will be able to manage any conversation so your potential clients will understand how they will benefit from working with you. The self-defeating spiral A typical self-defeating spiral causes significant damage, and it goes something like this: I don’t feel comfortable talking about myself. When I meet potential clients, I often don’t know what to say. I wish I had more clients and more high-quality clients with whom I like to work. I don’t feel successful, so I lack confidence when I talk to potential clients about my practice. For many years, I have focused on identifying what sets high achievers apart. There is overwhelming evidence that the ability to shape and structure a casual conversation is perhaps the single most crucial skill. This skill is not a result of natural talent, charisma or charm – it is a strength that is practised and learned. Successful client conversations It may seem obvious, but a fruitful conversation involves two people taking turns at listening and talking. Yet time and time again, when the pressure of wanting to make a good impression takes over, we make the same mistake. And, odds are, this has happened to you.  It is easy to fall into the trap of believing that your task is to list the many reasons why the other party should become your client. You say more and more about what you think you should tell them until you reach the point – and this can sometimes come frustratingly early – where you run out of things to say or, worse, you keep talking without feeling in control of the conversation as an unwelcome unease inside you begins to grow. Mastering this skill is easier than you think. A fruitful conversation is about listening and talking. You need to understand how to do both effectively and appreciate how each fits together. So, here is the structure of a successful client chat. 1. Prepare The first stage of the conversation takes place when you are on your own. There is no talking or listening, just thinking things through and creating an approach that works. To master the skill of turning casual chats into client contracts, you need to structure your thoughts. You need to understand how best to probe the value your potential client is seeking, the best way to present the value you can offer, and how to propose the next step in what will lead to a long-term, mutually rewarding relationship. 2. Probe The conversation begins here. This stage mostly involves listening and knowing how to guide the other party so that they talk about issues that move the discussion into ‘productive’ territory. Your main task is to keep the conversation casual, interesting to your client, and moving towards an understanding of the value they can achieve by working with you. You do this by asking high-quality questions. As you chat, gently guide the other party through a series of casual questions in a way that helps them clarify their thinking and reach a more valuable understanding of the outcome that is most important to them. The ability to do this effectively is a skill that takes time and practice. However, three fundamental questions form the bedrock of  every successful client conversation: What will success look like? How will you know if we have achieved the success you seek? What is most important to you about achieving that success? You probe your potential client’s thinking by asking these – and related – questions to help them think in a more structured way about their goals. Most clients are unclear as to what they want to achieve, so helping them identify their priorities will encourage them to talk with you more. You don’t do this by telling them how clever you are or by providing all the answers. The real skill and value lie in allowing potential clients to experience your proficiency by helping them structure and organise their thinking. When you master the skill of eliciting the most precise answers possible to these three fundamental questions, you will set yourself apart. By taking this approach, potential clients will experience the value of your expertise, and you will demonstrate that you are focused on helping them define, and then achieve, the success they seek.  These are the firmest possible foundations for a high-value client relationship. 3. Present Only now do you begin to talk more than you listen, and you keep asking questions to maintain focus on the critical issues. In this phase, your task is to help the client see how they will benefit from working with you. You may be inclined to talk about what you will do, but technical considerations are not very motivating for potential clients. Your critical task is to increase their motivation to the point where they decide to work with you. You do this by giving examples, by telling stories of how you helped others facing similar issues, and by focusing on how things will improve. This evidence is already captured in your value menu, where you prepared a store of material that will help your client feel they are in good hands. The stronger they feel about the specific value they will achieve by working with you, the more you will stand out as someone they can trust. 4. Propose In this step, you move the relationship from talk to action. By probing how the other person currently sees things, and how they would like things to be in the future, you are helping them untangle the issues and identify the outcomes about which they feel most strongly. These are the foundations of a strong, trusting relationship. At this point, you may suggest talking further – but before then, you will send a brief note indicating how you can help achieve the success they seek (this is very different to the standard ‘letter of engagement’). The purpose of the note is to confirm that you have fully understood the outcomes your client desires.  A succinct note about the value they will receive will move you from a casual, theoretical chat to a highly practical and highly focused discussion on the specific reasons you should both work together. Like a road journey at night This is likely to be very different to the path you have followed up to now. The traditional, and often ineffective, model tells you that you should outline your expertise at every opportunity; that you should see every conversation as a sales opportunity and sell from the outset. Sometimes this sales “advice” is even more aggressive with outdated jargon that speaks of “closing the deal” or trapping the potential client in the “killing zone”. This is hardly a basis on which to build a high-quality practice with the right clients and high-trust relationships. Instead, the Practice Builder approach outlines the specific steps you should take to help a potential client identify and access the value that is truly important to them. And through a well-structured conversation, you let them experience how you are an essential element in arriving at the outcome they want. It’s like taking a road journey at night. Through your questioning, you help your client identify the destination at which they wish to arrive. You then map out the route and together, you can set off on your conversational journey. You use your questions like headlights, to light up the landmarks and road signs for the next stage of the journey. The critical thing to remember is that you are in the driving seat, choosing the route, and setting the speed – but your client gets to adjust anything that makes the journey comfortable for them, such as opening the window or choosing the music. In this way, the conversation remains a comfortable and stress-free casual chat, but with a clear set of directions, milestones and a destination that you both reach by working together. This approach is fundamentally about helping your client arrive at the success they most value. When you stand out as a master at this, your client will want you on every journey. And they will want to tell all of their friends about you. This is a firm foundation on which to build a successful practice.   John Kennedy is an experienced strategic advisor who has worked with senior management teams in a range of organisations and sectors.

Apr 01, 2020

Richard Day and Alannah Comerford explain how Chartered Accountants can enhance their organisations’ data transformation capabilities using Alteryx. With the recent changes to the FAE syllabus, which now includes Tableau, Alteryx and UIPath, the new crop of qualified Chartered Accountants will bring these skills into the workplace. In this article, we will discuss the advantages of using a data processing tool such as Alteryx. The Institute has recognised the value that Alteryx provides, and the onus is now on all of us to leverage the skills and knowledge our bright new crop of young accountants will bring to the workplace. Reflect on the tasks we are required to complete regularly as part of our role as a modern-day Chartered Accountant. Many of us would find that, despite not considering ourselves to be data experts, we cleanse, filter, summarise, append and cross-reference datasets – even if we don’t think of our actions in these terms. We often turn to spreadsheets to do these data-heavy tasks. Many of us have picked up a spreadsheet which has multiple tabs, complex formulae, thousands of rows of data and found it challenging to figure out what is happening. Also, these complex transformations and calculations often have undocumented steps, can be slow to update, require manual effort to repeat, and generally could be better controlled. Alteryx is a data processing tool that facilitates data transformations and calculations in a controlled and repeatable manner and can revolutionise how we process and analyse data.  Given the user-centric design and functionality, all accountants should be able to pick up Alteryx and get started. In Alteryx, steps in a process are represented graphically in a format called a “workflow”. It should, therefore, be far easier for a colleague to view such a workflow and figure out what is happening than if they were to pick up a spreadsheet, as described above.  Repeatable data transformation Take the simple scenario where we need to carry out a task that requires information from two or more systems. We typically export information from each system into separate files and then transfer these files to tabs in a single spreadsheet to carry out the task by summarising information from one tab and looking it up in the other. In an ideal world, with fully integrated systems perfectly tailored to all of our needs, this would be possible to do automatically on the systems themselves. However, this level of integration is not a reality for most of us and as a result, we regularly spend our time on these data transformation tasks. In many cases, data manipulation often represents a significant proportion of the time taken and does not leave much time for the accountant to review and consider the results. Alteryx can help with the data transformation and processing elements of such tasks. It provides the accountant with a way to build a workflow to complete each of the required steps each time such analysis is performed. It would then be a matter of refreshing the input files as needed and running the workflow, eliminating almost all of the time associated with the transformation of the data (see Figure 1). Similarly, Alteryx offers excellent value to an accountant by cleansing the data. In a world with imperfect and unintegrated systems, there may be data quality issues as well as inconsistent data across different systems. We have become used to removing leading zeros in an account or reference number, correcting misspelt names, or translating names of customers or products, so they match across systems. Alteryx allows us to build these data cleansing routines into a workflow to ensure that they are automatically performed the same way any time a file of this type is processed, unlocking real efficiencies. Where we need to perform tasks such as sorting, manipulating or joining files of any reasonable scale, Alteryx comes into its own. Standard steps that are performed regularly are prime targets for Alteryx. This affords excellent opportunities for Chartered Accountants to begin using this tool, as they should have an exceptional understanding of the activity required and the associated inputs and outputs. Robust data processing While many of the functions discussed above would be possible with other tools, Alteryx also has the added advantage of allowing the user to make the data transformation process more robust. While at first, it may be slightly more challenging to use Alteryx rather than filtering, sorting and using copy and paste in a spreadsheet, a Chartered Accountant will quickly become familiar with the tool given its graphical nature. Also, the rigour that is brought to a process by a user deliberately building specific steps into a workflow lends itself to robust processing. In Alteryx, it is also possible and recommended to build in controls to provide comfort over the completeness and accuracy of the information being manipulated at critical stages of the process, assuring that all required data is included and that the result is accurate. The processing is a little more opaque since it generally sits in data files rather than yet another tab on a spreadsheet. You should, therefore, build in the ability to browse the interim data at various stages of your process so you can troubleshoot or review how it looks and check that the different steps are performing as expected. When performing calculations or analysis in a spreadsheet, a small change can cause an error in a set of calculations, and it can be challenging to identify where the error is occurring. There may be hundreds or even thousands of iterations of a formula. As a result, we often see data anomalies fixed with hard-coded values. This is much better in Alteryx as good design will allow errors to be identified and a user cannot revert to hard-coding values, which may not be appropriate for future iterations of a calculation. It is also easier with Alteryx to ensure that inputs are used as provided. It provides a mechanism to revert to the source data when required, which also contributes to the robustness of a process.  Processing at scale In Alteryx, tasks can also be carried out using large volumes of data that would only have been attempted by the bravest of spreadsheet proponents, making tasks that were previously tricky (or in some cases, impossible) more feasible. Some spreadsheets have an outer limit of up to one million lines, but in many cases, the practical limit is much lower since adding formulae to files with only thousands of records can cause them to slow down drastically. Alteryx can handle the bigger datasets we now encounter. In addition, making changes to calculations in spreadsheets can be time-consuming and many have encountered spreadsheet files crashing. Alteryx generally allows changes to be made and re-run quickly. Many workflows will run in seconds while processing simple transformations for millions of records should only take a few minutes. This is a huge advantage when building a workflow, as it enables the user to experiment efficiently and add additional functionality with ease. Documentation The ability to review a workflow and the controls built into it affords management excellent oversight of calculations that may drive critical outputs. Detailed documentation of processes is something that is not always present, especially for data-heavy tasks that began as an ad hoc exercise but are now embedded in everyday activities. Performing data transformation in a tool such as Alteryx and adding annotations to workflows has the added benefit of encouraging the user to define and document what is happening in a process. Outputs The outputs from Alteryx workflows can be produced in a range of formats. It may be that the most convenient output from your Alteryx workflow is a spreadsheet, such as debtors who are over their credit limit. It is also possible for visualisations, such as those covered in previous articles, to be refreshed automatically with data files produced from Alteryx. This can help Chartered Accountants provide significant value to their businesses. Significant value Alteryx may not be required when you are working with easy-to-manipulate data on a once-off basis. In an increasingly regulated and controlled business environment, however, the benefits associated with repeatable, efficient and documented data transformations are of significant value. As we are supported by our soon to be qualified Chartered Accountants on our data analytics journey, we encourage you to share your experiences within your teams. Knowledge-sharing and an open attitude to the improvements technology can bring will breed success.   Richard Day FCA is Partner, Data Analytics & Assurance, at PwC Ireland. Alannah Comerford ACA is Senior Manager, Data Analytics & Assurance, at PwC Ireland.

Apr 01, 2020

From a governance perspective, COVID-19 will test the robustness of our legislation and our ability to take a more technological, and perhaps modern, approach, writes Claire Lord. The Irish Government recently announced additional measures to protect citizens by delaying the spread of COVID-19. One of these measures is social distancing, which requires individuals to keep a two-metre space between them and other people. This measure and the increasing restrictions on international travel is making it difficult for Irish companies to hold ‘in-person’ board meetings and to proceed with shareholder meetings, particularly annual general meetings (AGMs), in the usual way. Against this backdrop, what can companies do to allow business to proceed so as to comply with the law while protecting the health of its directors, employees and shareholders? Board meetings Generally speaking, the board of an Irish company can meet ‘virtually’. This means that board meetings can be conducted by telephone, video conference or a similar facility. For a virtual board meeting to be properly convened, all directors must be able to hear each other and speak to each other. At a virtual board meeting, the quorum is made up of those participating in the meeting. All participating directors are entitled to vote in the usual way and the location of the meeting, consequent on social distancing requirements, is likely to be the location of the chair. The board of an Irish company can also usually pass resolutions in writing. For a written resolution to be valid, it must be signed by all directors of the company at that time. A written resolution takes effect when the last signature is collected. A written resolution can be signed in counterpart and can be circulated and signed electronically. The fully signed version must be retained with the minute book of the company. The written resolution procedure can be used even if one of the directors is not permitted to vote. Where this is the case, the remaining directors sign the resolution and note the name of the director who is not entitled to vote and the reason why. It is always recommended that a directors’ meeting is held where the business to be transacted is contentious, or if it is anticipated that the business to be approved will not be supported unanimously. Directors must also meet where they are required to make a declaration of the company’s solvency as part of the summary approval procedure to approve certain restricted activities. Where these circumstances exist, meeting “virtually” is sufficient. The board of a company must also consider the location of its board meetings or decision-making where it is important from a tax residency perspective for them to be able to demonstrate that the company is managed and controlled in Ireland. Shareholder meetings Companies with AGMs due to occur in the months ahead should consider how best to proceed with their AGMs in a way that complies with the law, and affords shareholders the ability to participate, while observing the Government’s restrictions on mass gatherings. An AGM must have a physical location that is specified in the AGM notice. The quorum for an AGM is determined based on the number of shareholders present in person or by proxy, usually at the physical location of the meeting. Therefore, to avoid a large  number of shareholders attending at the physical location for the meeting, shareholders should be encouraged to appoint a proxy to attend and vote on their behalf. Ideally, shareholders should be encouraged to appoint the same proxy where possible (while always considering how a quorum will be achieved).   While an AGM must have a physical location, a company can permit participation by shareholders at an AGM via technology, once that technology permits shareholders to participate and vote electronically.   Multi-member and single-member private companies limited by shares (LTDs) and single-member companies of other types can dispense with the legal requirement to hold an AGM by opting to carry out the business of the AGM by way of a unanimous written resolution.  Similarly, all company types can pass resolutions in writing.  In the case of LTDs and designated activity companies (DACs), this right applies regardless of any provisions in the company’s constitution.  Similarly, LTDs and DACs can pass majority written resolutions where a particular process is followed. Business as usual? We face significant uncertainty in the months ahead with the spread of COVID-19. Finding ways to conduct business regardless, while protecting the health of others, will test our ingenuity. From a governance perspective, it will allow us to see if our legislation is robust enough to support a more technological and, dare I say it, modern approach.   Claire Lord is a Corporate Partner and Head of Governance and Compliance at Mason Hayes & Curran.

Apr 01, 2020

Colm Davitt, CEO at Dental Care Ireland, discusses life at the helm of the five-year-old dental business he founded with his brother. What do you most enjoy about your current role? My role involves acquiring dental practices and helping them achieve their full potential. It combines my background in business and accountancy with a passion for the healthcare sector. I love seeing the practices grow and evolve as we invest in facilities, services and management support structures. Our 15 practices are located all over the country, which means a fair amount of travel, but I enjoy getting out of the office every week to meet with current and potential practice teams. What has been your career highlight thus far? Two career milestones stand out. First, I passed my final admitting exams to become a Chartered Accountant at age 21. My qualification has been the foundation and bedrock of my career achievements to date. Second, a major highlight was the opening of our first branded Dental Care Ireland practice. I first came up with the Dental Care Ireland concept in 2014 with my brother, Dr Kieran Davitt. Our vision was to create a group of established, high-quality dental practices nationwide. It has been a hugely rewarding experience to see that idea become a reality in just five short years. How do you stay productive day in, day out? I am a firm believer in setting goals. We have ambitious growth plans for Dental Care Ireland, so I review our objectives and targets at least every six months. I am also fortunate to have built a highly motivated team around me. Our head office is located beside the sea and close to home, so I can walk to and from work. When I’m not on the road, it gives me some guaranteed fresh air and headspace. I try to balance work with plenty of family time too. I dedicate my weekends to watching my kids in action on the sports field or catching up on GAA.  What changes do you anticipate in your profession in the next five to ten years? I expect to see the large-scale automation of routine accounting and data processing over the next ten years. It will be essential for Chartered Accountants to remain commercial and value-focused. In general, I think the need for flexibility in the workplace will continue to grow, and employers will have to adapt accordingly. In the dental sector, we may see fewer dentists willing to run their own businesses due to increased compliance and administration requirements. What is the best advice you’ve ever received? Stay true to what you really believe in. Being a CEO can be a lonely place, and there are many ups and downs along the way. If you believe in what you are doing, you will gain respect and trust from those around you. Over the years, I have had the privilege of working with several great mentors and CEOs. They all had the ability to create a small but very loyal team, which is probably the most important lesson I have learned. Working with a talented and supportive team makes the days much more enjoyable and fulfilling.

Apr 01, 2020

While COVID-19 will take a significant toll on 2020 tax receipts, Peter Vale suggests that the figures should return to current levels at some point next year. At the time of writing, the coronavirus pandemic looks likely to have a significant adverse bearing on global economic growth, in addition to the substantial societal impact we are all experiencing. We know from experience that an economic downturn can dramatically affect exchequer receipts – there was a 40% decline in corporate tax receipts alone between 2007 and 2009. So, what impact will COVID-19 have on tax receipts by year-end and what will that mean for our economy? Corporation tax Large companies make their first tax payment six months into their financial year, with a further payment one month before year-end. In Ireland, May and June tend to be the first key months in the year for corporation tax payments. A company has the option to base its first payment on either current year estimates or the prior year actual liability. Given the expected impact of the virus on the economic activity and profitability of most companies, you can expect that many will choose to base their first payments on current year estimates. It may not be possible to assess the full 2020 impact of the virus by May/June, however; some large companies may take a conservative view and make payments based on the prior year position. Assuming the virus continues to cause economic disruption through to the end of the year, there could be significantly smaller second instalment payments later in the year or large refunds due to companies in 2021. For many smaller companies, November is the critical month with the ability again to assess the liability based on the current year estimates. All of this means that we could see significantly smaller corporate tax payments this year, likely first evidenced in May/June with a further reduction in November returns, if the virus disrupts economic activity through to year-end. It is challenging to assess the scale of the potential reduction in corporate tax receipts. In this author’s view, it will be significant and could also impact on 2021 figures. But on the positive side, one would hope that the figures would return to current levels perhaps late next year. This would contrast with a more gradual increase in receipts following the economic crash. COVID-19 will also impact other tax heads. VAT Restrictions on travel and movement, plus enforced closures, will likely have a significant impact on consumer spending and a consequent downward impact on VAT receipts. While online spending could continue, supply chain issues are likely to mean even that option will be curtailed. Discretionary high street spending may be impacted most, with many shopping trips confined to the purchase of essential goods. Again, one would expect that any resultant downturn in VAT receipts would be temporary. Still, it could last for the rest of the year and trickle into early 2021 receipts if Christmas spending is impacted. Income tax and capital taxes Income tax receipts will also suffer, with seasonal and temporary roles likely to be hit hardest, and a reduction in profits generally for the self-employed seeing tax receipts fall. While not as significant, capital taxes will also suffer with deal volumes expected to fall across many asset classes, impacting both capital gains tax and stamp duty receipts.  Impact The impact of most of the above will be seen before the October Budget, leaving the Minister for Finance facing some difficult decisions, assuming there is no mini-Budget before then. There may be a need for some temporary tax-raising measures in addition to dipping into cash reserves and a considerable increase in borrowing. While significant on many fronts, COVID-19 is expected to be something we recover from, with many governments already launching initiatives to help individuals and businesses get through the crisis. The Republic of Ireland is lucky to be home to many large multinational companies that use Ireland as a hub for global activity. It is almost inevitable that COVID-19 will see the profits and tax receipts of these groups fall substantially, with a decrease in domestic economic activity generally also fuelling a significant dip in tax receipts. While I believe the decrease in 2020 tax receipts will be significant, the figures should return to current levels once the worst of the crisis is over. A best estimate of when this will be is likely at some point next year. Peter Vale FCA is Tax Partner at Grant Thornton.

Apr 01, 2020

Kim Doyle considers the best course of action for businesses that are strained financially as a result of the impact of COVID-19. COVID-19, a term that was not part of most members’ vocabulary a mere two months ago, is now the unwanted commandeer of conversations. Self-isolation, social distancing, WFH (working from home) and CC (conference call) have become part of our basic business language. But we must not forget to keep talking about the old reliable, tax. Continue to talk to Revenue, as early as possible, if you are now experiencing timely tax payment difficulties. This is one of their key messages. The other is to get tax returns in on time. At the time of writing, Revenue’s message to businesses strained financially as a result of the impact of COVID-19 is that they will work to resolve tax payment difficulties. Viable businesses that experience cash flow difficulties have long been encouraged by Revenue to engage with them as early as possible. Often, entering a phased payment arrangement is the appropriate practical step to deal with outstanding tax payments. In fact, at the end of 2019, over 6,300 business had such arrangements in place covering €73 million in tax debt, according to Revenue. Revenue will only agree to a phased payment arrangement provided the relevant tax returns are filed with them, the tax due is fully calculated, the business is viable and there is early and honest engagement. Applications for such an arrangement can be made via the Revenue Online Service (ROS). Supporting documents will be required; the volume of documentation depends on the level of outstanding tax payments. A down-payment must be made, which can range from 25-40% of the total tax payment, which may include interest. Agents can apply on behalf of their clients via ROS. Applications are typically responded to within two weeks; in many cases, arrangements are up and running in a matter of days. Responding to the difficulties arising from the impacts of COVID-19, Revenue has implemented specific measures for small- and medium-sized enterprises (SMEs) experiencing trading difficulties. Perhaps the most important being that interest will not be applied to late tax payments of VAT for the January/February period (due by 23 March) or employer PAYE liabilities for the months of February and March. Any future similar suspension will be considered at the relevant time, Revenue say. For other businesses experiencing temporary cash flow or trading difficulties, the advice from Revenue is to contact the Collector-General’s office directly or the appropriate Revenue division. Revenue has also suspended all debt enforcement activity, for now. Current tax clearance status is expected to remain in place for all businesses over the coming months.  And in an effort to ease the burden on households, Revenue also announced the deferral of certain local tax payments (annual Debit Instruction/Single Debit Authority) to 21 May from 21 March. As of now, there is no statement from Revenue on dealing with other taxes such as corporation tax. In this unprecedented turbulent environment, protecting the tax receipts must be one of the priorities for Government. It is hoped that any dip in tax receipts will be confined to 2020. However, as long as we continue to talk about COVID-19 and suffer the impacts, we must also continue to talk to Revenue. Kim Doyle FCA, AITI-CTA, is Tax Manager at Chartered Accountants Ireland.

Apr 01, 2020

It is now time to consider the UK tax relief available on building projects, writes Eugene Moore. To stimulate international investment in the UK, the then-Chancellor, Phillip Hammond, presented his 2018 Autumn Budget to the House of Commons. In it, he announced the introduction of capital allowances for capital expenditure incurred on the construction, renovation or conversion of most UK and overseas buildings and structures. The Structures and Building Allowance (SBA) applies to contracts entered into on or after 29 October 2018. Construction projects that may qualify for the SBA are now starting to be completed, with the structures and buildings coming into use. It is now, therefore, time for the current owners and their advisors to consider the significant tax relief available on such capital projects and how best to mitigate the risks of making an invalid claim. The relief Relief is available for UK and overseas structures and buildings where the claiming business is within the charge to UK tax. The SBA was introduced at a rate of 2% straight-line basis on qualifying expenditure over 50 years. The rate was increased to 3% in the Budget and the change will take effect from 1 April 2020 for UK corporation tax and 6 April 2020 for UK income tax. The relief commences with the later of: The day the building or structure is first brought into non-residential use; or The day the qualifying expenditure is incurred. Once qualifying expenditure is incurred, the first use of the structure or building must be non-residential. Subsequent events, such as change of use to residential or the demolition of the structure or building, will impact the availability of the SBA. A period of non-use immediately after a period of non-residential use is deemed as non-residential use, and the SBA continues to be available. Qualifying activities The structure or building must be for a qualifying activity carried out by the person who holds the relevant interest. Qualifying activities include: trade; an ordinary UK property business; an ordinary overseas property business; a profession or vocation; the carrying on of a concern listed in ITTOIA05/S12(4) or CTA09/S39(4) (mines, quarries and other concerns); or managing the investments of a company with investment business. Qualifying expenditure Capital expenditure incurred on the construction or purchase of a structure or building (including professional fees and site preparation costs) is qualifying expenditure. Excluded expenditure covers: the cost of the land or rights over the land; the cost of obtaining planning permission; financing costs; or the cost of land remediation, drainage and reclamation. Abortive costs, such as architect’s fees associated with a structure or building that is not completed, do not qualify for the SBA. Commencement date As the SBA was introduced to stimulate investment from 29 October 2018, allowances are not available on structures or buildings where the contract for the physical construction work was entered into before 29 October 2018. For projects under a construction contract, the commencement date for the SBA will be the date of that contract. HMRC is of the opinion that contracts can take different forms; it gives the example of email exchanges, which confirm that works will take place. Where no contract is in place, the date of the commencement of physical works represents the commencement date for the SBA. This is also the case where physical works commence, and a contract is subsequently put in place. Site preparation According to HMRC, the cost incurred in preparing land as a site is treated as expenditure on the construction of the structure or building that is then built upon that site. This includes cutting, tunnelling or levelling land. On the plus side, these costs are not excluded as expenditure for the SBA. On the downside, the timing of these costs could drag the entire construction project into an invalid claim position for the SBA if they are incurred before 29 October 2018. HMRC states that the following does not impact the commencement date: separate preparation and construction contracts; replacement of preparation contracts; preparation works ceased then recommenced; and preparation work redone. Demolition or enabling works incurred before 29 October 2018 do not in themselves make the entire claim invalid for the SBA unless explicitly linked to the actual structure or building. Practical issues Before an SBA claim can be made on a UK income tax or UK corporation tax return, the current owner of the relevant interest in a structure or building must create and maintain an allowance statement. Where the current owner incurred the qualifying expenditure in relation to the structure or building, the current owner creates the allowance statement. Where the current owner acquired the relevant interest in the structure or building from another person, they must obtain the allowance statement from the previous owner. An allowance statement means a written statement, which must include the following information: information to identify the building to which it relates; the date of the earliest written contract for the construction of the building; the amount of qualifying expenditure incurred on its construction or purchase; and the date the building is first brought into non-residential use. CPSE.1 (Ver. 3.8) General Pre-Contacts Enquiries for all Commercial Property Transactions now contains questions concerning the SBA and requests explicitly the allowance statement. In summary The SBA may result in significant tax relief for UK businesses that construct or purchase non-residential structures and buildings where previously, there was none on such expenditure. Careful consideration should be given to the commencement date of the project, and detailed evidence must be created and maintained by way of an allowance statement to avoid invalid claims.   Eugene Moore ACA is Corporate Tax Manager at BDO Northern Ireland.

Apr 01, 2020

David Duffy discusses recent Irish, EU and UK VAT developments. Irish VAT updates VAT compensation scheme for charities eBrief 21/20 contains updated guidance in respect of the VAT compensation scheme for charities. This scheme is now open in respect of VAT incurred by charities in 2019. The deadline for submitting such claims is 30 June 2020. Charities must satisfy various conditions to make a valid claim and there is a formula for calculating the claim. The total fund available for all claims is capped at €5 million and, if exceeded, this amount will be allocated between valid claims on a pro rata basis. There have been no changes to the scheme, but the guidance provides further details on the terms “total income” and “qualifying income”, which are relevant to the calculation of claims under the scheme. VAT on telecom services On 31 January 2020, the Tax Appeals Commission (TAC) published a determination in a case (16TACD2020) involving a mobile telephone operator (the appellant). The case considered the VAT treatment of the appellant’s cancellation charges, unused data, and non-EU roaming on bill-pay mobile phone services, as well as the time limit for making VAT reclaims. The appellant was unsuccessful in arguing for a VAT refund on three counts but did succeed in a claim for a VAT refund on non-EU roaming services. The key points of TAC’s determination were as follows: The appellant was liable for VAT on cancellation charges to bill-pay customers for early termination of their contracts. This followed a similar decision by the Court of Justice of the EU (CJEU) in MEO (C-295/17). The appellant was also liable for VAT in respect of customers’ unused data included in the price of their bundle. The appellant’s argument that VAT refunds should extend back further than four years was also rejected. The appellant had sought to argue that it should be equivalent to the five-year refund period available for other taxes, but this was rejected. The appellant was successful in arguing for a VAT refund to the extent that its bill-pay customers used its telecom services outside the EU. Revenue had sought to argue that refunds for non-EU roaming should only be available for pre-pay customers, but this was rejected by the TAC. While the case is principally relevant to the telecoms sector, some of the principles regarding cancellation charges and equal treatment could have wider application. The determination (which is available on the TAC’s website) is, therefore, a useful read. Time limits The question of time limits for VAT refunds was also the subject of a TAC determination (03TACD2020). The taxpayer was engaged in a VAT-exempt business but was entitled to partial VAT recovery on its dual-use input costs to the extent that its services were to non-EU recipients. However, during 2009, the taxpayer had not been aware of its entitlement to partial VAT recovery and therefore had not taken any VAT recovery on its costs. Upon becoming aware of this entitlement, the taxpayer submitted a claim on 31 December 2013, which included VAT incurred before 1 November 2009, which would ordinarily be outside the four-year time limit. The taxpayer sought to argue that this VAT was still within the four-year time limit because, in the taxpayer’s view, it was an adjustment of its partial exemption VAT recovery rate review for 2009 (which fell due after 31 December 2009). However, the TAC disagreed as the taxpayer had not applied any VAT recovery rate to dual-use inputs during 2009. The TAC concluded that only VAT incurred from 1 November 2009 onwards was correctly included in the claim submitted on 31 December 2013. While the facts of the case are quite specific, it emphasises the importance of following the appropriate procedures and paying close attention to time limits when submitting a claim for any historic VAT. EU VAT updates VAT treatment of boat moorings Segler (C-715/18) was a German non-profit-making association whose objective was to promote sailing and motorised water sports. It maintained boat moorings, some of which were used by members of the association and others were used by guests. Segler applied the reduced rate of German VAT as it believed the letting of the moorings fell within the meaning of “accommodation provided in hotels and similar establishments, including the provision of holiday accommodation and the letting of places on camping or caravan sites”. The German tax authorities argued that the standard rate of VAT should instead apply. The CJEU concluded that the reduced rate could not apply, as the letting of the boat mooring was not intrinsically linked to the concept of “accommodation”. UK VAT updates Budget 2020 The UK’s Chancellor of the Exchequer announced several VAT measures in Budget 2020, which was presented to the UK parliament on 11 March 2020. The key updates are summarised below: The 0% rate of VAT will apply to e-books and online newspapers, magazines and journals with effect from 1 December 2020, bringing them in line with the rate applying in the UK to physical books and publications. The standard 20% rate has applied heretofore. Interestingly, however, the UK Upper Tribunal had already held that the 0% rate correctly applied to such publications in the Newscorp decision, but HMRC has indicated an intention to appeal that decision. Consequently, the position applying before 1 December 2020 remains to be clarified. As a cash flow-relieving measure following the implementation of Brexit, postponed accounting for import VAT will be introduced for all goods imported into the UK with effect from 1 January 2021. Postponed VAT accounting will enable UK VAT-registered businesses to self-account for import VAT under the reverse charge mechanism. From January 2021, 0% VAT will apply to women’s sanitary products. David Duffy FCA, AITI Chartered Tax Advisor, is Indirect Tax Partner at KPMG.

Apr 01, 2020

How can leaders stay connected to their teams while working remotely? Communication and understanding, explains Patrick Gallen, is key to successfully navigating these uncertain times. The current global pandemic has the majority of us working from home and, for some, this is a new practice. However, remote working has been around for years in certain sectors, and those leaders have learned lessons, sometimes the hard way, about what works and doesn’t. How can we fast-track our development to quickly adapt our remote leadership skills to lead in the current situation? Adjust your mindset First, it is important for leaders to adjust their mindset, and resist the temptation to rule out certain activities just because you can no longer see your team in front of you. Do you normally have a quick morning meeting in the office? Don't cancel it – use technology to connect virtually instead. We all know that a lot of interaction in the office happens at the coffee machine or staff kitchen, so a leader has to think differently about creating opportunities for informal check-ins, as well. Acknowledge the change With schools out, many team members will be juggling work and parenting responsibilities, so make it clear that it’s OK to have some evidence of family life during your calls. This could also be a topic for informal discussion – sharing tips on home schooling, exercise, and keeping sane during this crisis! Sharing hobbies and activities can inject some fun into team discussions. Accommodate flexible time schedules Asking your team about the best time to schedule calls is also a consideration – working patterns have changed in response to this situation, so the regular nine-to-five is no longer the norm. A leader who has spent time thinking about what their team are going through will be much more considerate and accommodating. Understand the tech Those who have been leading remote teams for years know that the technology is critical to their success. Firms that have invested in the tools to connect virtual teams before this crisis are certainly a step ahead of those that are reactively scrambling to try new systems. If you have easy access to Teams, Skype, Zoom, Google Hangouts, or other collaborative tools, then use them! Give business updates A quick check-in and update from everyone on the team helps to avoid duplication of effort, and keeps the team on track and connected with projects. A business update from the leader can also be very reassuring for the team during this time of uncertainty. People are worried about the state of the economy, the business, and the impact on their jobs, so a leader needs to inform the team about how the organisation is coping, provide client updates, etc. An optimistic and honest response is best. Keep it short and sweet To keep everyone fully engaged during virtual team meetings, you may want to keep the meeting shorter and to the point, and vary the speaker. Turn on the webcams, if possible, so that people are not tempted to ‘multi-task’ during the meeting. And, while it is great to connect the entire team, don’t forget about one-to-ones during this period. Having a check-in with each member on their own is very important and provides an opportunity to listen, so that communication is not only one way. Communication is key to successful team working, and this is still the case while working remotely. This takes extra effort on the part of the leader, but will pay dividends to get through this crisis – and you may just find that many of the new ways of working are worth continuing when we eventually get back to a new normal. Patrick Gallen is Partner of People & Change Consulting in Grant Thornton Northern Ireland.

Mar 26, 2020

These uncertain times have brought a big change to the way we work, but that shouldn’t stop you from using your leadership skills to successfully manage your team remotely. Moira Dunne tells us how. We’ve all been taken by surprise by the speed of events in relation to COVID-19. Most people are working from home, and for leaders and managers this means a shift in style and approach. However, the skills required are the same leadership skills you use every day in the office, just with a slight adjustment. Use these pointers to help lead your team from a distance. Provide focus As you streamline your business to essentials activities, many decisions will be made at a senior level. Help people adjust to these changes by explaining the reasons behind them and how the changes will impact everyone’s responsibilities.   Discuss priorities with each person. Listen carefully to their ideas and suggestions and agree weekly and daily targets. This will help people stay on track, and is particularly useful if people are finding it hard to focus while working at home. A target combined with a daily check-in will give people a sense of accountability. It can also provide a sense of achievement and productivity as those targets are reached. Provide connection Being available by phone and email to discuss questions or concerns is key. Consider using video for daily check-ins. Group video calls keep everyone connected and can help keep morale up. Tools like Zoom or Whereby are easy to set up and manage. Perhaps someone in your team would take this on as a mini project to get everyone connected. Collaborative tools like Microsoft Teams, Trello or Slack can also be used for updates on group projects and to track the status of tasks.  Provide flexibility Flexibility is key right now. We are all adjusting to these uncertain times and it is important to help your team manage their stress. Adjust your expectations as you set targets. People can’t be expected to work at the same rate or pace as they did in the office. Some may find they get more work done, as they have fewer distractions. But for most, there will be more demands on their time right now, particularly with children off school. Your people may not be available during usual business hours. Be flexible. Allow them to work at different times if the demands of your business can support it. The new normal For many companies and leaders, this transition to remote working will be tough. But there may be some insights into new ways of working for your business in the future. Keep an open mind and an open ear during these uncertain times. Moira Dunne is the Founder of beproductive.ie.

Mar 26, 2020

Can you influence from a distance? Without a doubt, but first you need to consider your environment and what triggers those around you. Liam Dillon tells us how. In a normal working environment, we interact frequently. With the current ongoing crisis, we find ourselves having to work from home and meet up with people virtually to discuss plans and projects. While everyone has their quirks, managing and influencing effectively from a distance can present its own set of problems. Here are five actions managers can take while trying to influence from a distance. This is simple and intuitive stuff but sometimes bad habits surface, especially when faced with such unexpected circumstances. You do not need to be centre stage Take an interest in what your team is saying about projects. It’s important to remember that you will get to say your piece before the conversation is over, but other people need to be heard even if they aren’t leading the team. Listen to the conversation, take in what they’ve said and add to it, passing the turn back to them to elaborate further. By encouraging conversation, you are relaxing the environment for everyone, especially those who can’t see you face-to-face over camera. In fact, studies have shown that those who express an interest in what someone is saying and then follows-up with questions to encourage debate have a higher chance of influencing those around them. Remember personal details Forgetting someone’s name – especially someone on your team – can ruin rapport. Remembering someone’s name has been shown to make people more likely to help you, buy from you, and is seen as a compliment. Let people talk about themselves Whether we want to admit it or not, we love to talk about ourselves, and the last thing anyone wants is to be cut down, especially when they can’t see your face to judge your emotions. The lesson here is that if you want to make those you are trying to influence feel good, get them talking about themselves and their interests. Focus on others When introducing someone to a group, make them feel important by highlighting their skillsets and placing value on their thoughts and opinions. Try asking questions to delve deeper into their thoughts to get a better picture of who they are and what they can bring to the team; by doing this, you are encouraging each person to engage more in the conversation. Find the similarities We prefer people who are like us. We are more likely to become friends with people who we perceive as being similar to us. So, the rationale should be that we are more likely to listen and take into account the opinions of these people.Find the similarities with the people you are influencing: they are more likely to listen and take your opinions into account if they perceive you as being the same as them. To influence is to know the other party, even if you can’t see them for the time being. Liam Dillon is a Senior Consultant with Turlon & Associates.

Mar 26, 2020

Working from home has become necessary for many people due to COVID-19. But how can you manage when it comes to working remotely? Eric Fitzpatrick gives us nine tips on how to successfully work remotely without going stir-crazy or losing productivity. The Coronavirus is forcing organisations and workforces to reconsider their current work practices. Non-essential travel has been cancelled, events are being postponed or moved to online platforms and companies and organisations have their staff work remotely from home.   At first glance, working from home can be appealing, but there is a downside to it as well. As someone who has worked from home for more than ten years, the following are worth noting when it comes to remote working.  1. Discipline  The key to working at home is discipline. Be clear about what time you will start and finish. Agree these times with your organisation. You might have more flexibility with your hours than you would in your office but it’s important to be clear about your hours. Build in the times and duration of your breaks. Know that you’ll take a break at 11am for 15 minutes. If you’re not disciplined, 15 minutes could easily become 30 minutes or longer.  2. Get dressed If how you dress is too casual, how you work might be, too. Wear work clothes. Working from home might mean dressing as you would for casual Friday in the office, but dressing for work gets you in the frame of mind for work.  3. Designate a workspace  If you have a home office where you can close the door behind you at the end of the day, great. If not, work from a space where you must be clear at the end of the work day, such as the family dining table. By removing access to the workspace, you remove the temptation to go back to work for a couple of hours in the evening.  4. Work in a room that is bright and airy Working in a dark office with no natural light can reduce productivity and enjoyment.  Create a tidy workspace and an environment that is conducive to effective working. Have a place for everything and place only that which you will need in that workspace. 5. Ditch your mobile Be without your mobile for as much as possible, if not needed for work. Leave it in another room if you’re working on a project from which you don’t want to be interrupted. You can lose up to an hour a day picking up your phone to check social media platforms. Remove the temptation.    6. Skip the chores During your working day, don’t put on a wash, do the weekly shopping, vacuum, change the bed covers, paint the kitchen or replace that lock. You’re being paid to work, not to get ahead of the housework.   7. Keep healthy  If you walk or cycle to work, working from home takes away the opportunity to get that exercise. Can you make time elsewhere to get in some activity? Your kitchen will probably be closer to your workspace that the office canteen is to your office desk. It can be very tempting to take 10 seconds to walk to the kitchen to grab a snack. Working from home, you might find yourself doing less exercise and eating more – a bad combination. Try to manage your activity levels and snack time. 8. Don’t go stir-crazy  Working from home can take a bit of getting used to. You go from working in a busy, noisy office to working in quiet isolation. At first, it seems great, then slowly the walls start to close in. The silence becomes too loud and you find you need people to interact with. Don’t go more than two days without speaking to colleagues or clients. Design your calendar to ensure you have regular contact with the outside world.  9. Turn on the radio Music can be a positive contribution to an effective workspace at home. Played in the background, it can replace the noise of the office and remove some of the quiet isolation.  Working from home can increase productivity, improve your quality of life and may become necessary for many people over the coming weeks or months. Knowing how to manage it can make it as successful as possible.   Eric Fitzpatrick is owner of ARK Speaking and Training.  

Mar 20, 2020

Working remotely can be a struggle, but the best way to manage it is to figure out what works best for you to be productive. Neil Kelders explains.  You are not alone. We are all facing the same struggles. We need to manage these struggles by taking action. Find what the best ingredients are for you to be productive during an uncertain and stressful time.  Communicate  Ask yourself: what is going to stress me out while working at home? Write out your list and get your partner and kids to do the same and discuss. Address the issues and conflicts that come up and plan to overcome those obstacles.  Calm the storm When you wake up, spend a few minutes sitting with yourself. I meditate but if this isn’t for you, just sit and let your thoughts come, recognise them and let them go, focus on your breathing and the calm around you. Schedule your day around your energy levels  To ensure you don’t stress, you need to work with your body. Some of us are ‘early birds’ so our energy peaks in the morning. Others are ‘night owls’ who achieve more and focus better in the evening. Which are you?  If you’re an early bird, the morning is best for analytical work (figuring problems and planning). As an early bird, energy levels are lower in the late afternoon and evening so use that time for creativity and coming up with new ideas. Night owls work the opposite. Meetings and calls are best scheduled for when you know you’ll have low energy because connecting with people raises energy levels. Use distractions to your advantage Our brain craves novelty. When something unexpected happens (like our phones buzzing, for example) it immediately captures our attention, right? Try to build productivity-enhancing distractions into your day, such as making your: 1. To-do list more visible. Put your to-do list on a brightly coloured pad, so that your eyes are regularly drawn to it throughout the day. When you look away from your monitor, you’ll see the pad and your eyes are immediately drawn to your next goal. 2. Alarm as your assistant. Do you lose yourself in something you love doing and need to be reminded to stop and start doing another task? Your alarm is now your reminder to stay on track. Set end times for your activities. I set my timer for 45-minute sessions. I then take a break, reset the timer and go again for 45 minutes. Try it with your kids, build their structure into yours and take breaks together. Sleep better Better sleep does not start at bedtime. It starts with the choices you make during the day.  Improve sleep by:  replacing your afternoon coffee with a post-lunch walk with family (if not isolating); or using your garden to exercise after work. From a sleep perspective, the ideal time for exercising is five to six hours before bed.  Over the coming days (weeks? months?) you will head a lot of advice, but you need to explore what works for you. We all differ, so don’t become frustrated when advice is not working. Remember to adjust to what will work for you. Consistency is key. This is our reality for now, so do things today that make more time tomorrow. Neil Kelders is a coach and advocate for mental wellness and physical fitness. To receive a free eBook on working from home, email Neil.  

Mar 20, 2020

We all know that stress is bad for us. Given the current global situation, it is essential that we reduce our stress and improve our wellbeing. Tim France tells us how. The current crisis is stressful. We’re worried about ourselves and the people we love getting sick. We’re worried about the economic impact. We’re worried about practical issues, like how to work from home effectively or whether we will have enough milk, bread… or toilet roll. The trouble is, stress is bad for us. Amongst other things, sustained stress compromises our immune systems. So, it’s not just preferable to be able to reduce stress, it’s essential if we are going to fight off a virus. Here are some simple things we can do to reduce stress and improve wellbeing: Limit negative intake Watching endless news about the virus with emotive graphics, graphs and images feeds our fear. It’s important to limit our exposure to all this negativity to maybe just once or twice a day (just not the first thing or last thing!), and to balance negative stories with positive ones. Follow @goodnews_movement on Instagram for some inspirational stories. Get organised Organising your time and work space, planning ahead and scheduling calls and workload removes stress and makes the working day more manageable and enjoyable. Taking time to plan at the beginning of the day or week is one of the simplest and most effective ways to reduce stress down the line.  Create new routines Whether working from home or working with social distancing, we all have to find new ways to live and work. We find routine reassuring and uncertainty stressful. It’s important to create new routines quickly. Look for the positives Human beings always manage to find gold in the dirt. Whether war time or natural disaster, history is full of examples of people creating good things from bad situations. So, whether it’s forging stronger bonds with colleagues, spending more time with family, or becoming a video conferencing ninja, focus on and celebrate the positives that are emerging from this crisis. Stay away from conflict In stressful times, it’s easy for conflicts to arise. If you feel your buttons being pushed, take time to think and cool down before responding. Deal with the facts, not emotions, and work to see the other perspective. Stress breeds conflict and conflict creates more stress. It pays to break that cycle. Take time for yourself “You can’t fill a cup from an empty jug” the saying goes. Much is going to be asked of us all, both personally and professionally over the coming weeks and months, but we can’t keep giving without taking time to refill. Listen carefully to your own needs: do you need to rest? Eat? Exercise? Sleep? Drink water? Simply stare out of the window? Whatever it is, give yourself permission to do it. Make sure you meet your own needs so that you can continue to meet the needs of others. There may be some very challenging times ahead, but by following these simple suggestions, we can reduce stress and boost our immune systems. Tim France is the CEO of Transformative Mind & Body Wellbeing Centre.

Mar 19, 2020

Businesses will face unexpected and unprecedented challenges in the months ahead. Conor Devine explains what some can do to stay afloat. You would be forgiven, after watching or listening to the news over the last couple of weeks, for thinking that we are fast approaching the end of the world. Yes, I am referring to the outbreak of COVID-19, which, and as a direct result of the rapid spread of the disease, has led to the lockdown of 26 countries (and rising), and some 190 million people under quarantine. There is no doubt that this virus and its impact across the board is unprecedented. It has, however, illuminated the fact that we are living in a connected world that operates in real-time. For example, doctors and nurses on the front line in places like China, Italy and the US are live-tweeting updates from intensive care units. News updates state the actual numbers of those infected. At the same time, messages from friends and communities alert us to lockdowns of schools and public spaces, creating volatile reactions in markets around the world. It’s an incredible turn of events and one that few saw coming. Here are some of the economic tremors that rocked the world in the last week: US stock markets had their worst day in 30 years, falling 10%. In Europe, equity lost 10% of its value. In London, the FTSE 100 fell 11%. All of this has increased concern regarding a global recession and a severe credit crunch. However, there are a few things business owners can do in the weeks ahead to ensure that they are prepared for an immediate downturn in turnover, which now looks unavoidable. So, what can business owners do today? And what should they look at and consider if, as some maintain, turnover could drop by more than 50% for some businesses immediately? Here are some measures business owners could consider in light of recent events: Business owners and managers to take a pay cut for the next six months. All remaining staff to take a pay cut for the next six months. Cut staffing levels to reduce costs immediately. Engage with landlords and propose a reduction in rent over the next three months, to be reviewed quarterly. Put business investment on hold and review quarterly. Engage with local authorities and propose that you hold back your business rates. Engage with business groups and government representatives to insist on a VAT holiday for the next six months. On a personal level, I firmly believe that it is more important to start by looking after ourselves and those closest to us. We can fix our financial challenges with the right level of expertise and advice in due course. COVID-19 will pass, and things will return to some form of normality in the next six to 12 months. But it’s what you do today, and in the weeks ahead, that will have a real impact on you and your business’s ability to navigate the tough terrain that faces us all. Conor Devine MRICS is founding partner of Clearpath Finance.

Mar 13, 2020

The Irish economy is facing difficult tests, but the key challenge may not come from the shocks we have to endure but from the urgent need to forge policies that deliver greater domestic stability, says Austin Hughes. Recently, a possible ‘crash out’ Brexit presented a clear and present danger to the Irish economy. Now, the focus is almost entirely and understandably on COVID-19, a months-old name for a major risk that wasn’t on most people’s radar a mere two months ago. Once we get through this crisis, we will return to more 'normal' worries like trade wars and mooted changes to global tax regimes that threaten further near-term economic storms. It’s important to remember, though, that a threatening external backdrop didn’t derail the Irish economy in 2019. Instead, GDP growth of 5.5% and an extra 65,000 at work might suggest boom conditions.  Left behind Sustained and substantial improvements in key measures of economic performance haven’t fuelled any sense of ‘feel good’ among Irish consumers. Instead, the trend in consumer sentiment has weakened over the past couple of years. A recent KBC Bank study suggested widely-felt concerns are weighing on subjective measures of wellbeing. In part, a problematic contrast between ‘macro’ strength and ‘micro’ strains simply reflects the fact that there are more people working and living in Ireland. Total household disposable income is now about 15% above the previous early-2008 peak but, adjusted for an increased number of households, it transpires that the average household has 2% less disposable income than in 2008. A growing population and workforce are also putting massive strains on Ireland’s infrastructure, to a degree unparalleled elsewhere in Europe. Whereas it had been suggested that Ireland would be knocking down rather than building homes for decades, ‘rightsizing’ construction for a strong recovery has proven beyond markets, policymakers or planners. The consequences, whether measured in terms of affordability, long commutes, homelessness or other forms of exclusion, may not show up in conventional measures such as GDP but they do figure forcefully in various barometers of the public mood. More generally, though, an Irish recovery is seeing substantial differences in the scale and spread of improvement between sectors, places and individuals. In turn, this has prompted widespread feelings of being left behind.     Building a stable framework The Irish economy faces major challenges from an increasingly unpredictable global economy, but as is the case with the current health crisis, the key test lies in how we respond. We need a greater test to build a new domestic framework that is seen to fairly share gains and pains along a likely bumpy economic road while delivering the key policy outcomes that a healthy society needs. Fiscal policy will play the primary role in this regard and must change radically if it is to be fit for purpose. We must move from an unproductive preoccupation with decimal points in Government balances to a focus on delivering plausible policy outcomes in areas such as housing and healthcare. Equally, for fiscal policy to be sustainable, we must avoid the view that instant solutions require no more than political will and an open chequebook. In terms of economic progress, as well as current challenges, the old adage 'ní neart go cur le chéile' holds true. Building a coherent framework that enhances economic stability and social inclusion may be the major test facing Ireland’s policymakers and broader population in coming years. Austin Hughes is the Chief Economist for KBC Bank Ireland.

Mar 12, 2020
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