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!”

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.

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.

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.

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.

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.

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.

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.

While support for diversity and inclusion is welcome, it is now time for business leaders to instigate meaningful change, writes Rachel Hussey. In the past ten years, diversity of all kinds – but gender diversity in particular – has become an area of focus for almost all business leaders. In what can be interpreted in many ways as progress, the 30% Club, which I currently chair, has been asked more frequently if 30% is a sufficiently ambitious goal. 30% Club Ireland is a group of Chairs and CEOs of 260 Irish organisations who agree with our goal to ensure that 30% of board members and senior management in Irish businesses are women. The Club was founded in the UK in 2010 by Helena Morrissey, and the Irish chapter was established in 2015. The 30% title was adopted because 30% is the critical mass that a minority must reach in a group to have an effective voice. And 30% is very much a floor and not a ceiling in terms of our goals and ambitions. I am a lawyer, but law firms and advisory and accounting firms face the same challenges around inclusion and diversity. In this rapidly changing world, with new careers emerging all the time, professional services firms have to find ways to stay attractive to graduates (both men and women) and to retain them once they have been trained. In other words, diversity may be a moral imperative, but it is also a necessity for business. Today’s graduates expect to find diversity where they work. That wasn’t the case in the 1990s when I started in practice. There was no discussion about diversity in business back then. There was a concept of ‘equality’, which was confined mainly to pay and conditions. The feminist movement was a social one, focused on issues like contraception. The Women’s Political Association was advocating for more women in politics, but the business world was separate to all of that. And I think many of the women who were in that business world either didn’t focus on the lack of diversity or were too isolated to speak up in any meaningful way. I was, of course, aware of the social movements while I was in college, but I assumed that the world was mostly a fair place and that if you were good enough, you could do whatever you wanted to do. Women were very well represented in the top of my class in Trinity. I didn’t even notice when I was doing a master’s degree at Harvard Law School that only a quarter of my class were women. After I qualified, however, a few incidents surprised me. When I attended an event with my then-boss, and we met his sister, she asked me how long I had been my boss’ secretary. When I was pregnant with my first child and was the primary breadwinner, I realised that I was going to have to rely on social welfare payments to survive. And then I had to make – and saw other women having to make – career decisions that weren’t decisions, as there was no choice. Spurred on by all of this, my women partners and I came together in 2008 and came up with plans to empower the women in our firm. And when I saw Helena Morrissey speak in Dublin in 2013, I knew the 30% Club was a real game-changer because it had clear goals, was business-led and – most importantly of all – included men, without whom no real change will ever be possible. There has been some progress, but perhaps we in professional services firms need to take some bolder steps now – for our men and women. We need to recognise the needs of a more modern workforce and find ways to integrate family life and absences into a career path rather than separate to, or an exit from, a career path. That includes better career planning built around family absence and greater recognition and accommodation of the needs of men in their desire to play an equal part in family life.  We need to recognise the potential for 24-hour demands in a digital age and become more agile in how we work and how we rest – as individuals, as parents, as carers and as human beings – and we need to demonstrate and practise this, starting from the top. We all state our commitment to diversity and equality of opportunity. It’s now time to prove our commitment. Rachel Hussey is Chair of 30% Club Ireland and a Partner at Arthur Cox.  

The ability to judge the mood music of society could be our greatest asset in shaping how the profession is perceived, writes Dr Brian Keegan. If you happen to be an auditor and are of a sensitive disposition, look away now. Apparently, you are not a member of a profession. This is just one of the suggestions of the Brydon review into the quality and effectiveness of audit, which was published at the end of last year. Brydon’s work was prompted by public disquiet over high-profile business collapses in the UK, where it was believed that the auditors should have done better. The standard response of politicians everywhere to topics that make them uncomfortable is to commission a review. In that way, action is seen to have been taken and the discomfort is spread around. There are many reasons, of course, why Brydon is wrong about auditing not being a profession. An audit is, after all, about the exercise of intellectual skill and knowledge. It is an unfortunately flippant conclusion in a study that otherwise has a lot going for it. Worse, in the court of public opinion, many people won’t necessarily make a distinction between what an auditor is and does, and what an accountant is and does. It is therefore inevitable that the profession often finds itself in the uncomfortable position of having to explain itself. It doesn’t matter that our most immediate stakeholders – board members and investors – know perfectly well the contribution of the audit and the role of the auditor. Government policy in any area is not exclusively formed by listening to, and then following, the views of knowledgeable stakeholders. The perception of the accountancy profession can be contradictory. Surveys conducted by Edelman (admittedly commissioned by this Institute) report that the level of confidence in accountants among financial decision-makers is high relative to the level of confidence in other professions. Yet public opinion is all too willing to jump on the bandwagon when they think we get it wrong. For instance, the response to the exclusion of the former Chair of Anglo Irish Bank, Mr Sean Fitzpatrick, from Chartered Accountants Ireland was heavily skewed. Much of it focused on the length of time our proceedings appeared to take. No one seemed interested that the Director of Public Prosecutions wanted the State’s actions in the matter to conclude first, hence a seven-year delay. Understanding this lack of interest is important because the effective communication of what the profession is and does relies heavily on the receptiveness of the public audience. There are lessons here from politics. Prime Minister “Get Brexit Done” Johnson and President “Make America Great Again” Trump are widely lauded for their communication skills, but that misses the point. The genius of the messaging of Prime Minister Johnson and President Trump is not in their capacity for articulation – it is in their capacity to read the mood of the public. During the recent hustings in the Republic of Ireland, the major political parties would have fared better using slogans like “give people homes” or “hospital beds, not trolleys” instead of plaintive murmurings about futures we can look forward to, or an island for all. Like the more successful politicians, the accountancy profession has to get better at reading public opinion and responding to that mood. If we fail to get across the ethical value and the competency involved in the work that accountants do, and the wider contribution made to society by virtue of that, future government policy towards accountants and auditors will be shaped by the negativity that is already out there. Much is made of the challenge to the profession from things like artificial intelligence and robotic process automation. You can add to that list the suspicion with which the profession is viewed. We now know that some don’t even consider that auditing is a profession at all. Dr Brian Keegan is Director, Advocacy & Voice, at Chartered Accountants Ireland.

Against a backdrop of underinvestment, housing will remain a key economic concern for the new Government, writes Annette Hughes. With 2020 well under way, some of us have already broken our New Year’s resolutions and had our focus shifted to the plethora of election resolutions and promises which emerged over the past four weeks. With the election now behind us, political leaders will need to focus on delivering on those election promises.  Governments generally have a five-year term to fulfil their promises, but experience tells us that some of the policy commitments promised in party manifestos may never be implemented. The new Government faces both challenges and opportunities in steering a sustainable economic path as it embarks on a new term. One of its key functions is to administer public policy and deliver high-quality public services and infrastructure across a range of areas including housing, health, education and transport. Notably, housing was the topic that received the most attention during the election campaign and it remains the Government’s number one priority. There continues to be underinvestment in both private and social housing, and the demand for housing significantly exceeds the current supply. Much has been made of the doubling of housing stock from 2016 to 2019 with 21,000 new homes, however the national annual housing supply requirement is closer to 35,000. We were informed during the election campaign that 6,000 new social housing units were built in 2019. Yet, data from the Department of Housing, Planning and Local Government shows that there were 2,003 new social housing units built in the first nine months of 2019, or 2,229 units when local authority vacant units brought back into the stock are included. Adding acquisitions (1,533), units leased from the private sector (630), households supported under the Housing Assistance Payment (12,853) and the Rental Accommodation Scheme (717), implies that a total of 17,962 social housing households were accommodated in the first nine months of 2019. This may be in the region of 24,000 for the full year. This total is in a year in which the latest assessment of housing need reported that there were 68,693 households across the State (43.2% in Dublin) on the social housing waiting list.  In the meantime, the shortage of affordable accommodation to rent and buy continues to create challenges for Irish policy makers, notably, the escalating homelessness problem, and rising rents and property prices, although the rate of growth has moderated in recent months.  Some of the solutions proposed included building more social and affordable homes, preferably on State-owned lands, which has implications for the level of capital investment on housing (€2.03 billion in 2020), the second largest allocation after transport (€2.5 billion). Other measures included rent regulations, which have proved to have a range of unintended consequences for tenants, including a negative impact on new and existing supply, as well as the potential for lower quality stock. The issue of the decade will undoubtedly be climate change and this too will impact on housing stock. With an estimated two million residential properties across the country, the potential cost of retrofitting to improve energy efficiency could be in the region of €10,000 to €30,000 per home, depending on its age and quality.   The one consensus during the election campaign by all parties was that there needs to be a substantial and fundamental change in housing policy, given the failure by all to address a number of issues over the past decade. The new Government clearly has its work cut out. Annette Hughes is a Director at EY-DKM Economic Advisory.

Cormac Lucey argues that accountants need to discuss one of the most unjust outcomes of Government profligacy – the over-taxing of the State’s high earners. The UK electorate recently faced a general election where, under the leadership of an Islington Marxist, the British Labour Party was offering its most left-wing proposals for a generation. It proposed raising the rate of income tax on earnings above £125,000 (equivalent to €146,000) to 50%. With the 4% UK rate of PRSI, that would have required Britain’s top earners to pay a marginal rate of deduction of 54%. In the Republic, those of us of a right-of-centre political disposition are lucky not to have to face the prospect of barely diluted Marxism as a real policy prospect. Here, government control switches pretty seamlessly between right-of-centre Fine Gael and right-of-centre Fianna Fáil-led administrations. That’s the theory. The reality is something very different. Down south, top earners must already face a 52% (income tax 40%, universal social charge 8% plus 4% PRSI) rate of deduction on income above €70,000. Indeed, if a person is self-employed, they face a marginal rate of 55% on income above €100,000. In terms of top tax rates, high earners in Ireland already face marginal rates of deduction in excess of 50% at incomes of around twice the national average that the UK Loony Left was only contemplating applying on incomes of about four times that average. Largely unnoticed, the contours of the Irish tax system have changed very substantially since 2007. Income tax receipts are up €9.3 billion, or 68%, from 2007 levels. They have risen from 29% of total tax receipts to an expected 40% this year. Thirteen years ago, income tax proceeds were slightly lower than VAT receipts. Last year, they exceeded VAT receipts by 52%. The Organisation for Economic Co-operation and Development (OECD) has concluded that Ireland has the second most progressive income tax system among its 36 member countries and the most progressive among its EU members. In other words, high earners pay disproportionately more in income tax here than in nearly every other developed country in the world. Revenue’s Budget 2020 Ready Reckoner document reveals that the top 1% of income earners (those earning more than around €250,000) contribute more than a fifth of all income tax receipts, while the top 5% of income earners (those earning more than about €125,000) contribute more than 40% of total receipts. By contrast, the bottom 75% of income earners (those earning around €55,000 or less) contribute a mere 18% of total income tax proceeds. The top 1% lose an average of 42% of their income in State deductions while the bottom 75% lose an average of 9%. One might accept this dramatic soaking of high earners if it was required to save the State from imminent insolvency, but the Troika left town in 2013. Large rises in tax revenues since then have been used to fund dramatic increases in State spending rather than to reduce the national debt. When the Government first officially forecast total 2018 Government spending, it expected a total spend of €60.3 billion (according to the 2014 Stability Programme Update). In reality, the Government ended up spending €76.8 billion in 2018, 27% more than its original forecast. High earners are being soaked, not to save the State from bankruptcy or to secure minimum levels of State spending but, rather, to indulge a fiscally incontinent and gruesomely inefficient Government apparatus. It strikes me that we (as a profession) and Chartered Accountants Ireland (as a representative body) should speak more loudly about the clear errors and short-sightedness of this approach.  Cormac Lucey FCA is an economic commentator and lecturer at Chartered Accountants Ireland.

The resourceful con artist has now moved to online scams, but old advice still holds, writes Des Peelo. Confidence and a presence are often perceived as necessary for business or personal success. This resonates with me in the context of recognising con artists, better described as fraudsters, whom I have encountered. The most outstanding was an approach from a gentleman, intending to be my client, who lived in a suite in one of the great London hotels. Of indeterminate nationality, his occupation – or the source of his apparent wealth – was not evident. Happily, I withdrew from involvement early in the saga but became aware of subsequent events. A mine of false information This gentleman was promoting an opportunity for investment, which was highly confidential, in newly discovered vast ore resources adjacent to a previously worked-out mine in Ireland. The geological studies and supporting paperwork (all forged) was there. The scam worked for nearly £3 million. British aristocracy and London financiers, amongst others, came on board. Subsequently, this gentleman was arrested in the UK. He was refused bail as the police said they found nine passports in his suite. After one year on remand in a London prison, the charges were inexplicably dropped, though an accomplice and a UK solicitor were subsequently jailed. No monies were recovered. During that year in prison, my almost-client managed to have meals delivered from the hotel, paid monthly in advance. He also started a charismatic movement and a choir. On learning of his imminent release, he called the hotel manager, who reportedly said something like “wonderful news; we will send a car” and he moved back into his suite. That was not the end of the story. Some years later, on watching an investigative programme on UK television, there was my almost-client being named for a stunt involving investors and coffee futures in Central America. This time, still based in London, he allegedly had a prestigious commodities brokerage office in Miami. A load of beeswax Older readers may recall the origin of the description ‘widget’. It was first used in an amusing film, loosely based on a real event in the 1950s, about a Texas con artist launching a widget company on Wall Street. None of the financiers knew what a widget was or wouldn’t admit they didn’t know, but the word was that the oil industry was very excited about it. Hence the contemporary use of the word ‘widget’ when nobody understands the product. The modern equivalent of a widget, on occasion, might be a ‘tech disrupter’. My possible ‘widget’ moment involved another gentleman from London. He arrived in Ireland sporting impressive achievements, connections and qualifications (all bogus), including being a medical doctor. His business card showed an address on the famous medical Harley Street in London (which turned out to be a temporary post-box). Accompanied by a self-described titled lady, he rented a country mansion near Dublin and quickly entertained his way into the bloodstock and racing fraternity. He claimed to be developing a product akin to Viagra, long before it was invented. The connection with Ireland was that the magic ingredient could only be sourced from the blood and urine of top-bred horses. State agencies expressed interest, impressive international names were mentioned as possible directors, suitable sites were inspected, and so on. All that was missing, of course, was the millions necessary to bring it all together. Fortunately, shortly before substantial monies changed hands, a sceptical stud farm owner and the IIRS (then a State scientific agency) analysed a prototype unbeknownst to the bogus doctor. It was largely beeswax. The gentleman concerned managed to depart Ireland in time, leaving large unpaid bills. He was last heard of as being in Lebanon, again something to do with horses. Don’t be fooled The world has now changed for the con artist. The old scams are easily identified with instant access to history, profiles and technical information. However, the resourceful con artist has now moved to online scams. If an investment is too good to be true, it is. This adage has never changed. 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.

Peter Vale and Christopher Crampton outline some expected changes to international taxation in the coming year. 2020 is set to be a busy year for international tax. For Ireland, it’s a key period. While international tax reform to date has been good for the country, the changes being looked at in 2020 pose challenges.   Global tax changes – Pillars One and Two The outcome of meetings in January are key to the OECD’s plans to reach consensus on both the Pillar One and Pillar Two proposals. While the Department of Finance expects the ultimate outcome to be a reduction in Irish corporate tax receipts by up to €2 billion, it’s a very difficult one to call. Pillar One examines a reallocation of profits to market jurisdictions. While this does impact on our corporate tax base, it should not prove fatal on its own. However, recent pronouncements from the US suggest that getting consensus on the Pillar One changes could be difficult. Pillar Two looks at a global minimum effective tax rate and is, perhaps, of more danger to Ireland. A tax rate of 12.5% was suggested by the French Finance Minister in December. While at first glance this would look positive from an Irish perspective, the devil is in the detail.   The most recent OECD draft proposals look at an allocation of profits to individual countries based on a group’s consolidated financial statements. This could provide a distorted result for groups with large intellectual property (IP) migrations to Ireland, in particular, and potentially lead to an effective tax charge significantly lower than 12.5%.  The early months of the year should provide key signals as to the direction of travel on both Pillars, with the outcome critical to the relative attractiveness of our corporate tax regime in the future. We should not rule out the EU taking matters into its own hands, particularly if reaching a consensus looks like being a protracted affair. Transfer pricing Finance Act 2019 saw the introduction of OECD 2017 guidelines into Irish tax legislation. One of the biggest impacts of the guidelines will be more onerous documentation requirements in 2020 for Irish companies, although many will already be maintaining similar documentation on a group-wide basis. At first glance, this might seem to cause disruption for Irish subsidiaries of US multinationals with significant IP in Ireland. While these groups typically have significant substance here, many of the IP functions are carried out outside Ireland; often in the US. Another key change in Finance Act 2019 was the introduction of transfer pricing for Irish small- and medium-sized enterprises (SMEs). While it is expected that the documentation requirements will be more relaxed for SMEs, the extension of transfer pricing will create further administrative requirements on Irish businesses. On the positive side, the extension of transfer pricing to SMEs is subject to Ministerial Order, which we might see later in 2020. Any transfer pricing requirements will apply from that date or later; they should not be retrospective to 1 January 2020. For businesses within the scope of transfer pricing now, more focus from Revenue in 2020 can be expected.   IP migrations 2020 will see the final year of “double Irish” migrations, with 31 December 2020 marking the end for groups with IP currently housed offshore in Irish incorporated non-resident entities. After that date, those entities become regarded as Irish tax resident. While many groups have already moved their IP onshore (much of it to Ireland), a significant number of groups have yet to do so. Hence, we expect many IP migrations to take place in 2020. When an IP migration takes place, the market value of the IP determines the amount of tax allowances available in Ireland. This number is often large, and so we expect to see Revenue examine these IP valuations closely. Interestingly, when these tax allowances expire then, all other things being equal, a significant increase in Ireland’s corporate tax receipts at some point in the future would be expected. However, a lot could happen in the intervening years! Revenue audit focus Aside from the focuses identified above, we don’t expect significant change in the nature of Revenue audit activity in 2020. We expect Revenue’s focus to remain on PAYE and VAT for SMEs, which tend to be the areas of greatest non-compliance.   On the corporation tax side, we have seen Revenue increasingly look for back-up supporting tax losses carried forward, which can prove challenging where the losses were generated some time ago but are being used presently. Businesses should be aware of this when considering document retention policies. Budget 2021 While Budget 2020 has just passed, it’s worth noting that this Budget was based on a more negative outlook than now appears to be materialising. This could mean we finally see more meaningful movement on our high marginal income tax rates later in the year, or possibly a reduction in capital taxes. Of course, a lot can happen between now and then, including a new government, further global tax changes, and six months of known unknowns! And, that’s all without mentioning Brexit. In summary, another year of significant developments on the international tax front looks likely, with the outcome critical for Ireland. Peter Vale FCA is a Tax Partner at Grant Thornton. Christopher Crampton ACA is an Associate Director at Grant Thornton. Brass Tax -- new year, new tax rules by Leontia Doran Since we’re fast approaching a new tax year in the UK (from 6 April 2020), let’s take a look at what is on the horizon for practitioners. IR35 rules From 1 April 2020, the IR35 rules in the public sector are being extended to the private sector with an exemption from the rules only available to “small” businesses. The IR35 legislation is designed to combat avoidance by individuals who are supplying their services to businesses via an intermediary (such as a company) but who would be an employee if the intermediary wasn’t used. Making Tax Digital From 1 April 2020, the UK will join the ranks of France, Italy, Austria, Turkey and Malaysia when it introduces its own digital services tax.  Making Tax Digital (MTD) for VAT continues. Some businesses are now able to apply for an extension to meet the digital links requirement once the one-year soft-landing period ends on either 1 April 2020 or 1 October 2020. However, the criteria to do so is strict, as set out in the updated VAT notice.  Corporation tax The rate of corporation tax is also legislated to fall from 19% to 17% from 1 April 2020. However, the Government has stated that it will remain at 19%. As it’s already on the Statute books, legislation will be needed to reverse this.  And therein lies the rub. The next UK Budget isn’t taking place until 11 March, which means the related Finance Act likely won’t be enacted until several months later. Retrospective legislation is never a good thing. Leontia Doran FCA is UK Taxation Specialist at Chartered Accountants Ireland.

As the new UK Government has been formed by the Conservative party with a significant majority, its policies will set the tax agenda for 2020 and the following four years. Claire McGuigan summarises the main proposals. Business taxes In Finance Act 2016, the rate for corporation tax for 2020/21 was set at 17%. As this rate is set in legislation, it is the rate (excluding the UK banking corporation tax surcharge of 8%) that companies must use for their deferred tax calculations. However, during the election campaign, the Conservative party pledged to maintain the rate at 19%. Therefore, once this change is enacted, businesses will need to revisit their deferred tax calculations. The Chancellor is expected to stick to the existing plans to introduce restrictions to payable research and development (R&D) tax credits from April 2020 to reduce the scope for tax avoidance by small- and medium-sized enterprises (SMEs). However, the Conservatives have pledged to increase the value of the R&D expenditure credit (RDEC) for larger companies from 12% to 13% and review the project qualifying criteria to establish if it can be widened to include R&D on cloud computing and data. They also committed to increasing the relief available under the new structures and buildings allowance to 3% a year. Both of these changes are likely to take effect from 1 April 2020. The Conservative party confirmed its commitment to introduce a Digital Services Tax (DST) from April 2020, although it is not clear if there will be enough time to finalise the necessary legislation by then. Also, at the time of writing, the OECD has asked the UK to postpone implementation of this tax to allow for a standard approach to be considered across all countries. During the election campaign, all three main parties promised to review the impact that the IR35/off-payroll labour changes will have on private sector businesses. Given that these changes were longstanding Conservative party policy, it is unlikely that they will be abandoned entirely. However, delaying the changes until 2021 or committing to a ‘post-implementation review’ may feature in the Budget. Similarly, the outcome of the Loan Charge Review is expected. Again, for the Government to abandon this tax enforcement action seems unlikely, but the Chancellor may announce much more flexible payment terms for individuals facing the charge. Finally, for business taxes, the Conservative party manifesto contained a promise not to raise the rate of VAT during the next parliament. Brexit The promise to “get Brexit done” was central to the Conservatives’ election campaign. With a transitional period operating until 1 January 2021, most operational laws and cross-border arrangements will remain in place until that date. During 2020, the new Government will aim to negotiate a post-Brexit trade deal with the EU that will take effect from 1 January 2021. However, some uncertainty will continue: in the election campaign, the Prime Minister promised not to extend the transition period beyond 1 January 2021 so, theoretically, there may still be a ‘no-deal’ Brexit if a trade deal is not agreed. Alternatively, an extension to the transition period may be possible if a post-Brexit deal takes longer to agree. Employer issues Although the Conservative party committed to ending freedom of movement on Brexit day, under the transitional rules, EU citizens would be able to come to the UK to live and work without any formal application process. If those individuals wish to remain in the UK after 31 December 2020, they can apply for “temporary leave to remain” in the UK which, if granted, will allow them to continue living and working in the UK for 36 months from the date it is granted. From 2021 onwards, the Conservatives plan to introduce a points-based immigration system. Despite the national insurance contributions (NIC) changes for individuals, the Conservatives pledged not to increase NIC for employers and, to help small employers, they also plan to increase the NIC employment allowance from £3,000 to £4,000. Employers should prepare for a significant increase in the national minimum wage (NMW) from April 2020. The Conservative party has pledged to increase it in stages to £10.50 over five years – this equates to a 5% increase from April 2020 and each subsequent year of the parliament. Personal taxes During the election campaign, all the main parties proposed changes to capital gains tax, although the Conservative party proposals were the least radical. The Conservative manifesto did pledge to “review and reform” entrepreneurs’ relief (ER). While it is perhaps unlikely that the valuable ER rules will be immediately repealed, there may be some interim changes to the rules announced in the Budget, pending the outcome of a more fundamental review during 2020/21. The Conservatives intend to raise the annual NIC starting threshold for employees to £12,500 over the next parliament, with an immediate increase to £9,500 from April 2020. The rates of NIC will be frozen for the duration of the new parliament. The Prime Minister also made an election commitment not to increase income tax rates during the new parliament. Past political controversy over pension tax relief perhaps influenced politicians not to make specific commitments on the topic during the election campaign. However, because of the impact the annual allowance charge is having on senior NHS clinicians, the Government has already announced temporary measures to ensure that where they take on additional hours, such individuals would not lose out overall. The ‘quick fix’ compensation arrangement announced during the election campaign is unlikely to be sustained for the long-term, and a review of the underlying rule is likely to be announced in the Budget as it can trigger tax charges for many workers in the public sector (and private sector). On tax avoidance, they propose a new package of measures including doubling the maximum prison term to 14 years for individuals convicted of the most serious types of tax fraud and creating a new HMRC Anti-Tax Evasion Unit.   We await the Government’s first budget, scheduled for 11 March 2020, with anticipation. Claire McGuigan is Director, Corporate Tax, at BDO Northern Ireland.

Becoming a partner in the firm is often the goal when accountants go into practice, but it’s not a walk in the park. Jackie Banner outlines four key steps on the road to making partner. Making partner is the end goal for many who go into practice. The status, financial compensation, and endorsement of one’s skills and expertise are all obvious draws to progressing to this level. Then there is the opportunity to effectively become a ‘business owner’ with responsibility and influence over how the firm is run. This latter piece sounds simple in theory but requires the right considerations and capabilities to execute.  We can’t gloss over the technical competency that is required to make it to partner. Possessing exceptional domain knowledge in your chosen area of expertise is fundamental to any move upwards. Eagle-eyed attention to detail and a holistic view of the business as a whole are also required to consider yourself technically sound. With a rapidly changing business landscape, the burden of knowledge is significant, and can lead a potential partner to focus too heavily on the technical side alone.  The most common missteps that senior level accountancy professionals make in the race to partner have to do with the investment in their own leadership ability,  relationship management and ability to think like someone who’s running a business or a profit-and-loss account. Here’s how to tackle these key steps to making partner. Invest in your leadership ability Over the last six decades, leadership scholars have conducted more than a thousand studies to determine the definitive characteristics and personality traits of great leaders. Out of all the research, not one unanimous, best practice leadership archetype has emerged. Prevailing opinions on the best leadership styles are replaced as quickly as the latest iPhone. However, there are some common through lines in many of them that you can draw from. Whether it’s Six Sigma, values-led leadership, contingency theory (which in itself says there is no one ideal leadership style), communication methods, humble leadership or any number of other theories and best practices, be sure to establish a combination of leadership qualities that best align with you as a person and as a leader.  Signalling that you have the right level of ambition necessary is also required. This is demonstrated by how you carry yourself, your communication style, and interactions and relationships with colleagues and clients. Combine these with that aforementioned oft-ignored investment in yourself to build your own definitive leadership style.  Vision and strategy The most common piece of feedback we hear from nomination committees or hiring partners about unsuccessful final interviews is that the candidate lacked vision in their pitch. At this level, technical competency is assumed. You will be speaking to peers who are equally, if not more skilled than you. They want a business leader to sit alongside them; someone with a new perspective that can bring energy and excitement that will contribute to business growth.  Presenting a forward-thinking, clear vision that will grow not only your business unit but add to the company is perhaps the most valuable thing you can do to be perceived as someone ready to make partner. In practical terms, that vision should translate to an actionable business plan.  When preparing, think strategically about how you’re going to generate earnings, develop a client pipeline, and hit the figures that justify your being chosen as an equity partner. A partner needs to ascertain what those expected figures are for the firm with which they are interviewing. This means crafting a realistic three-year plan to grow revenues at a level that a partner needs to be commercially viable, which is firm dependent.  Relationship management We all need a sounding board to bounce ideas off of or to go to for advice. Therefore, your network and your professional relationships should be a priority on the road to partner. Partners, no matter what age or level of seniority, should have a mentor.  As Chris Outram discusses in his book, Making Strategy Work, you need ‘co-conspirators’ on whom you rely to give their support when it comes to internal decisions and information-sharing across business units. This extends to stakeholder management both inside and outside your firm.   Putting it all together In an increasingly “what have you done for me lately?” world, contextualising the human side of the job is key. Trust your team to deliver while driving them towards a coherent vision by demonstrating effective leadership and building a sustainable pipeline of business.  Sounds easy when you put it on paper, right? There is no doubt it is a huge challenge to make the leap but having a clear idea of what is required and how it should be presented is the first step on the road to partner.    Top tips on the road to partner 1. Have a plan – Set targets and milestones for yourself to track your progress and professional development. Decide what you want out of your career and then work towards achieving it.    2. Invest in upskilling – Find opportunities to develop your technical and soft skills. Invest in as many areas as are available to you.     3. Specialise your skill set – Practice experience is broad and often provides exposure to a wide range of skills and experience, which is great. However, drill down and become a subject matter expert where possible. Be the go-to person in your network for a particular subspecialty.   4. Be flexible – In any business, targets move, circumstances in your or your clients’ business can change quickly. When unexpected events arise or a strategy or project scope moves, always think of yourself as a support for change and not a barrier.   5. Say “yes” – There will always be an element of a job or a particular client you’d rather steer clear from, but don’t. Always say “yes” when asked to take on something new or different.   6. Define your client portfolio and market opportunity – The more distinct your client portfolio is from your peers or your partners, the more likely you are to become a destination for referrals, hold client relationships, and see significant fee income potential in line with expectations for equity partner level.   7. Find a mentor – Find a peer who you admire and who has made choices you respect. Someone who is willing to be your sounding board and provide advice on how to achieve what you want in your career.  Jackie Banner leads Practice Recruitment for Azon Recruitment Group.

Brian Keegan considers the poignant parallel between Brexit and New Zealand in the 1970s. "Earthquake? Best thing that ever happened to us.” This isn’t the best response to the damage done to the city of Christchurch in New Zealand in the wake of the terrible earthquake in 2011. My man had the grace to acknowledge as much after he remembered the appalling loss of life and limb from this particular natural disaster. Nevertheless, as someone who was deeply involved in the New Zealand construction industry, he was all too happy to see the opportunities created by the devastation. It isn’t the first time that New Zealanders suffered due to powerful circumstances outside their control. While the memories of the 2011 earthquake are clearly fresher, there is also a folk memory among New Zealanders of the economic damage caused to them when the United Kingdom joined the European Union in 1973. For a country largely dependent on agriculture exports to its former Commonwealth headquarters, the British accession to what was then the European Economic Community some 40 years ago was a disaster. The economic disruption of 40 years ago is comparable to the threatened damage from Brexit to the food industry of Ireland – north and south. In the 1970s, New Zealand’s main exports were butter and lamb. Despite being on the other side of the world, the UK was a key market for these goods and, in fact, accounted for some 30% of New Zealand’s exports. Being members of the Commonwealth, New Zealand had preferential access to UK markets. That access was to be a casualty of Britain’s accession to the EU. In fact, so great was the problem for New Zealand that London committed to doing what it could to protect New Zealand’s vital interests in the course of negotiating the British accession treaty. The so-called Luxembourg agreement guaranteed limited access for New Zealand produce for a five-year transition period. The idea was to give New Zealand breathing space to negotiate free trade deals with other markets and diversify its export offering, but the economy tanked nevertheless. If all this sounds familiar, that may be because we are witnessing history repeating itself in a way that would have considerable entertainment value if the issues weren’t quite so serious. Leo Varadkar’s mischievous remark that Westminster should offer pay-per-view wasn’t that far off the mark. We may, however, be watching the wrong channel if we are to learn from this repeat – it’s the New Zealand experience we should focus on. In the 1970s, New Zealand wine was virtually unobtainable in Europe and kiwi fruits were a rarity. Now they are mainstream. 40 years on, New Zealand’s export destinations are Australia, China, the United States (US) and Japan in order of importance. The country’s volume of trade with the UK has declined by over 60%. Our Brexit discussions must now move on from brinkmanship and dead-in-a-ditch rhetoric. We are going to have to figure out how to co-exist and trade with our nearest neighbours, culturally and geographically. Business will have to work out how to diversify and establish new markets, and hopefully avoid a repeat of the worst aspects of the 1970s suffered in New Zealand. I doubt very much that any of us will ever be exclaiming, however thoughtlessly like my earthquake man, that Brexit was the best thing that ever happened to us. That’s because there’s one other point about the New Zealand experience. Even though it was clear for about a decade that the trading relationship with the UK would inevitably change in 1973, the New Zealanders seem to have done precious little about it until the hammer fell. Sometimes it takes a crisis to deliver change. Dr Brian Keegan is Director of Advocacy & Voice at Chartered Accountants Ireland.

Brexit deadline The 31 October Brexit deadline is fast approaching and clarity on the issue is as far away as ever. At the time of writing, many options seem possible, including a Brexit delay and a UK general election, but perhaps the most likely prospect is a no-deal or limited-deal Brexit. Both the Irish and British governments have urged businesses to prepare for Brexit, particularly those that import, export or transport goods, animals or animal products. It seems that the UK government is operating on the assumption that a hard border will return to the island of Ireland, as revealed in a UK no-deal contingency document codenamed ‘Operation Yellowhammer’, which was eventually published in mid-September after leaks to the press. The document warns of potential unrest in Northern Ireland along with road blockades, job losses and disruption to the agri-food sector, as well as an increase in smuggling and the potential for disruption to electricity supply. We must hope that this is a dire overestimation of a worst-case scenario. Meanwhile, in Dublin, Institute President Conall O’Halloran recently met with Minister for Finance, Public Expenditure and Reform, Paschal Donohoe TD, to discuss the post-Brexit scenario as well as the Institute’s 2020 Budget submission and other business issues. Brexit support Our Institute will do everything it can to support members and member firms at a time of great uncertainty. You can read our latest updates on www.charteredaccountants.ie, particularly in our Brexit Web Centre and our page dedicated to no-deal Brexit planning. We are encouraging businesses across Ireland and the UK to ensure that they can continue to trade with each other post-Brexit. Applying for a customs registration (an EORI number) is just the first step in the process. Getting an EORI number takes between three and five minutes and can be completed online. While some traders have experience in the customs formalities required to import and export outside of the EU, it will be a first for many – particularly smaller enterprises. Businesses need to upskill in the area of customs using Government supports. They should also assess whether they have gaps in customs knowledge. Revenue estimates that customs declarations are expected to increase from 1.4 million to 20 million per year post-Brexit. HMRC estimates that declarations will grow five-fold to around 250 million. It’s best to be as prepared as possible. New academic year As we move into October, our Institute is about to welcome a new crop of students following a campaign to recruit the brightest and best to the profession. A new programme of specialist qualifications covering areas as diverse as corporate finance and cybersecurity are also getting underway. A central part of our strategy is to train the very best business professionals so that they can make a significant contribution to the economy on the island of Ireland, and further afield. We’re working hard to ensure that whatever the economic climate, we’re providing high-quality Chartered Accountants who will make a valuable contribution to firms and businesses. On behalf of my colleagues in the Institute, I’d like to offer our best wishes to all of our new students as they start out on their Chartered journey. Barry Dempsey Chief Executive

Charities in Northern Ireland may have to provide more detail to the Charities Commission in the near future, but any initiative that restores the public’s trust is to be welcomed. By Angela Craigan On 27 August 2019, the Charity Commission for Northern Ireland opened a public consultation in respect of new questions charities must answer in their annual returns plus additional information that organisations applying for charitable registration online must answer. The proposed questions cover topics such as safeguarding, data protection, loans and payments to related parties, and the use of commercial fundraising partners. The Charity Commission NI advises that the questions are designed to help it gather important information on individual charities and the charity sector as a whole. The format of the proposed new questions requires each charity to reveal if any trustee owes money to it, whether any of the charity’s assets are leased from a trustee, and whether a trustee has been paid for carrying out their role. These questions are already asked in the annual monitoring return, but will now be asked when applying for registration. The Charity Commission NI also intends to ask charities if they have reported a data breach to the Information Commissioners Office in the past year. It will also collect information on what percentage of charitable expenditure relates to charitable purposes for organisations of less than £250,000 a year. All of the new and revised questions Charity Commission NI propose to include in the registration application and the Annual Return Regulations 2019 are available to view in the consultation document. The public consultation will focus on the most significant questions, and will allow an opportunity to voice opinions on the proposed changes. The consultation process will run for eight weeks, closing on Tuesday 22 October 2019. The changes will be of particular interest to members working in the charity sector and those who are trustees of Northern Ireland charities. The consultation has arisen as a result of increased risks within the charity sector including safeguarding, cybercrime and fraud. These increased risks have had a negative impact on the public’s perception of the charity sector. A key role of the charity commission is to increase public trust and confidence in charities. The commission is of the opinion that the additional questions will increase transparency and, as a result, public confidence in charities. The recent safeguarding failures in some high-profile charities have highlighted the importance of trustees being aware of their responsibilities and the safeguarding standards expected of them. The commission has added questions in relation to the ‘expression of intent’ form that is completed by those waiting to be called forward for registration. The commission also proposes to add more questions to the classification section of the charity registration form. In this section, applicants describe their charitable purpose, the focus of the charity and the beneficiaries of the organisation. It is important that trustees understand their responsibilities in respect of the information filed with the Charity Commission. Trustees may delegate the task of submitting an application or annual monitoring form, but they cannot delegate the responsibility of making sure they are accurate and submitted on time. If an annual monitoring form is late, the register of charities shows them as being in default. Once submitted, the register will read “Due documents received late”. This is of increased importance as funders are now using the register to check if forms are being returned late and will look less favourably on charities that file late when awarding grants. As an advisor to a large number of local charities, and as a trustee of Action Mental Health and New Life Counselling, I firmly believe that this sector is invaluable. I therefore welcome any move to increase public confidence in the charity sector.  Angela Craigan FCA is a Partner with Harbinson Mulholland, the accountancy and business advisory firm.

Claire Fitzpatrick FCA looks back on her career, from trainee auditor to the frontier of blockchain technology innovation. What’s wrong with me?” For someone who has enjoyed a varied and successful career in professional services and large corporations, it might come as a surprise to learn that Claire Fitzpatrick asked herself that very question in her 30s as she watched her peers move into senior roles. “You just need to get on the track,” she was told – a less than subtle reference to the perceived linear path to CFO/CEO roles. But as Claire readily admits, this isn’t how she operates. The Dublin native has made serendipitous career moves since leaving PwC in 2000 to work with one of her audit clients, Point Information Systems, but the draw has never been status or salary. Instead, her career has been guided by two things – people and culture. Venturing out While working as a PwC Audit Senior with Point Information Systems, Claire saw the culture she wanted to work in – ambitious, fast-changing and transformative. “I remember coming back after a year and the company had changed completely, whereas some other companies I audited would be the same year-on-year,” she said. “It was evolving at pace and the energy there just stood out for me.” Claire joined the company and her role expanded her knowledge base in a variety of new disciplines from engineering to sales and marketing. This diverse exposure would be of great benefit to her later in her career, not least when she returned from a working holiday with Nestlé in Australia and New Zealand to a role in O2. The company was in expansion mode at the time and Claire managed to experience the full life-cycle from early adoption to the sale of the business, which she was centrally involved in. From there, Claire moved to Wayra, Telefónica’s start-up accelerator, to accelerate digital embryonic businesses. As Claire recalls, it was a move that raised some eyebrows at the time. “A lot of my peers thought it was a step down for me in career terms, but I really wanted to get involved in the innovative digital space,” she said. “It reminded me of the energy and pace I felt in Point Information Systems and I had experience of both start-up and corporate environments, so I was able to bring a lot to the table.” Start-up life In her first three weeks in Wayra, Claire met with hundreds of entrepreneurs and developers across the tech ecosystem and this intensity continued unabated for three years. The hub was a success, investing €6 million in the Irish start-up ecosystem including 33 equity investments while returning the same amount. “For early-stage start-ups, that’s a great return,” she said. However, following the sale of O2 to Three in 2014, Telefónica ultimately closed its Wayra hub in Ireland and Claire decided to take on a new challenge.  The idea of starting her own business had never entered her mind, but the closure of Wayra meant that Claire and her two colleagues faced a fork in the road. “We saw real value in what we were doing at Wayra, and we were good at it,” she said. “So, we decided to set up Red Planet and to flip the accelerator model on its head. We started with the corporate to understand the problem it was trying to solve, and then sourced the best start-up talent to solve that particular problem.” The venture was successful and it achieved what Claire describes as “the holy grail” for start-ups – being sold to a large corporate. Red Planet was acquired by Deloitte in 2017 and Claire continued to work with the firm for 18 months. “Selling our start-up was a tough decision, but the right one. Deloitte was really good at the strategy piece and identifying the challenges facing their clients, while Red Planet was able to find the solutions in the start-up world and develop them to scale. We were very good at curating diamonds in the rough.” Blockchain calling At this stage in her career, Claire faced an inflection point. Not content to simply go with the flow, she began plotting her next move when an opportunity arose to join a new blockchain venture headed by the co-founder of Ethereum, Joseph Lubin. The company was founded in 2014 and was at the forefront of Ethereum blockchain technology innovation. It needed someone to establish its base in Dublin and build its team, and the company ultimately chose Claire as its Director of Strategic Operations. The Dublin hub, which is known as ConsenSys Ireland, is developing the products that will enable society and enterprises to advance to the next level of blockchain adoption. Claire is very excited about the bigger picture. “In the future, you won’t even know you’re interacting with blockchain. It will be just like the Internet where nobody really thinks about or considers the infrastructure or protocols – they just see the applications,” she said. “Blockchain will be as transformational as mobile telecommunications was 25 years ago. We are part of a new industry, a new technology, new products, and a market which we have to create and educate. That’s a big challenge, but a very exciting one.” Leadership style But amid the excitement and potential lies ambiguity, and it takes a certain type of person to thrive in an ambiguous environment according to Claire. “Given the nascent nature of blockchain technology, we’re continually refining our vision and new industries are constantly wanting to explore new directions with the technology. So, although everyone in the company has goals to achieve, some are set in stone and some evolve to meet the needs of our clients,” she said. “That’s no different to a traditional organisation but we do differ in that we could have to tell staff to drop projects and pivot in a new direction at a moment’s notice – and some people find that challenging.” Luckily for Claire, working in a maturing industry adds to the allure of her new role in ConSensys – one she believes will contribute to a decentralised, democratised future for individuals. “It’s a rollercoaster, but with experience and age comes perspective and balance,” she said. “And the most important thing for me, throughout my career, has been the people I work with. My colleagues today are not necessarily wired like me but we work well together in the good times, and the challenging times, to make something great happen. That’s what it’s all about.”   Claire’s advice for Chartered Accountants Chartered Accountants will have a central role in the deployment of blockchain technologies and rather than wait for mass adoption, Claire believes the time to upskill is now. “The conversation around blockchain has moved from proof of concept to pilot schemes so when we’re talking to clients, we’re discussing real systems as opposed to hypothetical ideas,” she said. “So, I wouldn’t recommend waiting to start blockchain projects because we will reach the point of mass proliferation quicker than most people expect.” “The first step for all Chartered Accountants is education. There are free educational resources through ConsenSys Academy and Blockchain Ireland is working to raise awareness of what’s coming down the tracks,” Claire added. “But it’s vital that Chartered Accountants realise that anyone can quickly become a laggard in this dynamic environment.” “Finally, I would stress the point that Chartered Accountants don’t need to worry about losing their heads in the weeds trying to understand the programming and coding side of things,” she said. “They should educate themselves with regard to the characteristics and applications that they can see for blockchain in their business.”

Could joint audit help improve audit quality and reduce market concentration? By Tommy Doherty Joint audit is a proven means of facilitating the emergence of a diverse audit sector and, in the case of France, has already led to the creation of the least concentrated audit market of any major economy. If undertaken in a spirit of collaboration, it can reinforce governance arrangements on the conduct of audits and deliver real improvements in audit quality. What is a joint audit? In a joint audit, two separate audit firms are appointed by a company to express a joint opinion on its financial statements. It is fundamentally different from a ‘dual’ or ‘shared’ audit, whereby one audit firm (or sometimes more) audit parts of a group and reports to another audit firm, which ultimately signs off on the group audit. Statutory joint auditors must belong to separate audit firms. Joint audits usually involve two audit firms, but a small number of companies have decided voluntarily to appoint three audit firms to perform their joint audit. Joint audit, audit tendering and rotation The 2014 EU Audit Regulation introduced incentives to encourage the adoption of joint audit by allowing joint auditors to benefit from a longer rotation period (i.e. a maximum tenure of 24 years with no tendering required). By contrast, sole audits are subject to tendering after 10 years and a maximum tenure of 20 years. The preamble to the Audit Regulation states that: “The appointment of more than one statutory auditor or audit firm by public interest entities would reinforce the professional scepticism and help to increase audit quality. Also, this measure, combined with the presence of smaller audit firms in the audit market, would facilitate the development of the capacity of such firms, thus broadening the choice of statutory auditors and audit firms for public interest entities. Therefore, the latter should be encouraged and incentivised to appoint more than one statutory auditor or audit firm to carry out the statutory audit.” Nine member states have decided to encourage joint audit through an extension of the maximum tenure allowed, including (in addition to France) Germany, Spain, Sweden, Finland, Norway, Belgium, Greece and Cyprus. Joint audit has long been regarded as a French peculiarity. But in the context of significant corporate failures and unsustainably high levels of market concentration, the UK’s competition regulator, the Competition and Markets Authority (CMA), is now recommending the introduction of mandatory joint audit. In April 2019, it published The Future of Audit report, recommending mandatory joint audit as part of a broader reform package for most FTSE 350 companies with at least one of the joint auditors being a non-Big Four auditor. The benefits of a joint audit From the company’s perspective, joint audit: Enables companies to benefit from the technical expertise of more than one firm; Encourages “coopetition” (cooperation and competition) between joint auditors, resulting in improved quality of service; Leads to a real debate on technical issues and offers additional scope for benchmarking; Allows for the smooth and sequenced rotation of audit firms, where appropriate; and Retains knowledge and under-standing of group operations, which minimises the disruption caused when one audit firm is changed. How joint audit works in practice The practice of joint audit is well-established in France, as it has been a legal requirement there for over 50 years and has gone through several phases of evolution to reach a level of maturity ‘signed off’ by the market. The following steps explain how the joint audit of consolidated financial statements works for the audit of large French listed groups like BNP Paribas, and how it could work in Ireland and deliver similar benefits. Joint audit of consolidated financial statements is the most common form of joint audit, and a professional French auditing standard exists (NEP-100). Step 1 Determine the annual audit approach: the yearly audit approach is jointly determined and includes the preparation of a joint risk-based audit plan. A single set of joint audit instructions (i.e. a manual of the audit procedures to be applied on a coordinated and homogeneous basis to the group’s subsidiaries by each joint audit firm or network) is issued. In practice, both joint audit firms contribute to these documents, which are consolidated before joint approval of the overall audit approach. The audit approach is almost invariably the subject of a combined annual presentation to the group’s audit committee by the joint auditors. Step 2 Overall allocation of work between the joint auditors: whatever the basis of appropriation, a balance between each of the joint audit firms is sought. This is provided for by NEP 100, which stipulates that the audit work required should be split between the joint auditors on a balanced basis and reflect criteria that may be quantitative or qualitative. If a quantitative basis is used, the split may be by reference to the estimated number of hours of work required to complete the audit. If a qualitative basis is adopted, the split may be by reference to the level of qualification and experience of the audit teams’ members. Step 3 Allocation of work on the different phases of the audit: for the accounts of consolidated subsidiaries, for joint and single audit, the parent company’s auditors are deployed as widely as possible over its subsidiaries worldwide. The allocation of subsidiaries to one or other of the joint auditors may be based on business, product or geographical location criteria. When geographical criteria are used (countries, zones, etc.), each joint auditor is deployed over one or several territories. In the case of significant groups, the joint audit approach is often applied within each of the group’s businesses to ensure oversight by ‘two sets of eyes’ for each business line. Step 4 Levels of group audit reporting: up to four levels of group audit reporting are distinguished: individual entities; geographical zones or business lines (aggregating several entities); group financial and general management; and those charged with governance. For individual entities, for example, the auditor in charge of each entity is responsible for reporting the audit conclusions by way of audit summary meetings with the local management and for expressing an audit opinion on the entity’s consolidation package. Step 5 The group audit opinion on a joint audit: the joint auditors prepare a joint audit report addressed to the group’s shareholders, which is presented during its annual general meeting. The audit opinion expressed is a single joint opinion. Special provisions exist in the event of disagreement between the joint audit firms as to the formulation of their audit opinion. In practice, they are rarely needed.  Step 6 Joint and several responsibilities: each joint auditor is jointly and severally responsible for the audit opinion provided. The exercise of joint and several obligations implies that each joint auditor performs a review of the work performed by the other. The sharing and harmonisation of the audit conclusions and the audit presentation prepared for the audited entity constitute the first step in that review. In addition, the audit summary memoranda and working paper files for the engagement are subject to reciprocal peer review. The two most common criticisms of joint audit relate to the cost and the additional risks involved. However, most of the tasks brought about by a joint audit situation are highly value adding as they are dedicated to the ‘professional scepticism’ necessary to express an audit opinion. In practice, the additional cost is borne by the audit firms involved rather than being passed on to the audited entity. The UK as a benchmark In 2020/21, the EU audit reform will be up for review. The UK reform will strongly influence the dynamic of this debate. Given the importance of its financial market, decisions in the UK will also have an impact beyond Europe. The Commonwealth countries look to the UK for best practice financial regulation and adopt rules that they consider beneficial for their markets. More countries are therefore likely to seriously consider joint audit as a measure to diversify their audit markets. Mazars believes that the UK will go ahead with the reform and that other countries will start to seriously consider joint audit for large corporates as part of a package of solutions to improve audit quality and reduce market concentration. Interestingly, on 28 May 2019, the prospect of Ireland preparing a similar report on The Future of Audit was raised at a Joint Committee on Finance, Public Expenditure and Reform. As an audit firm with a proven track record in joint audit, we believe that this is a solution than can provide tangible benefits to all stakeholders.   Tommy Doherty FCA is Head of Audit and Assurance at Mazars Ireland.