In its response to the Call for evidence: timely payment, the Institute is not supportive of mandated real time payments of income tax and corporation tax. The Institute, under the auspices of the NI Tax Committee, made a number of recommendations in its response including that HMRC should set aside the current conversation on mandation of real time tax payments and should instead explore less challenging payment solution changes. The following recommendations were also made:- The conversation on real time payment of tax should take a step back to focus initially on voluntary payments – however this should only take place once up to date evidence and analysis, including wider discussions with UK businesses and taxpayers is conducted by HMRC, This should explore the appetite for voluntary payment and clearly set out the case for moving to real time payments which should be the last stage in the UK’s move to its version of Tax Administration 3.0; HMRC should provide an update on the outcomes from building into its systems and messaging functionality which compares in-year tax calculations with payments on account due; and Tax complexity continues to be a very serious issue which not only threatens the ability of the UK Government to meet its 10 year tax administration strategy but is also a serious impediment to successful further and future digitisation of the UK tax system starting with MTD for income tax in 2023 - a defined roadmap to tackle tax complexity, beginning with income tax first must therefore be established as a matter of urgency. Although this Call for evidence is badged as the opening of a conversation in this area with no decisions yet taken, it is clear that the Government is keen to move to a real time tax payments system in the future. The Institute will continue to put forward members views on this issue.  

According to new analysis from EY, GDP is not necessarily a good measure of how well a society is doing – and specifically, how well a country fares after the pandemic. Yannick Cabrol and Simon MacAllister suggest other considerations. Economists and public decision-makers have been relying too long on GDP to measure the health of our society. GDP assesses the overall size of the cake and excludes social indicators, which can lead to mistaken conclusions. After all, if a doctor checks someone’s temperature with the wrong tool, they may not make the proper diagnosis or propose the right treatment. Below are areas that must be considered when thinking about the impact of the pandemic on Ireland. The vulnerable At the onset of the pandemic, particularly during the initial lockdown, there was a great emphasis on the sentiment that “we are all in this together”. However, over the last 12 months, this has ceased to be the case. Instead, the pandemic had a greater impact on those already vulnerable, while others benefitted. Social inequalities The impact of the pandemic is very different to that of the financial crisis of a decade ago. But one area of similarity is that the burden of impact has fallen more acutely on the most economically disadvantaged in society. The health outcomes mimic the economic ones, with people in disadvantaged areas more likely to contract COVID-19 or suffer job loss or severe disruption. The disease itself has disproportionally affected the poorest people in our societies. In Ireland, those considered very disadvantaged are almost 50% more likely than the average citizen to contract the virus, while the most affluent are 30% less likely to contract the virus. Geographical inequalities Residents of Irish cities are 32% more likely to contract COVID-19. This can be explained by higher population densities, increased levels of social interaction, and the prevalence of younger, more mobile communities. This presents significant difficulties for decision-makers. Public health regulations need to be clear and simple to follow, but a centralised approach can sometimes be perceived as unfair and excessive for areas with lower incidence rates. The future will be shaped by diversity – of working patterns, of place, and of individuals. Technology will open new possibilities for towns and rural economies, and cities will become more time fluid with a greater emphasis on entertainment and socialising and less on routine and homogeneity. Sectoral inequalities Economic commentary and policy formation tends to focus on the exporting industries that are key to driving growth. But the pandemic has shone a light on the industries that form the backbone of the labour market: our public services and retail, leisure and entertainment industries. While public services have been among the least disrupted sectors, the accommodation, retail and entertainment sectors have endured a very difficult year. Lower paid jobs have been the most disrupted by COVID-19. The pandemic impacted nearly 90% of jobs in the hospitality sector at some point in 2020. Workers in that sector already had the lowest weekly earnings pre-COVID, at around €376 per week. Financial inequalities Unlike during the last major global recession, the main drivers of wealth – namely, stock prices and housing – have held up very well. The stock market performance reflects the acceleration of digital business models and the success of businesses in sectors such as information and communications technology and healthcare. As a result, COVID-19 has exacerbated the mismatch between the labour market and the stock market. In 2020, stocks increased by 15%, while the number of people employed decreased by 18% (excluding those temporarily supported by the Government). The result is increased financial inequalities. The pandemic is benefitting the few who have financial assets while disadvantaging the many who are struggling to keep or find a job. Those who have been able to work from home also managed to save more money than ever in 2020. The Central Bank of Ireland reports that Irish households saved over €14 billion in the year to December 2020, with total Irish household deposits reaching a record €124.5 billion at the end of the year. This contrast in wealth and labour market outcomes is just another example of disruption causing division and creating a disconnect between winners and losers. International inequalities Interestingly, more equal societies appear to be doing better in their fight against COVID-19. This may be linked to a greater willingness to invest in public health infrastructure as well as a commitment to delivering better living conditions for disadvantaged people. A fairer society is a goal sought by almost every economy in the world. However, the rewards for achieving such a goal have often been the subject of heated debate. Does a greater redistribution of wealth curtail an economy’s ability to grow or enhance it? Perhaps the impact of the pandemic will provide another reason, if one was needed, to strive for a fairer society. Yannick Cabrol is EY-DKM Economic Advisory Services Assistant Director in EY. Simon MacAllister is Strategy and Transactions Partner and Head of Valuation, Modelling and Economics in EY.

Through a new campaign, “1,000 Chartered Accountants”, launched today, Chartered Accountants Ireland, The Institute of Chartered Accountants in England and Wales (ICAEW), and The Institute of Chartered Accountants of Scotland (ICAS) are calling for 1,000 Chartered Accountants from within their memberships to commit to leading change by championing the UN Race to Zero campaign.   The professional bodies will promote and support these 1,000 Chartered Accountants who have committed to beginning their journey to net-zero carbon emissions by leading the way in their own organisations or by helping a client on a net zero journey. Commenting, Chief Executive of Chartered Accountants Ireland, Barry Dempsey said “Six years on from the Paris Agreement, the urgency of the climate crisis requires drastic action. This can be seen from the European Commission’s ‘Fit for 55’ packaged announced yesterday, the most ambitious multilateral climate strategy to date.  “Ambition needs to be translated into action and we are delighted to join ICAEW and ICAS in the “1000 Chartered Accountants” campaign. Accountants are uniquely placed to drive progress on sustainability on the ground in organisations. They make critical financial decisions daily about purchasing, procurement and many other things and the information they provide is vital to wider decision-making. From this position of influence comes opportunity and responsibility.” In committing to the campaign, signatories are pledging to reach net zero GHG emissions as soon as possible, and by 2050 at the latest, in line with global efforts to limit warming to 1.5C. Within 12 months, they must explain what actions will be taken toward achieving both interim and longer-term pledges, especially in the short- to medium-term. They are also required to report publicly both progress against interim and long-term targets, as well as the actions being taken, at least annually.  The UN Race to Zero campaign is an initiative of the United Nations Framework Convention on Climate Change ('UNFCCC'). It pulls together other initiatives from across the climate action community under a single umbrella to rally businesses, cities, regions, and investors to achieve a healthy, resilient, zero-carbon recovery - all goals of the Paris Climate Agreement - ahead of COP26 this November, at which governments will commit to being more ambitious in their climate action.  For more information and to join the 1,000 Chartered Accountants campaign, see.  ENDS      About Chartered Accountants Ireland Chartered Accountants Ireland is Ireland’s leading professional accountancy body, representing almost 30,000 influential members around the world and educating 7,000 students. The Institute aims to create opportunities for members and students, and ethical, sustainable prosperity for society. An all-island body, Chartered Accountants Ireland was established by Royal Charter in 1888 and now has members in more than 90 countries. It is a founding member of Chartered Accountants Worldwide, the international network of over one million chartered accountants. It also plays key roles in the Global Accounting Alliance, Accountancy Europe and the International Federation of Accountants.   Chartered Accountants Ireland members provide leadership in business, the public sector and professional practice, bringing experience, expertise and strict standards to their work for, and with, businesses in every sector. Chartered Accountants Ireland engages with governments, policy makers and regulators on key issues affecting the profession and the wider economy.  In Spring 2021, Chartered Accountants Ireland joined the United Nations Global Compact - the world’s largest voluntary corporate sustainability initiative. The Institute is committed to becoming the first carbon-neutral professional accountancy organisation in Ireland by measuring its carbon footprint and aggressively reducing its carbon emissions.