Sustainability

Survey confirms the need to support SMEs on their path towards digitalisation and sustainabilityA  ‘Flash Eurobarometer’ survey on SMEs by the European Commission shows that 62 percent of EU SMEs confront barriers to digitalisation and 70 percent of EU SMEs say they are facing at least one obstacle that prevents their enterprise from becoming sustainable.The survey was conducted among over 12,000 companies from all EU countries (and over 3,000 companies from 12 non-EU countries). It shows that 42 percent of EU SMEs say that the availability of support to help enterprises become more sustainable is poor. Other key findings are:About one in five SMEs cite 'lack of skills' among the barriers to engage in more sustainable practices, digitalise, and innovate. Stimulating demand for green products and services is also an issue in the transition to sustainability, as a lack of customer demand (30 percent) comes out on top of the barriers to sustainability that SMEs face. A lack of financial resources is the next most cited barrier.SMEs report that the biggest problems they face areregulatory obstacles or administrative burdens (55 percent), payment delays (35 percent), poor access to finance (21 percent) and a lack of skills (17 percent).Click here for more information on the SME strategy for a sustainable and digital Europe 

Sep 30, 2020
Sustainability

The Irish Forum on Natural Capital (IFNC) is a group of organisations and individuals from academic, public, private and NGO sectors, interested in the development and application of the natural capital agenda in Ireland. Among its Board members is former Chartered Accountants Ireland Chief Executive, Pat Costello; and on its Steering Committee is advisor to Chartered Accountants Ireland's Expert Working Group on Sustainability, Bernadette Phelan. IFNC, along several others, are leading a study for the Department of Culture, Heritage and the Gaeltacht (DCHG) and the Department of Business, Enterprise and Innovation (DBEI) to examine how Irish businesses can be a part of this global conversation. It has asked business to help by participating in a survey and will co-host a webinar for the Business and Biodiversity project on Tuesday, October 6th, 2020, alongside Business In The Community Ireland.

Sep 30, 2020
Sustainability

The 2020 edition of the OECD Business and Finance Outlook focuses on sustainable and resilient finance, in particular the environmental, social and governance (ESG) factors that are rapidly becoming a part of mainstream finance. It evaluates current ESG practices, and identifies priorities and actions to better align investments with sustainable, long-term value – especially the need for more consistent, comparable and available data on ESG performance.The COVID-19 pandemic has further highlighted the urgent need to consider resilience in finance, both in the financial system itself and in the role played by capital and investors in making economic and social systems more dynamic and able to withstand external shocks. Access the publication here.

Sep 30, 2020

Developments of interest this week are outlined. UKThe UK Financial Reporting Council (FRC) has published two thematic reviews to help companies improve the quality of their corporate reporting in relation to IFRS 15 'Revenue from Contracts with Customers' and IFRS 16 'Leases'. The UK Stewardship Code 2020 sets high expectations of those investing money on behalf of UK savers and pensioners in 12 Principles for effective stewardship. One of the important changes is the introduction of the new annual Stewardship Report. The recently issued Review of Early Reporting seeks to help prospective signatories in their planning by reiterating the expectations for high quality disclosure published in the Code.The UK Endorsement Board invites preparers of financial statements to participate in a survey on IFRS 17. EuropeanThe European Intellectual Property Office (EUIPO) and Accountancy Europe have come together to provide guidance and promote the benefits of Intellectual Property registration to SMEs.The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published the Final Report on the MiFID II/MiFIR transparency regime applicable to non-equity financial instruments.InternationalThe IASB has updated its work plan, which has been analysed to see what changes have resulted since it was last revised in August 2020.In the recent workshop on the IASB Exposure Draft 'General Pre­sen­ta­tion and Dis­clo­sures', different preparers​ discussed potential im­ple­men­ta­tion and ap­pli­ca­tion concerns and the possible need for ad­di­tional guidance. The summary report​ on the EFRAG website has been prepared for the con­ve­nience of European con­stituents to summarise the input from the workshop and will be further con­sid­ered by the involved or­gan­i­sa­tions in the re­spec­tive due process on the IASB proposals.The Technology Working Group of the IAASB has released non-authoritative support for using automated tools and techniques when performing audit procedures.      

Sep 30, 2020
Management

John Convery discusses the important elements when creating a start-up and how you can improve its chances of success.Entrepreneurship is actively promoted and regularly encouraged. Being a business owner can be very fulfilling but starting a business is no easy task. This is a journey where you will meet a rollercoaster of highs and lows. It is a challenging, demanding, frustrating, testing, isolating, lonely, long road on the way to – hopefully – profitability and success.Research suggests 20% of start-ups fail in year one, just under 50% make it to year five, 66% have failed by year 10, and by year 15 only 25% are still surviving. Some businesses deemed to survive merely limp along for years, often referred to as 'the living dead'. However, with the right planning, mindset, and funding, improving start-up survival rates is achievable.Why start-ups failThere is a myriad of reasons why start-ups fail. In my view, it is usually due to a combination of factors rather than just one. Figure 1 summarises the most common reasons start-ups fail. They are broken into four areas:  market, founder, finance and other.Improving your chances of successTo improve your chances of having a successful start-up, you must get some fundamentals right.Sell a product/service that customers want A key reason start-ups fail is because there is an insufficient market need for the product or service. This can be mitigated through focus on the customer from the start. You must be customer-centric before you build, design, or develop anything. Take the time to put your ideas down on paper, and then go out to customers.Talk to potential customers or users, listen to them, try to identify their biggest pain points or struggles. Do market research.Build a basic, early version of the product.Go back to some potential customers, get their views and feedback.Refine, modify and enhance your product based on the feedback. Go back to potential customers again, get their views and any further changes or improvements needed.Enhance your product again.It is only with constant feedback and user reaction that you can improve the product and arrive at a point where it can begin to appeal to potential customers. It is a test and feedback loop. After the testing is done, you will begin to get a feel for a business model and pricing.Create a balanced teamFind good people with complementary skills who gel with one another – preferably a designer, engineer and marketeer. Teams build companies, not individuals. Investors also want to see a team, not a single founder.Control cashflow tightlyIt’s the job of the main founder or appointed finance person to make sure the company does not run out of money and to control finances tightly.Write a business plan The process of writing a business plan is not an academic exercise, it is a validation exercise on the product and overall business. The business plan should corroborate whether the product and overall business has potential. Appoint a savvy external business mentor or adviserTheir role is to ask hard questions, challenge you, objectively evaluate progress against targets set and hold you accountable. This person should not be a close relative or friend.Is entrepreneurship right for you?Creating a start-up is not for everyone. Like any career choice, not everyone is cut out for certain roles. It may not suit your interests, temperament, passion, or skills. The requirements or skillset for an entrepreneur are not specified, yet the skills required to be successful are rarely discussed other than in academic textbooks.Your character and resilience will be severely tested in a start-up, especially in the early stages. Delays, disappointments, criticism, rejection, frustrations, travel, endless presentations, knockbacks and 80-hour weeks with little pay is what a founder is facing. Fundraising is arduous, where it can take six months of meetings, calls, presentations and visits to secure investment. This takes a toll on you mentally and physically, and your ability to face these knocks and challenges while remaining optimistic is difficult. Successful entrepreneurs show some essential personality characteristics such as patience, an ability to listen, learn, accept criticism, and stay positive. They are a people person, and able to get along and deal with all types of individuals. Failure does not defeat them, and they learn from mistakes. They can take things in their stride and are willing to adjust or pivot when required. Successful entrepreneurs possess drive, ambition, and determination.Anyone who might be considering creating a start-up should do some self-examination as part of the planning. They need to ask themselves honestly if they have some or any of the requirements that an entrepreneur needs to have. Ask yourself questions such as:Do I have that entrepreneurial drive and determination?Am I cut out for this?Why do I want to start a business? You should only start a business for the right reasons. Self-indulgence, fulfilling a dream and pleasing someone else are not valid reasons.You fail and you learnThe aim of a start-up is to solve a problem for a customer. The customer comes first. Your starting point is talking to customers, discovering their pain points, and then using that feedback.If you are not getting good market traction, be prepared to pivot and change. If the business is still struggling to get off the ground, be prepared to disengage. This can be a difficult decision but necessary. You can always start again. Remember: you will pass failure on the way to success. A failed start-up is a valuable lesson. You fail, you learn, you start again and you do things better.I believe it is possible to improve start-up survival rates with good planning, the right mindset, and a funding plan. If your product/service is good enough, you will always secure funding. While the risks of failure in a start-up are high, the entrepreneurial spirit will nevertheless always be alive.John Convery FCA is a business adviser to start-ups and small businesses.

Sep 30, 2020

 Stress and anxiety are often mentioned together, but they’re not the same thing. In fact, anxiety can be caused by stress – it’s what you feel when you’re uneasy about something, when you worry or when you’re afraid.Most people experience some level of anxiety from time to time. In many situations, feeling anxious is perfectly normal – if you’re taking your driving test, for instance, or going for a job interview. But once the situation has passed, your anxiety should disappear too. It becomes more of an issue when you feel overwhelmed by anxiety on a more frequent basis – or all the time.Anxiety can cause a range of physical and emotional symptoms, such as:Faster breathing or shortness of breathIncreased or irregular heart rateFeeling tired but not being able to sleepLight-headedness or dizzinessHeadacheFeeling restless, unable to concentrateSweating or having hot flushesFeeling constantly on edgeFearing the worst (having a sense of dread)Feeling that other people are looking at youNot being able to stop thinking about negative thingsNot being able to motivate yourself Anxiety levelsMild anxietyGenerally speaking, mild anxiety is the type that most of us experience on a day-to-day basis during certain situations. You may have an uneasy feeling in your stomach, and you may feel your pulse increase slightly. But anxiety at this level can also be beneficial, as it can help you to focus and increases your alertness.Moderate anxietyModerate anxiety is similar to mild anxiety but can become more severe and overwhelming, making you feel more nervous and agitated.Moderate anxiety can mean you place your complete attention on the thing or situation that’s making you feel anxious and ignore everything else around you. You may start to experience stronger physical and emotional anxiety symptoms such as muscle tension, sweaty palms, a shaky voice, back pain and changes in your sleep pattern. Emotionally you may feel more sensitive and excited than normal, and you may also feel less confident.Severe anxietySevere anxiety is the highest level, when you stop being able to think rationally and experience severe panic. You may feel afraid and confused, agitated, withdrawn and you may also find it difficult to think clearly. Your breathing may quicken, and you may start to perspire while your muscles will feel very tense.Anxiety disordersThere are also several anxiety disorders, including generalised anxiety disorder (GAD). Unlike being anxious about a specific thing or situation, GAD is when you feel anxious about lots of different issues, often for no good reason.Post-traumatic stress disorder (PTSD)Post-traumatic stress disorder (PTSD) is a specific type of anxiety, where you feel very stressed or fearful about something traumatic that’s happened to you.Panic disorderPanic disorder is when you have panic attacks on a regular basis. A panic attack can make you feel nauseated, sweaty, shaky and lightheaded, and you may feel your heart beating very quickly or irregularly (palpitations). They may not be harmful in a physical sense, but panic attacks can be very frightening.PhobiasPhobias are also a type of anxiety disorder. You may have a phobia when you have an overwhelming or exaggerated fear of something that normally shouldn’t be a problem. Depending on what type of phobia you have, it can seriously affect your daily life as well as cause a great deal of distress.Social anxiety disorder – or social phobia – is a type of phobia where you have an intense fear of social situations.If you think you may have the symptoms of an anxiety disorder or if anxiety is a constant issue in your life, it’s important to get the advice of a qualified healthcare professional. CA Support has a confidential listening service and is here to support our students, members, and their families. Contact the CA Support team on mobile: (353) 86 024 3294 or email:  casupport@charteredaccountants.ieThis article was kindly provided by CABA

Sep 30, 2020

When I failed SFMA and Financial Reporting, it felt like an unexpected break-up. I hadn’t anticipated failing. All that time invested in study and now I had to start all over again!Work smarter, not harderBut that’s just it- you’ve already put in the hard work and laid the foundation. You are not starting from scratch. This time round it’s about working smarter, not harder. Use your time and energy wisely.Take a few days for yourself if you need to. It is a form of loss and can be a very lonely time. Talk things through with supportive people, indulge in some self-care and do things that make you happy.I remember the Partner in my Department calling me at the time and encouraging me to “get back up on the horse!”. That’s what I did and know that you can, too.Ways to get back on trackCapitalise on the time and energy you’ve already invested studying by preparing for the repeat in the following ways:Boost your confidence. It’s helpful to write down all of your achievements to date, as far back as you can remember. Look at them- aren’t you proud? Reflect on your study routine and exam technique. Be honest with yourself:-What do you need to do more of? What do you need to do less of?-What should you do differently?-What can you start doing?-What must you stop doing altogether?  You know best! What resources are available to help you?You are not on your own with this challenge. Utilise the resources available to you, which include:-          Role models- Senior colleagues may surprise you by sharing their stories of failure with you. When I realised that others ahead of me had failed, I felt less alone and also realised that I could still advance in my career even after this set-back. You can learn from others how they achieved success when it seemed impossible. -          Additional classes and grinds-Taking additional classes run by Chartered Accountants Ireland was really valuable. A group of us who were repeating also arranged a day of grinds which was very beneficial. -          Help from colleagues and peers- Reach out to people who have sat exams recently. I received a great deal of support from colleagues the year ahead of me when I struggled with past paper questions. Don’t be afraid to ask for help and advice. Most people will be happy to assist, as they’ve been there too! You might also arrange calls and study sessions with others who are repeating where you can share thoughts. -          CA support- CA Support are here to assist you and can be contacted on email at casupport@charteredaccountants.ie or on 01 637 7342 or 086 024 3294.  There are also other video supports and articles available on our site.  Ease back into study by reading relevant articles that make the subject come to life for you and keep it interesting. Make it an activity that you enjoy and build your confidence back up this way! While the process is still fresh in your mind, going through as many sample questions and past papers as you can may be easier than immediately going back to the text books.  Take time for you every day. Your well-being is more important than anything else, so do something that you love daily. Prioritise yourself and make sure that you eat well, get enough exercise, fresh air and rest. It sounds simple, but it’s easy to have tunnel vision when in study-mode.And finally…This experience is a tough one to go through. It might feel very unfair, stressful and worrying. Please know that even if it doesn’t seem like it right now, it will all come together in the end and although it sounds cliché, you will be stronger. You may become a future specialist in an area because of the additional time you’ve had to spend studying it! Opportunities can come from the most surprising places. As you continue your studies, celebrate the results that you have already achieved in your life!By Charlotte Keating. Charlotte is a Chartered Accountant and the founder of Act On It Coaching, www.actonitcoaching.comCA Support is here to support our students, members, and their families. Contact the CA Support team on mobile: (353) 86 024 3294 or email:  casupport@charteredaccountants.ie 

Sep 29, 2020
Audit

The Technology Working Group of the International Auditing and Assurance Standards Board (IAASB) has released non-authoritative support for using automated tools and techniques when performing audit procedures.  The publication assists auditors in understanding whether a procedure involving automated tools and techniques may be both a risk assessment procedure and a further audit procedure. It also provides specific considerations when using automated tools and techniques in performing substantive analytical procedures in accordance with International Standard on Auditing 520, Analytical Procedures. This publication does not amend or override the ISAs, the texts of which alone are authoritative. Reading the publication is not a substitute for reading the ISAs.

Sep 29, 2020
Tax

A few weeks ago we advised that the Trader Support Service (“TSS”) was expected to be launched in late September. The free to use digital service went live yesterday and the UK Government is now encouraging businesses to sign up to the service with fewer than 100 days to go until end of EU transition period. The service can be used by any business moving goods between GB and NI or bringing goods into Northern Ireland from outside the UK. This Institute continues to engage with both Government and HMRC as 1 January 2021 approaches.HMRC is also in the process of writing to VAT-registered businesses in Northern Ireland highlighting actions they need to take to prepare for new processes for moving goods under the Northern Ireland Protocol from 1 January 2021.According to HMRC, the benefits of the TSS are two-fold:-Traders who sign up to the Trader Support Service will be guided through the new processes under the Northern Ireland Protocol and can also use it to complete digital declarations to manage import and safety and security declarations on their behalf; and/orThe service will educate businesses on what the protocol means for them, and the steps they need to take to comply with it. This will include online training sessions and webinars, with information being continually updated as we move closer to 1 January 2021.This means a business can choose to use the TSS in a way that suits it; either by using it to complete the relevant digital declarations and/or skill up on what the protocol means for their business.

Sep 29, 2020

In response to queries from members, Chartered Accountants Ireland asked Revenue to clarify the interaction of tax clearance and the surcharge suspension if availed of last Wednesday, 23 September. We also asked Revenue to clarify if the tax payment date for income tax returns already filed can be amended to 10 December. For taxpayers who could make the corporation tax deadline last Wednesday and rely on the surcharge suspension, will this impact their access to tax clearance for the EWSS and eligibility for the debt warehousing scheme? Revenue's response:Tax clearance is required in order to the register for the Employment Wage Subsidy Scheme. It is not a requirement for debt warehousing, however those availing of warehousing are required to keep their tax affairs up to date. Revenue has previously emphasised the importance of employers acting early to ensure they obtain tax clearance if they wished to participate in the scheme from 1 September and that applications could be made quickly and easily online through the eTax clearance (eTC) system in ROS or MyAccount. The application system contains a dropdown menu of categories which includes EWSS as an option. The eTC system operates in ‘real time’.  Once completed and submitted, Revenue assesses the application. Successful applications are confirmed on the screen within a few seconds.  Similarly, any employer who does not meet the requirements for tax clearance will be shown the reason why the application was not successful. Once the outstanding matters are addressed the business can then reapply for tax clearance. “Connected persons” as defined in sections 1094 and 1095 TCA 1997 must also have tax clearance. Filing of CT returns forms part of the tax clearance process.  In very limited or exceptional circumstances it may be possible to obtain temporary tax clearance where an employer/agent cannot meet the requirements for any reason including the filing of any return required that is advised by Revenue to the applicant when the eTC application is made online. These are considered on a case by case basis. The employer / agent will need to contact the Collector General’s Division either through myEnquiries or telephone 01-7383663 as soon as possible and outline the reasons as to why they cannot address the outstanding matters, agree a timeframe as to when they will submit the outstanding return and enter into a phased payment arrangement with Revenue (for debts that do not qualify for the debt warehousing arrangement). In all circumstances the employer needs to regularise their tax affairs and have tax clearance before an EWSS subsidy in respect of September payrolls will be processed by Revenue (in mid-October).Further information on applying for  tax clearance  is available at  www.revenue.ie/en/starting-a-business/tax-clearance/index.aspxCan a taxpayer who filed a tax return for 2019 on ROS with a payment scheduled for 12 November now change the payment to 10 December?  Revenue's response:A taxpayer who filed a tax return for 2019 on ROS with a payment scheduled for 12 November can change the payment to 10 December. The date can be changed upon customer contact via My Enquiries (selecting ‘Other than the above’ and from the ‘more specifically’ menu, select ‘Revenue On-line Service (ROS) Payments’).  We would urge customers to make contact now, but in any event no later than 9 November to allow sufficient time for Revenue systems to update.The Pay &File Payment reminder notice issued to ROS inboxes over the weekend which includes the MyEnquiries details for any payments queries.

Sep 28, 2020
Public Policy

In today's Public Policy news, read how the Government’s new Investment Limited Partnership (Amendment) Bill will make Ireland’s international financial services sector more competitive; how Ireland’s living wage is set to remain unchanged at €12.30; how concerns about deforestation and climate impact are affecting the EU-Mercosur Trade Deal; and how, in the first truly co-ordinated approach to ESG reporting, the World Economic Forum has joined forces with Big Four accounting firms to create an ESG reporting standards framework.Bill to modernise Ireland’s international financial services sectorThe Irish Government has approved the draft text and publication of the Investment Limited Partnerships (Amendment) Bill 2020. This Bill will modernise the Investment Limited Partnership Act, 1994. It will enhance the development and competitiveness of Ireland’s international financial services sector, making it more competitive and enriching its regulatory environment. Among other things, the Act will also extend anti-money laundering beneficial ownership requirements to Investment Limited Partnerships and Common Contractual Funds, and will provide relevant powers to the Central Bank to verify PPS numbers relating to beneficial ownership registers. The Bill also makes some technical amendments to the Irish Collective Asset Management Vehicles Act of 2015 to enhance the efficiency of the structure and also align it with the Companies Acts. This modernisation is a longstanding priority of the ‘Ireland for Finance Strategy’. Launched in 2019, this is Ireland’s strategy for the development of Ireland’s international financial services sector to 2025. Its vision is to make Ireland the location of choice for specialist international financial services. One of its aims is to grow employment in the sector to 50,000 people (up from 44,000 people directly employed in the sector at the end of 2018), and increase Ireland’s ranking as a financial services centre at a global and EU level. Minister for Finance, Paschal Donohoe TD, described the Bill as “an important step to maintain Ireland’s place as a leader for investment funds in Europe…[and] as a means to promote investment and Ireland’s competitiveness and sound regulatory environment in international financial services [the need for which] is more acute in the wake of the economic impact caused by COVID-19’.The full text of the Bill can be found here. No recommended changes to Ireland’s Living Wage Rate There is to be no change to Ireland’s Living Wage rate of  at €12.30 per hour for 2021. The announcement follows fresh calculations on living costs and taxation by the Living Wage Technical Group (LWTG), a technical group that works to establish a methodology for calculating the Republic of Ireland Living Wage. Established in 2014, the LWTG defines a living wage as “an hourly wage rate that should provide employees with sufficient income to achieve an agreed acceptable minimum standard of living”.  Any changes to the rate is determined by a fluctuation of living costs and taxation.According to a member of the LWTG, Dr Micheál Collins, a number of employers have voluntarily committed to paying the living wage, with some having increased this wage during the lockdown. It is not legally binding; however, the Programme for Government specifically aims to “progress to a living wage over the lifetime of the Government.”The current minimum wage, which is legislated for, is €10.10 per hour. Concerns about Mercosur-EU Trade Deal Following a meeting of EU trade ministers in Berlin, Tánaiste Leo Varadkar expressed concerns about the Mercosur trade deal between the EU and the South American countries of Brazil, Argentina, Paraguay and Uruguay, specifically around climate commitments and ongoing deforestation.The draft deal between the EU and Mercosur was agreed in principle last year following two decades of negotiations. It still needs to be ratified by all 27 EU Member States, including Ireland. Despite Brazil’s rejection of claims that the trade deal would increase destruction in the Amazon rainforest, a growing number of  trade ministers have reportedly expressed reservations about ratifying and implementing the trade deal without “cast-iron and enforceable guarantees from South American governments that they are going to honour their obligations on climate action and on protecting the Amazon”.Echoing German chancellor Angela Merkel “considerable doubts” last month over whether to back the trade deal due to worsening deforestation in the Amazon, Mr Varadkar said: “We don’t want a trade agreement that actually encourages more deforestation and more damage to our environment.” Big Four Firms and the World Economic Forum jointly release new ESG reporting framework The Big Four accounting firms and the World Economic Forum have released guidelines for sustainability reporting in corporate financial statements, in what was described as the first truly co-ordinated approach to ESG reporting. The resulting whitepaper Measuring Stakeholder Capitalism, Towards Common Metrics and, Consistent Reporting of Sustainable Value Creation identifies 21 core sustainability metrics and 34 expanded metrics and disclosures. These are organised under four pillars, or principles that are aligned with the UN Sustainable Development Goals and principal ESG domains: Governance, Planet, People and Prosperity.“These are the ones that we truly believe as a business community are the right measures to start with,” Bob Moritz, head of PwC, said.The metrics are deliberately based on existing standards to bring greater comparability and consistency to the reporting of ESG disclosure. The report issued guidelines, divided into the four domains. It also called for companies to move details about their ESG impacts into their mainstream annual financial reports and for the information to be verifiable and as reliable as financial metrics. The current common practice is for companies to report on ESG in separate, voluntary sustainability reports not verified by a third party.The initiative was spearheaded by the International Business Council (IBC), a community of over 120 CEOs. Members of the IBC were urged to take the lead in embracing the guidelines and are expected to discuss a timeline for adoption at the Council’s January meeting in 2021.Read all our updates on our Public Policy web centre.

Sep 28, 2020
Tax RoI

The Government has approved the draft text and publication of the Investment Limited Partnerships (Amendment) Bill 2020. The aim of the Bill is to promote investment, secure Ireland’s competitiveness and enhance our regulatory environment in international financial services. The Department of Finance issued a press release on the publication of the Bill. 

Sep 28, 2020

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