By Jason Collins, Founder and Chief Executive at CollSoft. Reporting the correct payment date to Revenue One of the key requirements under PAYE Modernisation is to report all payments made to employees on or before the date of payment to Revenue. Many employers are reporting in advance of making payments as required, but the dates that they are reporting are not the actual dates on which the payment is being made. This is particularly important in 2021 because of the way that the Revenue calendar falls. A payment made on Thursday 7 January is a Week 1 payment whereas a payment made on the Friday 8 January is a Week 2 payment. From a Revenue perspective, the only thing that matters is the date that the employee is paid – not when they earned that payment. Many employers operate their payroll on the basis of the date the employee worked rather than the date they are paid which means that, in many cases, employers are not reporting their wages correctly to Revenue. The beginning of a new tax year is an ideal time for an employer to re-align their payroll calendar with Revenue’s. Employees preliminary end-of-year statement now available Employees are now able to request their preliminary end-of-year statement for 2020 via their Revenue MyAccount. These preliminary statements will calculate any PAYE and USC liability that employees may have as a result of payments received under the Temporary Wage Subsidy Scheme or the Pandemic Unemployment Payment. Revenue have confirmed that while employees can now fully or partially pay this liability using RevPay in their Revenue MyAccount, they also have the option to allow Revenue to collect this liability interest free by reduction of their tax credits over a four year period beginning in January 2022. Revenue have published detailed statistics on their website showing the impact of the Temporary Wage Subsidy Scheme (TWSS) and the Pandemic Unemployment Payment (PUP) on employees year-end liabilities at Preliminary End of Year Statements (PEOYS) Statistics. Employers will be able to make payments towards an employees 2020 tax liability Revenue will facilitate employers who wish to make a contribution towards employees' 2020 tax liabilities that have arisen due to the payment of TWSS in 2020. Revenue will not apply the usual benefit-in-kind (BIK) rules to these payments but employers should be aware that these payments would not be regarded as wholly and exclusively incurred for the purposes of the employer’s trade or profession, and therefore they will not receive a deduction for corporation tax purposes. If employers wish to make a payment towards their employee's 2020 tax liability, they will need to engage directly with the employee in order to determine the amount of PAYE and USC that is being paid. The preliminary end of year statement will help in this regard. There are two methods by which the employer can make a payment towards the employee's tax liability: Make a payment directly to the employee. the employee must then pay their tax liability using RevPay in myAccount. -or- The employer can amend their last 2020 payroll submission to report the amount of PAYE and USC being paid. This will trigger a revised monthly statement for December and the money will be collected by Revenue in the normal manner. Employers will have until the end of June 2021 to avail of this facility and they will be required to keep some documentary proof showing the engagement with the employee and the arrangements agreed in order to undertake these payments. More information is available on the Revenue website here. BIK on company vehicles during the current Level 5 lockdown In March 2020, Revenue introduced a short-term concessionary measure in relation to the operation of benefit-in-kind (BIK) on employer-provided vehicles having regard to the unprecedented situation arising as a result of the COVID-19 pandemic. The concessionary treatment applicable to BIK on employer-provided vehicles, along with all other COVID-19 related measures, is kept under regular review by Revenue. In early December 2020, and as the public health restriction at the time began to ease and businesses reopen, Revenue confirmed that the concessionary measure related to employer-provided vehicles would cease to apply on 31 December 2020 and, with effect from 1 January 2021, BIK on same should be calculated in the usual manner. However, since then, Level 5 public health restrictions have been subsequently introduced. On 24 December 2020, all restaurants, cafés and gastro pubs as well as personal services, such as hairdressers, beauticians and barbers closed, while hotels, guesthouses and B&Bs remain open but are restricted to essential non-social and non-tourist services only. Additionally, on 31 December, all non-essential retail as well as gyms, leisure centres and swimming pools closed. For employees, the public health advice is to work from home in all instances unless work is an essential health, social care or other essential service that cannot be done from home. Having regard to the current public health restrictions, the short-term concessionary measures announced back in March will remain in place. This means that: where an employer takes back possession of the vehicle and an employee has no access to the vehicle, no BIK shall apply for the period. where an employee retains possession of a vehicle, but the employer prohibits the use of the vehicle, no BIK shall apply if the vehicle is not used for private use. Records should be maintained to show that the employer has prohibited its use and no such use has occurred. For example, communication from the employer, photographic evidence of odometer, etc.  where an employee has a car provided by his or her employer and:  the circumstances in the previous example don’t apply. a limited or reduced business mileage (if any) is undertaken due to the COVID-19 crisis; and personal use is limited. The amount of business mileage travelled in January 2020 may be used as a base month for the purposes of calculating the amount of BIK due. Thus, the percentage applied in the calculation of the cash equivalent, which is based on annualised business mileage, may have regard to the actual business mileage for January 2020 for the current period of the COVID-19 restrictions. Appropriate records should be kept. For example, business mileage travelled in January, amount of private use, photographic evidence of odometer, etc. Due to the nature of the Covid-19 pandemic it is not known how long any COVID-19 restrictions will ultimately remain in place. Revenue will, however, continue to regularly review all COVID-19-related matters (including the provisions relating to BIK on employer-provided vehicles) and, if any further measures are considered necessary in the future, updated guidance will be made available by Revenue in relation to same as soon as possible. There are other concessions where an end date of 31 December was attached just prior to most recent Level 5 lockdown and these are under review.  (This article is sponsored by CollSoft Payroll. Please note that although the information above is correct at the time of writing, circumstances may change. It is therefore advisable to seek professional advice on such issues.)

Jan 15, 2021

Sustainability and ESG initiatives are a hot topic for 2021. But how can companies successfully implement them? Judith Kelly outlines four new roles on the market that bring sustainability to the forefront. Climate action is now a priority item on every board agenda. In 2020, we witnessed a dramatic escalation in activity and real urgency from every sector to plan and implement the relevant sustainable finance and Environmental, Social and Governance (ESG) initiatives. Further, the Irish government continues to position Ireland as a hub for green finance as part of the ‘Ireland for Finance’ strategy. Investors are increasingly using non-financial factors such as ESG standards as an important part of their investment screening process. The challenge for us is to understand what new positions are being created, and how we source relevant candidates when established and experienced talent pools do not already exist. By working closely with key stakeholders within client companies – including boards, executive management and investors – to understand recruitment needs, we have been able to identify four main roles and several related positions that you can expect to see this year. Chief Sustainability Officer The Chief Sustainability Officer will become a key leadership role within every organisation of sufficient scale. The office will sit alongside Risk, Finance, Treasury, Corporate Finance, and Internal Audit as a key corporate function. The office will be responsible for building sustainability frameworks and programmes across all parts of the business and embedding people to manage and setting a proactive and positive sustainability culture across the organisation. ESG Strategy Director Large corporates from all sectors are aiming to build sustainable practices into every part of their business from procurement, to supply chain and operations, to manufacturing, to packaging. You will also see a call for ESG Integration Director/Managers. ESG Investment Director/Manager/Analyst With financial services firms looking to ramp up sustainable investment research and product offerings, many need investment managers with sustainability knowledge and expertise. Similar roles such as Head of Sustainable Investment and ESG Finance Lead will also feature in 2021. Chief Impact Officer/Director This role is to oversee the measurement, verification, management, reporting and improvement of the company’s social and environmental impact and the value that these will deliver to stakeholders. You could also see listings for ESG Reporting Manager as well. Judith Kelly is a Director at FK International.

Jan 15, 2021

Attracting and retaining talented people is always a challenge, but there are specific features of family businesses that deserve special consideration. Liam Lynch reflects on how family businesses can attract and retain the brightest and the best. Talented people are the backbone of any great business. Having the right people in place is the difference between mere survival and success. A significant challenge that faces many family businesses as they plan for sustainable growth is the ability to attract and retain executive and managerial talent.  Competing in the ‘war for talent’ As a family business grows, the appetite to tap into skill sets that are outside the family is also likely to expand. In a high employment economy, the competitive experience of engaging in the ‘war for talent’ is intense. Many family businesses find that the ability to attract and retain the skills needed throughout their business is now one of their main concerns. The competition to hire and retain good people can be fierce. While family businesses must navigate the same ‘war for talent’ environment faced by all employers, finding people with both the right skills and the right cultural fit can feel like an overwhelming barrier. The vast majority of families are committed to maintaining family ownership of the business. The structure of remuneration packages on offer to attract talent can be more limited than businesses with other ownership forms. Share-based remuneration incentives can tend to be off the table, and even if they are not, the exit mechanisms can be both complex and uncertain. Therefore, it is essential that the business effectively builds and communicates its value proposition to prospective employees; what it means to be a family business and why it’s a good thing to work for one. This might include, for instance, the commitment of a community embedded family business to both its staff and, by extension, the local community. This commitment might be demonstrated by higher levels of investment in training and corporate responsibility, as well as the prospect of relatively fewer redundancies during tougher times. Common recruitment issues Proper planning can help family business owners put a framework in place that not only addresses common business issues but may also prevent potential disputes within the family. With the right policies, practices, and strategy, the sky’s the limit for attracting the best talent and retaining great people, while at the same time preparing the next generation of leaders within the family. Consider some of the following common issues in developing a broad-ranging strategy to attract and retain the best talent: Compensation – Are you offering competitive compensation? Ensure that your reward packages, including remuneration plans, are based on market-driven data. Do family members enjoy opportunities or bonuses not available to other employees? Training – Do you have adequate training in place to prepare the next generation to take over leadership roles and responsibilities? Does every employee have access to the same level of training and development for their role, regardless of family status? Decision-making – Who is involved in designing compensation packages or making hiring decisions? Do those in decision-making roles have the qualifications required and the independence needed? Governance – Is your board of directors made up of family and non-family members? Do you have an adequate succession plan in place? Have you identified all the areas of risk for your business – from economic to competition, loss of talent and cyber security? HR policies – Are there clear performance review frameworks for both family and non-family employees providing opportunities for development and progression for both? Are the policies, standards, and expectations the same for all employees? Is the workplace an equitable environment overall? Communication – Is information communicated clearly and to all levels within the business? Are there cases of perceived unfair treatment, where only certain people are ‘in the know’ in relation to decisions or plans moving forward? Blending in non-family members – How are you competing with businesses that offer share based or equity rewards as part of their compensation plans for new talent? What can your family business offer in place of equity, including the certainty of cash which can be more attractive to many employees? Are there opportunities for advancement for employees who are non-family members? Implementing an effective people policy may require tough discussions and negotiations that go beyond established family expectations and reform longstanding practices. Overall, family businesses face particular challenges that require balancing the needs of the business with the expectations of the family. By making sure that your business has a strategy to develop and retain people with the right skills and fit for your business, you can create an equitable environment where everyone has the opportunity to thrive and build a sustainable foundation for both your business and your family. Liam Lynch is Partner and Head of Private Clients in KPMG.

Jan 15, 2021
Tax RoI

A number of BIK and employment related concessions in place due to the impact of COVID-19 have been withdrawn. Concessionary measures in place for the below list ceased to apply on 31 December 2020. Special Assignee Relief Programme (SARP); PAYE dispensation applications; Operation of PAYE for foreign employments and multi-State workers; PAYE exclusion order – Irish contract of employment; and Scholarship exemption. The 31 March 2021 filing deadline for Restricted Stock Unit cases where real-time foreign tax credits were provided through payroll is suspended. The return date for such employees reverts to the standard filing date i.e. 31 October 2021. The filing deadline for all 2020 share scheme returns is 31 March 2021. Concessionary measures for trans-border workers relief will continue to apply for the tax year 2021 where: an employee is required to work from home in the State due to COVID-19; and provided all other conditions of the relief are met. The concessionary measures for the exemption in respect of retraining costs as part of a redundancy package will cease to apply for redundancies after 1 May 2021. Section 6 within the COVID-19 information and advice for taxpayers and agents webpage on the Revenue website includes full details on the withdrawal of concessionary measures. Following the subsequent reintroduction of Level 5 public health restrictions, Revenue reinstated some BIK concessionary measures previously marked for withdrawal. Revenue confirmed that the below list of short-term concessionary measures will remain in place for the time being. BIK on provision of COVID-119 testing; BIK on facilitation of flu vaccination; BIK on employer provided vehicles; Use of company cars by employees in the motor industry; Payment of taxi fares by an employer; Small benefit exemption; and BIK on employer provided accommodation. Further information on the reinstated BIK concessionary measures is available through Revenue eBrief No. 004/21.

Jan 15, 2021
Tax RoI

Revenue published statistics on PAYE Preliminary End of Year Statements which issued overnight to all PAYE taxpayers’ MyAccount facility on ROS.  The statistics show that approximately 419,000 recipients of the TWSS and PUP have tax liabilities, of which 126,000 owe more than €1,000.  Taxpayers in refund positions must file an income tax return to access the refund and we understand that Revenue will be writing on a phased basis to those in tax payment positions encouraging them to file a tax return.  Revenue’s press release notes that 50,000 TWSS recipients do not have TWSS details stated on their Preliminary End of Year Statements because their employer is one of 5,600 employers who have not submitted TWSS reconciliations due to Revenue on 31 October 2020.  Revenue will seek a repayment of the subsidies paid out if the employers do not submit the reconciliations.  See here for full details of the Preliminary End of Year statistics.

Jan 15, 2021

The past year has seen the fast digital growth of businesses. With it, however, comes the added risk of cyber-attacks. The best way to defend against these attacks, says Sarah Hipkin, is to invest in and plan your cybersecurity strategy. After a year of accelerated digital transformation and increased cyber-attacks, it’s time for organisations to plan their Cybersecurity Strategy and Roadmap for 2021 with critical security lessons in mind. With this rapid, unplanned shift to digital channels and changes in consumer and business behaviour, a cyber criminal’s playground has just expanded. Current cybersecurity challenges Digital transformation changes an organisation’s cybersecurity threat and risk landscape. Current cybersecurity challenges faced by organisations include: critical information assets (e.g. bulk sensitive personal data or public-facing website) could be targets of attack; motivations of cybercriminals and type of cyber threats are not fully understood; and incident response teams taking too long to reconstruct cyber-attacks and take action to stop them. Regardless of the type of nefarious activity an organisation may face, if a cyber threat materialises, a security incident can have a significant impact on an organisation in terms of cost, productivity and reputation. Being adequately prepared to detect and quickly respond to the changing nature of incidents will help to stop an attacker from inflicting further damage. Cybersecurity strategy planning 2021 is the time to plan your cybersecurity strategy with these critical security challenges in mind. The strategy should ensure alignment between threat intelligence activities and business risks. Key activities will need to cover the following: Identify critical information assets which are essential to business operations, including underlying infrastructure. Collect information on adversaries’ motivations and intentions. What type of attacker may target your most valuable information assets? While most of the bad guys want to make money, whether stealing personal data, bringing down a website or shutting down critical services, their intentions will vary. Develop knowledge of cybercriminals’ tactics which includes malware and tools for sale, sale of personal data and exchanges of new exploits. Evaluate current effectiveness of systems security, including policies, processes, security training and staff capabilities to monitor, detect, analyse, and respond to cyber-attacks. The largest gaps in defences to protect critical information assets should be prioritised in the roadmap for improvement. Prepare a strategic cybersecurity roadmap which outlines each recommendation, detailing: the effects of losing or impairing the asset in costs, revenue losses, fines, reputational damage; likely adversaries who have attacked similar organisations; current deficiencies in defence layers; and associated technical and business risks amount to be invested and its associated benefits. Test response plan Cyber-attacks can impact an organisation of any size and will often occur at a time that catches everyone off guard. Under pressure, an individual’s decision making can become clouded. Scheduling a tabletop exercise with senior management and key operational staff to understand the realities of how a cyber incident would impact an organisation is critical. It will ensure everyone has a clear understanding of their role in responding to a cyber-attack and the organisational response, especially Board members who would likely be representing the organisation in the media. Sarah Hipkin is Director of Consulting IT and Cyber at Mazars.

Jan 15, 2021

  In this week’s Public Policy news, read about Ireland’s first National Remote Work Strategy to make remote working a permanent option for life after the pandemic, the increase to Ireland’s National Minimum Wage and the publication of the Spring Legislative Programme. Also covered is the anticipated economic impact of the new health restrictions in the UK and the ambitious biodiversity commitment and new sustainable finance charter at the One Planet Summit. Ireland’s first National Remote Work Strategy publishes The Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar, TD, has published Ireland’s first National Remote Work Strategy to make remote working a permanent option. The Strategy sets out plans to strengthen the rights and responsibilities of employers and employees, and to provide the infrastructure and guidance on how people can be empowered to work remotely.  The statement issued today promised legislation to provide employees the right to request remote working, a legally admissible code of practice on the right to disconnect from work, and investment in remote work hubs. It also mentioned the potential acceleration of the National Broadband Plan, a review of the treatment of remote working for the purposes of tax and expenditure in the next Budget, and a “lead by example” mandate that home and remote working should be the norm for 20 percent of public sector employees. The actions are to be completed over the course of 2021 and monitored by an Implementation Group.  Speaking about the Strategy, Minister Varadkar described the post-pandemic work landscape as “a new and better normal”, but pointed to the need to update employment rights and provide guidance. Increase in Ireland’s National Minimum Wage The National Minimum Wage in the Republic of Ireland increased by 10c to €10.20 per hour on 1 January 2021. For workers under 18 the hourly rate is now €7.14; those aged 18 will earn €8.16 per hour, and those aged 19 will be entitled to €9.18 per hour. Employees who are close relatives of a sole trader employer and employees who match the definition of ‘craft apprentice’ are excluded from the National Minimum Wage; it should also be noted that since 4 March 2019 trainee rates have been abolished. In order to ensure that the increase in the minimum wage does not result in employers attracting a higher level of PRSI charge solely due to this increase, the employer PRSI threshold will increase from €395 currently to €398 from 1 January 2021. Ireland’s Spring Legislative Programme Published The Spring Legislative Programme for the forthcoming Oireachtas session was signed off by Cabinet on 12 January. The programme contains 32 bills for publication and prioritisation by Government Ministers, and aims to deliver on the commitments outlined in the July Programme for Government. Government Chief Whip Jack Chambers, TD, announced that “[k]ey legislation will be progressed in this term across a broad range of sectors including climate action, housing, health and transport.” Bills include the Climate Action and Low Carbon Development (Amendment) Bill, a new Affordable Housing Bill and the Parents’ Leave and Benefit (Amendment) Bill. The full legislative programme can be viewed here. Impact of new health restrictions on UK economy  The UK Finance Minister Rishi Sunak has warned that the British economy will be significantly impacted by the new health restrictions put in place to help the country contain the spread of Covid-19. Minister Sunak told the UK parliament this week to expect the economy “to get worse before it gets better. He also suggested that the recently announced £4.6 billion package for businesses affected by the renewed lockdowns would not be increased by any additional economic support. Forecasts by the OECD published in early December 2020  predicted a 2021 increase in labour market withdrawals, unemployment and bankruptcies, although extensions to crisis loan schemes and the Coronavirus Job Retention Scheme are expected to provide support. Ireland joins the High Ambition Coalition at the One Planet Summit Ireland has joined over 50 countries in a ‘High Ambition Coalition’ pledging to protect 30 percent of the planet’s land and seas. Minister of State Malcolm Noonan confirmed Ireland’s participation in this coalition on Monday 11 January, at an event organised as part of the One Planet Summit. This international conference brought together heads of state and government as well as leaders of international organisations, financial institutions, the business sector and NGOs. The event was hosted by Ireland's former President, and former UN High Commissioner for Human Rights, Mary Robinson. Speaking at the One Planet Summit European Commission President Ursula von der Leyen pledged that the EU will invest “several hundred million euros” in biodiversity and animal-health related research projects, adding “if we don’t urgently act to protect our nature, we may already be at the beginning of an era of pandemics”. Also at that Summit, the Prince of Wales announced a new sustainable finance charter, the ‘Terra Carta’, aimed at persuading businesses to embrace sustainability. The charter sets out a 10-point action plan, amounting to almost 100 actions, for businesses to become more sustainable by 2030. It is already backed by business such as the Bank of America, BP, Blackrock, Unilever and AstraZeneca. It aims to raise £7.3 billion to invest in the natural world by 2022, through the Prince’s newly launched Natural Capital Investment Alliance. In 2004, the Prince of Wales established the Accounting for Sustainability Project (A4S), of which Chartered Accountants Ireland is a member, which aims to make sustainable decision-making business as usual. Read all our updates on our Public Policy web centre 

Jan 14, 2021
Brexit

Businesses across the island are adapting to the changes to their trading conditions which for some has resulted in significant supply chain disruption. We are aware that some businesses are experiencing difficulties adjusting to the new customs rules and administration requirements in particular and we continue to engage with UK and EU authorities and other stakeholders with regards these and other concerns. Our latest Brexit Digest deciphers the Trade and Cooperation Agreement and today’s bulletin highlights some supports available from customs authorities in the UK and Ireland. IRELAND RoRo movement – Temporary facility for ENS Revenue is implementing a temporary easement to alleviate difficulties businesses are experiencing in lodging safety and security Entry Summary (ENS) Declarations in respect of “roll-on roll-off” (RoRo) goods movements. This temporary easement is in place since last Friday (8 January).  For RoRo movements, Revenue has compiled a list of the most common PBN errors and related issues and how they can be rectified. See the list here.  All eCustoms notifications can be found here.  Members involved with importing/exporting are recommended to sign up to receive Revenue's eCustoms notifications by contacting ecustoms@revenue.ie. Subscribers will be notified if there are any issues with systems.  Read more Revenue’s advice for moving goods from Great Britain into Irish ports   Revenue have reminded truck drivers of two key things to keep in mind to ensure they can access their customs channel when moving goods from Great Britain into Ireland by ferry: Have the Pre-Boarding Notification Identification number (PBN ID) for the vehicle or trailer; and Check the customs channel no earlier than 30 minutes prior to disembarking. The advice contained in the Revenue press release is said to ensure that vehicles carrying goods to and from GB will be able to board their scheduled ferry without any difficulties and, will mean truck drivers can present goods for customs controls, if any, on arrival with the minimum of delay.  Read more about creating a correct PBN and checking the customs channel. To find out more information about what declarations are required, please visit our Brexit hub. Import VAT postponed in Ireland on GB imports The Postponed Method of Accounting for VAT was introduced in Ireland for imports into Ireland by registered businesses from countries outside the EU (including Great Britain). This means that instead of Irish businesses having to pay import VAT upfront at time of importing the goods, business can elect for VAT to be accounted for in the next VAT return.  This Institute lobbied for the introduction of this option since the Brexit referendum to ease the cash flow burden for many traders. The UK has already introduced this method for imports from the EU.  Read more.   UK HMRC webinars to support businesses HMRC are holding a number of webinars in the coming weeks to assist businesses in getting to grips with the changes which are now in effect due to the end of the transition period. Register on a webinar to find out what you need to do, and to discover more about the new customs processes which are now in operation. Please note that many of these webinars are aimed at businesses in GB trading with the EU. Read more. UK government guidance The Institute has been working with the Department for Business, Energy & Industrial Strategy to help prepare UK businesses for the transition to the new trading rules.  The Department has issued guidance and tools to help.   Read more.   Brexit Bites Reflecting the degree to which Ireland will be affected by Brexit, Ireland is due to receive €1.051 billion from the EU’s Brexit fund. The Brexit Adjustment Reserve is worth €5.4 billion and was set up last year to help member states most affected by the departure of the UK from the EU. Read the official statement.   The EU’s decision-making process on UK data adequacy could begin in a matter of weeks. The European Commission’s head of data flows Bruno Gencarelli told MEPs (at 10:48:20) yesterday that the EU team were finalising their assessment and would then “trigger the decision making process in the coming weeks”.   While the Trade and Cooperation Agreement concluded doesn’t cover data adequacy, the UK and EU have agreed that an adequacy decision on the UK’s data protection regime will be made within six months. For now, data can continue to flow between the EU and UK as before. If a positive decision on adequacy is not reached, data transfers will still be allowed but the process will be more complicated with additional safety measures required when transferring data.   The costly impact of the UK’s departure from the EU has been felt by online shoppers since the start of the year. VAT and customs charges which until now might have earned a brief glance by online shoppers on payment screens, are now causing costs, confusion and even shipping delays at every turn.  Let’s look at why. 

Jan 14, 2021
Tax

The top Irish tax stories this week include the withdrawal of BIK and employment related concessions put in place due to the impact of COVID-19. A consultation process on the Interest Limitation Rule is also underway to introduce the Interest Limitation Ratio in Finance Bill 2021. In UK developments, read the latest updates on the job retention and self-employed income support schemes. You can also read HMRC’s response to corporation tax filing difficulties. While in international tax, the EU will introduce new VAT e-Commerce rules from 1 July 2021.      Ireland Revenue withdrew a number of BIK and employment related concessions that were in place due to the impact of COVID-19; The Department of Finance published a Feedback Statement on the Interest Limitation Rule, with the consultation process aimed towards introducing the Interest Limitation Ratio in Finance Bill 2021, effective 1 January 2022. UK This week’s update on the job retention and self-employed income support scheme is available; Read HMRC’s response to corporation tax filing difficulties; and   International The EU will introduce new VAT e-commerce rules from 1 July 2021, to simplify the collection of import VAT when consumers buy goods online from third countries.  

Jan 14, 2021

Developments of interest this week are outlined. Chartered Accountants Ireland Technical Hub As previously advised, Chartered Accountants Ireland has launched a Technical Hub for members. This new resource replaces CHARIOT from 1 January 2021 and follows the “Hub-based” approach already in use elsewhere by the Institute. The Hub contains content on audit & assurance, financial reporting, insolvency, links to legislation, and a wide range of proprietary Institute content. The hub can be found on the Institute’s website here. A mapping document has been prepared which outlines where content previously found on CHARIOT can now be found on the Technical Hub. ROI IAASA has published summary information of its financial reporting enforcement activities undertaken during 2020. UK After the end of the tran­si­tion period on 31 December 2020, the UK ceased to apply EU law. IFRSs adopted by the EU at that point of time were in­cor­po­rated into Domestic UK law as IFRSs as adopted by the UK. The Secretary of State for Business, Energy and In­dus­trial Strategy (BEIS), who has been given the power of endorsing and adopting international accounting standards while the UK En­dorse­ment Board (UKEB) is still being es­tab­lished, has now adopted two amend­ments to IFRSs for use within the UK. The FRC has issued a podcast on Reflections from the Financial Reporting Lab Europe The endorsement by the European Commission of Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2 is now reflected in the updated EFRAG Endorsement Status Report. Ac­coun­tancy Europe has responded to the con­sul­ta­tion document on the ad personam mandate on potential need for changes to the gov­er­nance and funding of EFRAG in the context of possible changes to non-fi­nan­cial reporting by companies. International The IFRS Foundation has published educational material to support companies in applying going concern requirements. The IFRS Foun­da­tion is offering three webinars aimed at iden­ti­fy­ing how academics can con­tribute to the post-im­ple­men­ta­tion reviews of IFRS 9 'Financial In­stru­ments', IFRS 15 'Revenue from Contracts with Customers', and IFRS 16 'Leases'.  

Jan 14, 2021

The IFRS Foundation has published educational material intended to support companies in applying the going concern requirements of IFRS standards in the preparation of financial statements. Noting that companies preparing financial statements using IFRS Standards are required to assess their ability to continue as a going concern, they say that in the current stressed economic environment arising from the covid-19 pandemic, deciding whether the financial statements should be prepared on a going concern basis may involve a greater degree of judgement than usual. ‘Going concern – a focus on disclosure’ looks at going concern and related requirements in IAS 1 ‘Presentation of Financial Statements’ and IAS 10 ‘Events after the Reporting Period’, and applying the requirements. The Foundation note that the material is published to support consistent application of IFRS Standards and brings together the requirements in IFRS Standards relevant for going concern assessments - it does not change, or add to, existing requirements. For more information, and to access the material, see the press release on the Foundation's website.  

Jan 14, 2021
Student Interviews

What do you think about Brexit? How do you think the pandemic will affect your career? What do you think is the future of the profession? In every issue of The Bottom Line, we will ask students their thoughts on a particular topic. Question of the month: Is Brexit an opportunity or challenge for Ireland? Alejandro Castro, Accountant at Quadient In my personal opinion Brexit represents an opportunity but also a challenge for Ireland. It is a challenge because the Irish economy is highly integrated with the UK. Currently, around 80% of the goods exported from Ireland are transported to or through the UK which means the Irish economy will suffer a material negative impact. However, Ireland will benefit from any future trade deals negotiated by the EU. Therefore, Irish businesses will have an opportunity to become amongst the most competitive in Europe. Technology, resilience and innovation are core traits that will enable Irish businesses to grow. Ruth Cummins, AWM Assurance Associate at PwC To answer that question, it is important to look at the direct economic impact it is having across sectors.  Brexit has opened up a wealth of new job opportunities in Dublin and other economic centres with the relocations of multinationals such as Barclays, JP Morgan and Bank of America, pushing Ireland higher up the ladder as a hub for multinational enterprises, boosting Ireland’s GDP. On the other hand, Brexit is introducing a massive challenge to more traditional sectors such as fishing and farming. They are currently dealing with a lot of uncertainty and question marks over exports and trade tariffs is adding to this strain.  Overall, I believe Brexit was a step in the wrong direction for the UK, but whether that will have a net negative impact on Ireland is yet to be determined. Ciara Woods, Audit Associate at KPMG Brexit is both an opportunity and a challenge for Ireland and the outcome is very much  dependent on how we react to it.  I think the opportunities such as opening up new markets and relationships are overlooked by many individuals, businesses and countries. Many believe Brexit to be a challenge due to the uncertainty and how it will change people’s and businesses’ way of life, commerce and traditional thinking. 

Jan 13, 2021

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