Chartered Accountants Ireland Chartered Accountants Ireland has updated the Technical and business updates page on our COVID-19 Hub with updates on Auditing implications of Coronavirus, Financial Reporting implications of Coronavirus and Information for insolvency practitioners.  We have also updated our page on Key Stakeholder Updates or both ROI and NI / UK in response to COVID-19.   UK The Financial Reporting Council continues to make progress on its journey towards becoming the Audit Reporting and Governance Authority (ARGA) by taking forwards work on the recommendations of the Independent Review of the FRC. The FRC welcomes the release of the International Auditing and Assurance Standards Board’s (IAASB), exposure draft of proposed International Standard on Auditing (ISA) 600 (Revised), Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors).   Tools for flagging signs of poor quality audits should be used more effectively so timely corrective action can be taken, according to a major review of their use by the FRC.  Europe Accountancy Europe have recently published a summary document on their work so far on the future of audit and assurance. The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB exposure draft ED/2020/2 'Covid-19-Re­lated Rent Con­ces­sions (Proposed amendment to IFRS 16)'. International The IFRS April News Summary has just been issued. The International Federation of Accountants (IFAC) has published a ‘Practice Transformation Action Plan – A Roadmap to the Future’ which covers four key focus areas for small- and medium-sized practices (SMPs). The International Accounting Standards Board (IASB) has published an exposure draft 'Clas­si­fi­ca­tion of Li­a­bil­i­ties as Current or Non-cur­rent — Deferral of Effective Date (Proposed amendment to IAS 1)' proposing to defer the effective date of the January 2020 amend­ments to IAS 1 by one year. Comments are requested by 3 June 2020.        

May 07, 2020
News

Business is never going to be the same after COVID-19. How can we prepare for the aftermath? Eamon Murphy offers us lessons to cope with the future ‘new normal’. I was working in Milan when the authorities announced the lockdown of a few small towns in the Lombardy and Veneto regions in late February. The action was designed to prevent the spread of the virus to the industrial north of the country and beyond. It was a sunny Sunday afternoon and the square outside Milan’s famous Il Duomo cathedral was filled with tourists (some masked) and well-fed pigeons. The Milan fashion week and three Serie A matches had just been cancelled. I did not feel that I was sitting in a front row seat watching the start of a pandemic outbreak, but I was. Since then, I have returned to Ireland and have witnessed how this most democratic, pernicious virus has planted itself among us without any sign of leaving. Governments around the world have struggled to respond to the scale of the health and economic collapse. It is a wartime endeavour with the frontline shifted to attack the most vulnerable ­­– the elderly in nursing and care homes and those who are already dealing with health concerns. The economic impact has been swift and brutal. Thriving enterprises have seen turnover fall to zero overnight. In Ireland, the numbers dependent on state support has rocketed to over one million. All conventional economic forecasts have been jettisoned in favour of scenarios – educated guesses as to how bad the deficit, unemployment and contraction might be. This is where we find ourselves in early May – just two months after the first tentative Italian lockdown. We are unsuspecting innocent travellers who find ourselves caught up in this terrible car crash of history. As professionals in business, we have no choice but to confront our historic appointment. There will be a post-COVID phase and it’s time we prepare for our ‘new normal’. I have been working remotely for the past few months and would like to offer the following lessons from lockdown: Do not assume that your business post-COVID future will be just like it was in the past. Events of this scale always leave behind great change. Even if you think your business will not change, your customers and supply chain will. Act now. Do not wait for the crisis to end. Normal business rules have been suspended. Be bold, imaginative and innovative. Create your own future. ("What did you do in the Great War, Mr Joyce?" "I wrote Ulysses. What did you do?") Help is available. Maximise assistance from the Government schemes and agencies – wage subsidy, unemployment support, Strategic Banking Corporation of Ireland loans, Sustaining Enterprise fund and financial planning grants. Find someone to talk to. Cash trumps everything. Forecast early and often. Remote working works. Trust your staff to work from home. (Right now, you may have no choice). Ask yourself if you really need all that office space when this is over. Online meetings are not the same as in-person meetings. They are filled with peril for wafflers and the unprepared. We miss the social interaction cues. These meetings require more than an effective broadband and technology. Above all they need an effective chair with excellent listening skills. Go online and find Andrea Bocelli singing on Easter in the empty Duomo di Milano. Soul music. Eamon Murphy is a member in business and of Chartered Accountants Interim Managers.

May 06, 2020

****Due to Demand – extra COVID-19 webinar dates added**** All businesses, regardless of size, will be affected by the government measures for the foreseeable future. The webinar covers: How the Temporary Wage Subsidy Scheme works; The rollout of the Operational Phase; How BrightPay and Thesaurus cater for the TWSS Operational Phase; and The impact of laying off staff. Places are limited. Register early to avoid disappointment. 21st May @ 10.30 am - book now! (This article is sponsored by BrightPay.)

May 06, 2020
Tax UK

As set out in our earlier news story, we have continued to engage today with HMRC on the rational for agents not being able to make claims on behalf of their clients once the self-employed income support scheme opens. In particular, we have raised the position of agents and the digitally excluded. HMRC's response received just now confirms that agents will not be able to make claims. The key message we have received is that HMRC has looked hard at making it work for agents, but this would have added significantly to the time to deliver the service. It was considered overall a better decision to get the money to taxpayers as soon as possible. Developing the functionality for agents/intermediaries was one of the difficult trade-offs made in delivering the system as early as possible to get money to eligible self-employed taxpayers. According to HMRC, the system has therefore been developed in a way that make the claim process as easy as possible to use.  Agents can still provide assistance by supporting clients to understand the eligibility rules using the online checking tool and helping them to get ready by advising what information they will need to hand. Agents can also assist clients in making a request a review where the system gives a response that they are not eligible. Taxpayers will need a Government Gateway (“GG”) ID and password to make the claim. If a client does not have a GG login, one can be created when they check their eligibility online. It is very important that agents do not use client GG credentials to apply for grants under this scheme on behalf of clients. In doing so this may trigger HMRC fraud checks and delay payment. Members are also reminded of their responsibilities under the Institute’s Code of Professional Conduct.    Where a taxpayer is not able to use the online process, agents should refer taxpayers to HMRC’s COVID-19 hotline where they can submit an application over the phone. More details are to follow on this process.

May 05, 2020
Tax UK

In a letter to us from the Chancellor of the Exchequer received on Sunday 3 May and published yesterday, HMRC have advised that the coronavirus self-employed income support scheme is now aiming to make payments by 25 May and not June as previously announced. A new online eligibility checker tool is also now available, the guidance for the scheme has also been updated on eligibility, how the process for making a claim will work and how HMRC calculate the grants.  HMRC has now started contacting those who are potentially eligible. A further detailed update has just been received from HMRC on the scheme which we have set out below.   We understand that agents will not be able to make claims on behalf of their clients as this would have delayed the release of both the claim portal and cash to agents.  Agents can however assist clients in checking their eligibility.  The Institute has been engaging with HMRC on this specific matter and other issues related to COVID-19 supports. In particular, we have raised the position of agents and the digitally excluded with HMRC and are awaiting a response.  HMRC are holding a number of webinars on this scheme at various dates and times. Book onto a webinar now and hear the latest from HMRC.  “Update from HMRC  This week we will start contacting people who may be eligible for the new Self-Employment Income Support Scheme.  If they are eligible, this scheme will allow them to claim a taxable grant worth 80% of their trading profits up to a maximum of £7,500.  The process is quick and easy for your clients to follow, but we are asking for your help in guiding them through the eligibility criteria and the process for checking and claiming.  Advising clients  You can play an important role in supporting your clients by helping them get ready to claim, by:  talking them through why they may / may not be eligible  helping them to find the details they need  using the online eligibility checker on their behalf (or supporting them to use it themselves).  Under the rules of the scheme, not every self-employed person will be able to claim, so we’d value your support in helping them understand this. Your client must complete the claim themselves.  See our updated guidance on GOV‌.UK for information on eligibility, how they will make a claim and how we calculate the grants.  Those who are ineligible  This is a very challenging time and some people may be disappointed if they are not eligible. We would be grateful for your help in explaining the reasons why, and helping them find alternative support.  They may be able to:  delay VAT payments  delay their Self Assessment payment on account  arrange to pay their Self Assessment tax bill in instalments  get a payment from the Small Business Grant Fund  get a loan from the Business Interruption Loan Scheme or Bounce Back Loan  get Universal Credit  apply for Employment and Support Allowance (ESA)  apply for Child Benefit.  We've worked hard to ensure we’ve identified the right people who are eligible, but of course they will be able to ask for a review, or you can ask for a review on their behalf. If you or your client ask for a review, we will look at their case from 18‌‌ May and explain their eligibility by the end of May.  Scams  We are aware of an increase in scam emails, calls and texts. Eligible customers will be invited to claim through GOV‌.UK – it is the only service they can use. If someone gets in touch with your clients claiming to be from HMRC, saying that financial help can be claimed or that a tax refund is owed, and asks them to click on a link or to give information such as their name, credit card or bank details, they should not respond. It is a scam.  Suspicious emails claiming to be from HMRC should reported to us by sending them to phishing@hmrc.gov.uk. Texts should be sent to 60599.  We will write again in the next few days with more information on the claim process, but in the meantime, thank you for your help in supporting the launch of this new scheme”   

May 05, 2020
Tax UK

Members can visit our dedicated UK Coronavirus Job Retention Scheme (“CJRS”) page, which provides guidance on the scheme announced on 20 March 2020. Download our factsheet on the who, what, where, when and why of the scheme. We understand that the first payments under the scheme began to hit employer’s bank accounts last week.  Readers are also advised that the CJRS guidance has been updated again as set out below. You are advised to bookmark these links and print a copy of the guidance which applied at the time you submit your claim for the CJRS grant. Here is a full list of the updates made last week:  Employee guidance https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme  Added parental bereavement leave to the statutory leave section  Added links to BEIS guidance covering employees on furlough who started family related statutory leave on or after 25 April 2020  Clarified the wording on what can be included in wages (to reflect changes already made to the employer guidance)  Added new information on Employees who are union or non-union representatives continuing work specific to that role while on furlough  Added new information on Company Directors with an annual pay period  Added a link for shared parental pay (rather than currently referring to the maternity guidance and saying the same rules apply)  Added wording about maternity allowance.  Employer page 1 https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme  Added a sentence to clarify that CJRS grants are not classed as state aid  Added new information on Company Directors with an annual pay period  Changed the date from 28 February to 19 March 2020 in the section on TUPE transfers   Added new information on Employees who are union or non-union representatives continuing work specific to that role while on furlough  Added parental bereavement leave to the statutory leave section  Added links to BEIS guidance covering employees on furlough who started family related statutory leave on or after 25 April 2020  Employer page 2 https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme  Clarified that the calculator can’t be used for those who “have an annual pay period”   Clarified wording in the employees returning from family-related statutory leave section and sick pay section  Added the June daily maximum wage rates to the table now the scheme has been extended  Improved clarity in the employer National Insurance contributions section, confirmed the direct percentage method or tables method can be used and added new information for company directors.  Employer page 3 https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme  Added the procedural point (If you have one or more employee without a National Insurance number please contact HMRC)   Employer RTI https://www.gov.uk/guidance/reporting-payments-in-paye-real-time-information-from-the-coronavirus-job-retention-scheme  No further changes  Employee guidance https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme  Added a link for shared parental pay (rather than currently referring to the maternity guidance and saying the same rules apply)  Added wording about maternity allowance.  Now that the scheme is up and running we’d like to hear about your experiences of the scheme and online portal.   HMRC also advise that any issues being experienced should also be reported to them via the online Agent Forum so that they can triage and respond to widespread issues more quickly.   Remember, in order to do so you must have signed up for and be logged into the Forum. All agents, who are a member of a professional body, are invited to join HMRC’s Agent Forum. This dedicated Agent Forum is hosted in a private area within the HMRC’s Online Customer Forum. You can interact with other agents and HMRC experts to discuss topical issues and processes.

May 05, 2020
Tax

If an employee usually has the use of a company car but now during the COVID-19 restrictions the car is not in use, then the employee should consider giving the car back to their employer. This bulletin looks at the position in both Ireland and Northern Ireland.   For Irish employees, handing back the company car to the employer will reduce the tax charge that would otherwise arise on the benefit of access to the company car. If the employer takes back possession of the vehicle and an employee has no access, no benefit-in-kind applies for the period.  Similarly, if the employee keeps the company car but is prohibited from using it by their employer, no benefit-in-kind arises, provided that the employee does not use the car for any private purpose and proof of same is recorded.    Where an employee has a company car and they have limited or reduced business mileage during the period of the COVID-19 restrictions and personal use is limited, then mileage travelled in January 2020 may be used as a base month for the purposes of calculating the amount of benefit-in-kind due. If the employee continues to undertake business travel as usual in the company car, the usual tax rules on benefit-in-kind will apply.  The Irish Revenue has published details on this treatment on their website.    For those employed in the UK and Northern Ireland, HMRC’s view on company car benefits is that the benefit charge applies where a car is made available for private use, whether or not it is used. For example, a car kept on an employee’s driveway during a period of furlough would still be considered to be made available. However, a benefit in kind for tax purposes does not arise if the vehicle is not available for 30 consecutive days or more. This also applies to the fuel benefit if the employee is provided with private fuel.   Under the UK coronavirus job retention scheme, the benefits in kind of employees who have been furloughed are not covered under the scheme. This means many employees are still facing expensive tax bills on company cars whilst at the same time they are dealing with a 20 per cent cut in their pay, if their employer does not top it up.   HMRC has advised that if employees are able to hand the car back to their employer then it will not count as available. Usually HMRC would expect the car to be handed back to the employer so that it cannot be used.   This may not be practical due to lockdown restrictions. However, exceptionally, they will accept that where all the keys (or tabs) are in possession of the employer, and the employee does not have the authority to request the keys are returned to them, the car would be unavailable. This could be achieved by posting the relevant items back to their employer.  See HMRC’s guidance on this topic. 

May 05, 2020
Tax

Revenue’s guidance on the relief in  Part 34-00-10  been amended mainly to reflect the change to the extension of the relief with regard to individuals assigned to work in the State up to the end of 2022, as a result of Finance Act 2019.   The relief is provided for in section 825C Taxes Consolidation Act 1997.  

May 05, 2020
Tax

A recording of the webinar hosted on 29 April with representatives from the Institute, Revenue and Grant Thornton is available to watch on our dedicated webpage.  The accompanying slides are also available to download. The webinar focused on the recent changes to the scheme, the Operational Phase from 4 May, practical calculations of the subsidy amount and answers to members’ common queries.  Keep an eye on our COVID-19 hub for details on the next webinar. 

May 05, 2020
Tax UK

HMRC are holding a number of very popular live webinars on how to make a claim through the Coronavirus job retention scheme. Book onto one today.   Coronavirus (COVID-19) Job Retention Scheme: During this webinar we’ll cover, furloughed workers, who can apply for the scheme, following the rules of the scheme, how much may be claimed, how to claim and what you’ll need to claim.  Choose a date and time  Coronavirus Job Retention Scheme – How to make a claim: This guides you through making a claim, including the essential information you need, what to do before you make your claim, calculating and processing your claim.  Choose a date and time  Coronavirus COVID-19 Statutory Sick Pay Rebate Scheme: Providing an overview of the scheme, this webinar looks at who can claim, when to start paying SSP, employees you can claim for, making a claim, keeping records, and more.  Choose a date and time  If you’ve missed any of HMRC’s other recent webinars, or have been unable to join, you can view a recording on HMRC’s YouTube channel.

May 05, 2020
Tax

The Department of Finance has published the COVID-19 PQ responses to 27 April.  The information included in the responses may be helpful as you deal with the many complexities and issues arising from the impacts of COVID-19.  Particularly of note is the Minister for Finance’s responses to questions on the Temporary Wage Subsidy Scheme and tax measures to support businesses.  The PQ responses 27 April (page 3) include the Minister’s statement on the maternity leave and access to the Temporary Wage Subsidy Scheme; the Minister states: “…it follows that the TWSS can only operate in respect of an employee, whether full-time or part-time, who was on the payroll of the employer as at 29 February 2020. Thus, where an individual commenced a new employment after that date, or returned to the payroll of his or her employer after that date following a period of unpaid leave, whether maternity leave or otherwise, he or she does not meet the eligibility criteria with the employer as he or she would not have been on the employer’s payroll at that date.” The same PQ responses (page 6) cover the position for late tax payments and any interest waiver from Revenue.  Many members contacted us querying the Revenue’s criteria for a SME and the availability of support for businesses that fall outside these criteria.  The Minister states: “ Revenue’s definition of an SME for tax purposes is a business with an annual turnover of less than €3m and whose tax affairs are managed by its Business Division. Larger businesses are defined as those managed by its Large Corporates Division (LCD) and Medium Enterprise Division (MED).” “The suspension of interest on late payment in respect of those VAT and PAYE (employer) periods is also available to larger businesses but is managed through direct engagement that optimises the good working relationships that exist between them and the relevant LCD or MED case managers.” It may be worth the time reading through the PQ responses as many topics of interest and concern to members are covered.

May 05, 2020
Tax

Revenue’s FAQs on the scheme are updated to version 9 and now provide guidance on the Operational Phase which began on 4 May, some other additions and changes are included.   We recommend all members read the FAQs and familiarise themselves with the updates which are highlighted in grey. Revenue has also developed a Sample Subsidy Calculator in excel format which may help to demonstrate how an employee's subsidy can be calculated during the Operational Phase. The updates in version 9 cover matters such as: Timeline of the scheme and the changes (1.1) Operational phase (1.2) Treatment of top up payments by the employer (1.6) Employers in the Community and Voluntary sector in receipt of State or Exchequer funding (2.11) Eligible employees (3) Employees with multiple jobs (3.12) Figure for Average Revenue Net Weekly Pay (4.3) We continue to engage with Revenue on all aspects of the scheme. As we receive relevant updates, we are advising all members via the appropriate channels. Please check in regularly on the COVID-19 Hub on the for latest updates. A recording of the TWSS webinar hosted on 29 April with representatives from the Institute, Revenue and Grant Thornton is available to watch on our dedicated webpage.  The accompanying slides are also available to download.

May 05, 2020

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