Tax

Check out the latest items on the Agent Forum. Remember, in order to view each item you must have signed up for and be logged in.  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 Taxpayer Forum. You can interact with other agents and HMRC experts to discuss topical issues and processes. 

May 18, 2020
Tax UK

HMRC and the UK Government continue to publish updates on COVID-19 related issues. When using a form or publication going forward or contacting HMRC, check you are using the most recent version or up to date way of contact which may have changed due to the pandemic.  The Financial Secretary to the Treasury announced that the reimbursement of expenses that would be for home office equipment are exempt from tax. The relevant Regulations are to be laid this week, and will have effect for the 2019-20 (from 16 March 2020 only) and 2020-21 tax years The European Commission has proposed a three month delay to the initial reporting deadlines under the EU mandatory disclosure rules (DAC 6). Read our story on this from last week Guidance is available outlining how holiday entitlement and pay operate during the coronavirus pandemic has been published which is designed to help employers understand their legal obligations, in terms of workers who continue to work or have been furloughed  HMRC has updated its guidance on when taxpayers have a reasonable excuse for late filing of returns or late payment of tax to include being affected by coronavirus HMRC has announced it will accept delayed appeals against decisions or penalties dated as far back as February 2020 where the delay is due to the taxpayer or their business being affected by coronavirus Check if you can get a payment deferral or deregister if you are a business with an annual fee due between 1 May and 30 September 2020 If you're an employer, find out if you can use the Coronavirus Statutory Sick Pay Rebate Scheme to reclaim employees' coronavirus-related Statutory Sick Pay (SSP) The guidance on choosing how Choose how and when you can delay making your second payment on account for the 2019 to 2020 tax year has been updated Check temporary changes to the time limit and rules for notifying an option to tax land and buildings The government is temporarily relaxing the eligibility criteria for tax-free childcare and 30 hours free childcare to support working parents during the coronavirus pandemic

May 18, 2020

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 for both ROI and NI / UK in response to COVID-19.  Ireland The Charities Regulator has just published Guidance on Charity Reserves to encourage and facilitate the better administration and management of charities. UK The Financial Reporting Council (FRC) has updated its guidance for companies in relation to interim results. The FRC has this week issued an editorial change to Appendix II and Appendix III of the 2018 Guidance on the Strategic Report.   Europe The Consultative Committee of Accountancy Bodies have issued a document Phishing and Insider Fraud. Accountancy Europe is supportive of new EU action against money laundering and has endorsed the ‘Action Plan’ issued on 7 May 2020. International The International Accounting Standards Board (IASB) has issued several small amendments to IFRS Standards. IFRS Foundation Trustee Teresa Ko provided the prepared remarks at the inaugural meeting of the Green and Sustainable Finance Cross-Agency Steering Group earlier in May.  

May 15, 2020
Tax UK

  This week, in Irish stories, Irish Temporary Wage Subsidy Scheme is now in the Operational Phase, read about what this means for employers and employees and the Revenue guidance and tools available. In UK stories, claims under the coronavirus self-employed income support scheme opened for some taxpayers on Wednesday 13 May and the job retention scheme is being extended to 31 October 2020. In International news, watch the latest webcast from the OECD, providing an update on international tax matters including the work on the ‘tax challenges from the digitalisation of the economy’.      Ireland The Wage Subsidy Scheme is now in the Operational Phase. Read more Read the latest Parliamentary Question responses published (up to 11 May) on the Wage Subsidy Scheme UK Read the latest update on the self-employed income support scheme which opened for claims earlier this week The Chancellor has announced the extension of the job retention scheme to 31 October 2020 International Watch the latest webcast from the OECD, providing an update on international tax matters including the work on the ‘tax challenges from the digitalisation of the economy’

May 15, 2020
Public Policy

  In today’s bulletin, read the measures that businesses need to put in place when preparing to re-open and return to work in the recently published ‘National Return to Work Safety Protocol’. Minister Humphreys publishes National Return to Work Safely Protocol The Minister for Business, Enterprise and Innovation, Heather Humphreys TD has published the National “Return to Work Safely Protocol”. The Protocol is designed to support employers and workers to put measures in place that will prevent the spread of COVID-19 in the workplace, when the economy begins to slowly open up, following the temporary closure of most businesses during the worst phase of the current pandemic.  The following requirements, among others, are included in the Protocol: Each workplace will appoint at least one lead worker representative, who will work with the employer to ensure that COVID-19 measures are strictly adhered to in the workplace. Employers will issue a pre-return to work form for workers to complete at least 3 days in advance of the return to work. Before a workplace reopens, there will be COVID-19 induction training for all workers to make sure that they are up to speed on the Public Health Advice and Guidance. The plan should include measures relevant to COVID-19, for example, social distancing, the provision of hand sanitisers, tissues and clinical waste bags, clear procedures around handwashing and respiratory etiquette, and ensuring proper ventilation on site. If a worker displays any symptoms of the virus during work hours, the designated manager must direct that person to a designated isolation area, along a designated route, all the time maintaining a 2 metre distance, and arrange for that person to remain in isolation before arranging for them to be transported home, or to a medical facility, avoiding public transport. The employer must also carry out a full risk assessment of the incident to see what, if any, further action needs to be taken. Breaks and rest periods should be organised so as to facilitate social distancing In settings where 2 metre separation is not possible, alternative protective measures such as installation of physical barriers/plastic sneeze guards should be put in place The Protocol is a living document and will change over time, in compliance with the latest public health advice. Read all our updates on our Public Policy web centre.  

May 15, 2020
Brexit

  In today’s bulletin, read about the latest updates from the EU and UK’s third round of Brexit negotiations. Additionally, the European Commission has taken legal action against UK on free movement. You can also read about the UK government’s plans to enhance border checks at Northern Ireland ports post-Brexit. Third round of Brexit negotiations ends today The third round of Brexit negotiations between the EU and UK government has concluded today. The negotiations began on Monday 11 May and lasted for the whole week, concluding on Friday 15 May 2020. The full agenda of the negotiations can be found on the European Commission’s website. As a part of their discussion, both sides are due to decide by the end of June whether the current deadline for negotiating an agreement should be extended beyond the end of December. European Commission takes legal action against UK for failure to comply with EU rules on free movement The European Commission launched infringement proceedings against the United Kingdom on Thursday 14 May 2020, for failure to comply with EU law on the free movement of EU citizens and their family members. UK national legislation limits the scope of beneficiaries of EU free movement law in the UK as well as the possibilities for EU citizens and their family members to appeal administrative decisions restricting free movement rights. During the Brexit transition period, which is due to end on 31 December 2020, EU law on free movement applies to the UK as if it were still a member of the bloc. The Commission said it was concerned that current shortcomings endanger the implementation of EU citizens' rights that was formally agreed in the Withdrawal Agreement between the EU and the UK signed in January. “The UK now has four months to take the necessary measures to address the shortcomings identified by the Commission," the Commission statement said, adding that otherwise it might have to send a formal request to UK authorities to comply. This news comes as a part of the European Commission’s regular package of infringement decisions, where the body pursues legal action against Member States for failing to comply with their obligations under EU law. UK government to enhance border checks at NI ports As an update to the ongoing Brexit negotiations, the UK government has confirmed to the EU it will enhance inspection posts at Northern Ireland's ports in order to deliver on the Brexit deal. Junior Minister Declan Kearney told a Stormont committee that the Northern Ireland Executive had been given a briefing by officials on Monday on the latest stage of Brexit negotiations between the UK government and the EU. This communication took place via letters, which have been understood to have been exchanged in the last two weeks, focused on what are known as Border Control Posts (BCPs). Under the Brexit deal, reached in October 2019, Northern Ireland will continue to follow EU single market rules on agricultural and manufactured goods. The EU has strict rules on the entry of animals and food products into the single market, and these products must always enter the single market through designed BCPs. Therefore, the establishment of BCPs at Northern Ireland's ports was always going to be a consequence of the Brexit deal.   Read further updates on our Brexit web centre.

May 15, 2020

A Questions and Answers (Q&A) publication was developed by the staff of the IESBA to highlight aspects of the International Code of Ethics for Professional Accountants (including International Independence Standards) that might be relevant in navigating ethics and independence challenges and risks as a result of the COVID-19 pandemic. This publication does not amend or override the Code, the text of which alone is authoritative. Reading this publication is not a substitute for reading the Code. The Q&A can be read here

May 15, 2020
Ethics and Governance

How can charities, especially smaller ones, deal with the many challenges they are currently facing? Kathya Rouse identifies key areas where accountants may be needed to help charity clients. Like everyone else, charities are struggling to come to terms with their new normal. The unprecedented situation we find ourselves in, and uncertainty around the short-term outlook, makes planning for the future exceptionally difficult. Some charities are continuing to provide ongoing services, while other charities are operating limited or no services due to the current government restrictions. It seems likely that some level of social distancing will be in place for some time and many charities will need to come up with new ways to continue/recommence providing their services while adhering to the relevant government restrictions. Amid all this uncertainty, how can we, as accountants, help? Many smaller charities do not have the expertise among staff or trustees to deal with many of the challenges they are being faced with. We are more than “just” accountants to these clients – we are their trusted business advisors who can be relied on to provide independent advice. I have identified a few areas where you may be needed to help your charity clients: Provide a sounding board and listen to their concerns Despite many similarities between charities, each one will have different requirements right now, so aim to provide a bespoke solution for each charity.   Encourage them to develop a contingency plan to guide them through planning for their organisation during the life cycle of the current pandemic There are various free templates and guidance issued by some of the main charity sector support organisations, such as The Wheel and The Carmichael Centre, which you can direct clients to. The contingency plan should be a live document which remains under regular review. Advise charities around their governance requirements and their AGM There is conflicting advice around whether AGMs can be held entirely virtually under company law except where specifically allowed by the company’s constitution. You can play a key role in helping the charity figure out its position re quorum and use of proxies to overcome this hurdle. Get involved in the budgeting process Budgeting has never been more important, and you can provide your expertise through assisting in, or reviewing, the budgeting process. Like the contingency plan, the budget should also be a live document updated regularly. Empower the trustees Empower the charity trustees to make decisions around whether they can use their current accumulated reserves to make up for a temporary deficiency in resources by assisting them to ascertain their restricted and unrestricted funds. Stay up-to-date Ensure you stay on top of the various funding streams available to charities, such as the Temporary Wage Subsidy Scheme and the new €40 million COVID-19 support fund, and make sure to keep your clients abreast of any available funding. Keep up to date with ongoing regulatory, professional and other guidance which may be of use to your clients. Chartered Accountants Ireland have collated a list of various guidance documents which are available on its website and is open to everyone, not just members. Make use of any reputable free resources available to you and your clients. Kathya Rouse is a Partner at McMoreland Duffy Rouse and a CA Support Board member.

May 14, 2020
News

In these uniquely challenging circumstances, how can accountants support non-profits? Patricia Quinn and Paula Nyland tell us that thoughtful and clear-eyed planning is needed to mitigate the challenges facing these organisations. Stories from the non-profit sector can paint a bleak picture of services threatened, vulnerable people at risk, fundraising decimated, and mature non-profit businesses facing unprecedented challenges to their viability. The emergency €40 million funding package provided by Government for the non-profit sector will go a ways towards buying some much-needed time, allowing these non-commercial businesses to take stock, regroup and renew their operations. If you look at the thousands of non-profits listed on Benefacts public website, you can see that the sector is highly diverse. At one end, there are heavily staffed health and social care service providers that derive most of their funding from the State in exchange for providing essential services. At the other end, there are thousands of small, local associations and clubs that rely mostly on donations and volunteer effort. These are uniquely challenging circumstances for non-profits and accountants have an important role to play in supporting them – whether as professional advisors or as voluntary Board members. As analysts of sector data, these are the kinds of situations Benefacts has encountered: Dependency on fundraising and donations is high, with almost €0.9 billion reported in the most recent financial statements of all the companies in Benefacts Database of Irish Non-profits. The pandemic has decimated traditional interactive fundraising in its many forms – whether event-driven, church gate collections or calling to homes to sign up to direct debits. Some high-profile campaigns have mitigated this, such as Pieta House, which raised €2 million after a push on social media, but this is only a third of the €6 million raised by last year’s ‘Darkness Into Light’ walk, with no alternative project to fill the €4 million gap. Online fundraising simply does not have the same impact. Many non-profits do not hold an adequate level of reserves. A good rule of thumb accepted by some Government funders is 10 weeks of operational expenditure. Sadly, few non-profits enjoy this level of security. In fact, many Government funders actively discourage the holding of reserves, with the result that several non-profits operate a ‘hand-to-mouth’ existence in terms of cash. Although the cost base of larger non-profits reflects the labour-intensive nature of their work, Benefacts analysis shows that in the case of many smaller non-profits (i.e. less than €250,000), non-payroll expenditure amounts to some 70% of their cost base. This means the COVID-19 subsidy will be of limited value. The demand for services is higher, and the costs of delivery will increase with the cost of delivering care with social distancing restrictions still active. This will have far-reaching effects in homelessness services, respite, residential care, and many more service areas dominated by non-profits. In the voluntary housing sector, income support payments have helped maintain rent payments but, without a further injection of funding, it will become harder to meet the demand for housing given the likely consequences for the coming recession for the building sector. Inevitably, the current focus is on the immediate issues, but for the medium-term, thoughtful and clear-eyed planning will be needed. Directors and trustees need to be looking at cash flow projections, potential increases in demand, and commitments to continued government support. Without this, sector leaders are telling us that tough decisions may be needed to cut services as early as Q3 2020. Although the emergency fund is very welcome, many organisations will need an early commitment of future government funding into 2021 and beyond to maintain essential services. The alternative could be closures, with all the unthinkable consequences for the most vulnerable in our society.   Patricia Quinn is the Managing Director of Benefacts. Paula Nyland is the Head of Finance at Benefacts.

May 14, 2020
Governance, Risk and Legal

Bob Semple FCA writes about the secret sauce of electronic collaboration and the opportunities technology presents to apply a cost effective new approach to virtual meetings. He highlights technology features that, when used, can make a positive difference to the meeting experience. Whether you are organising your next virtual team, management or board meeting, Bob shares his top tips on how to reinvent the meeting in order to get better participation and outputs. Read virtual meetings gone wrong – a guide for the bewildered.

May 14, 2020

There are approximately 2,000 licenced independent financial services intermediaries (brokers) in Ireland. These range in size from the small, proprietary, one-person firms to the large multinationals. Compliance pressures Brokers across the island of Ireland face increasing compliance costs, which in many cases threaten the viability of the business. While compliance is a necessary good in financial services, it is an increasing material cost in such operations. Indeed, many Chartered Accountants are directly engaged in the financial services industry with the requisite authorisations to transact business on behalf of clients. The compliance obligations for members of the Chartered Accountancy profession, who also operate as brokers, have also increased in recent years. Financial sustainability For those brokers with scale, the capacity to absorb the costs of increasing compliance is more sustainable than their smaller contemporaries. However, what might happen if the Irish market sees a significant contraction, as is already in evidence, in commercial and retail activity? What happens if companies close and, consequently, financial services activity begins to shrink quite dramatically? The smaller broker has always tended to be comfortable navigating a market where recurring income is less than total overheads, the gap being filled each year through new business. What happens if there is no new business activity or a level of reduced activity that is essentially over-serviced by the very existence of 2,000 or so practitioners? Significant consolidation Having endured the decade-long hardship after the financial crisis, many brokers downsized and right-sized their operations just to continue in business. Those who could not redesign their operating models tended to sell their businesses to contemporaries “in the trade”. This trend is likely to emerge again, but possibly on a scale not seen in this country before. Broker Exchange Ireland – BXI Isn’t it odd that when a person wants to buy some life assurance or set up a pension, they have around 2,000 options to get specialist and qualified advice? However, if you are one of the 2,000 brokers in Ireland and you are considering buying or selling your business, where do you go for specialist and qualified advice? BXI is Ireland’s only specialist firm of advisors in the mergers and acquisition arena for Irish brokers. We have unrivalled experience in valuation setting, deal navigation, negotiation and completion. If you would like to talk to us about any of these issues relating to your own brokerage or clients for whom you provide accounting and auditing services, don’t hesitate to contact us at info@bxi.ie or www.bxi.ie Shay Keane is the Managing Partner at Broker Exchange Ireland, BXI. (This article is sponsored by BXI.)

May 14, 2020
Governance, Risk and Legal

Many companies are facing unprecedented uncertainty about their immediate prospects in an environment which may challenge or disrupt their usual management and governance processes. The FRC have issued guidance highlighting some key areas of focus for boards in maintaining strong corporate governance and provide high-level guidance on some of the most pervasive issues when preparing annual report and other corporate reporting including Interim Reports. Interim reports Directors will need to exercise judgment about the nature and extent of the procedures that they apply to assess the going concern assumption at the half‐yearly date.  This might include disclosures of: any material uncertainties to going concern; assumptions made about the future path of COVID-19 and the public health responses; the projected impact on business activities; use of government support measures; and access to bank and other financing.  It is a matter for a company to decide whether to engage their auditors to perform an interim review engagement– it is not a legal or regulatory requirement.  However, feedback the FRC has received from investors indicates that such a review provides valuable assurance, and this may be particularly so in the current environment.   Read the full guidance here.    

May 14, 2020

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