London Society News

Chartered Accountants identify NI Protocol, now replaced with Windsor Framework, as main opportunity for business Significant increase in perception of number of businesses facing financial distress 22 March 2023 - A survey of chartered accountants in Northern Ireland shows that more than half (54%) believe that prospects for the economy in the year ahead are ‘poor’, with only 7% rating the outlook as ‘good’ or ‘very good’. Three quarters of those surveyed believe that the Northern Ireland economy is either contracting or stagnant, with only one in four believing the economy is growing at present. A long list of negative influences cited in the survey was headed by political instability and cost of living pressures, with 82% of those surveyed saying that the NI Executive should be restored. The survey from Chartered Accountants Ulster Society also shows a significant rise in the number of Chartered Accountants who feel that the number of businesses in financial distress was increasing (77% in 2023, up from 44% in 2022). Despite a difficult year ahead, respondents identified the Northern Ireland Protocol as the biggest opportunity for Northern Ireland in the years ahead, citing its potential to provide a unique trading position for businesses here. The survey was conducted prior to the publication of the Windsor Framework, which replaces the Northern Ireland Protocol. A low cost base, high skills offering, geographic location, English speaking workforce and the ability to potentially lower corporation tax were also cited as plus points for the local economy in terms of attracting more inward investment. Key Issues The biggest negative issues for the year ahead are ‘rising inflation and squeeze on living standards’ (96%), ‘cutbacks in Government spending’ (95%) and ‘current political conditions in Northern Ireland’ (93%). 75% of those surveyed identified ‘EU Exit’ as a ‘strongly negative’ or ‘negative’ factor on the performance of the local economy.  The survey showed that the rise in the cost of doing business is leading most businesses to absorb the costs, or pass on the price rises to customers, with only 10% having to look towards staffing cuts at present. EU Exit The survey did show some modest positives for business from EU Exit in terms of sales/ turnover growth and export growth outside the UK. However, the predominant impacts for business were negative, particularly in the areas of business costs, purchases from Great Britain, access to EU workers, profits growth and investment plans. A majority of respondents to the survey (78%) held a strong belief that Northern Ireland’s reputation had been damaged by the handling of the EU Exit process. 72% of those surveyed believe that the Northern Ireland Protocol presents an opportunity for Northern Ireland and 76% believe that the Northern Ireland Protocol challenges can be addressed. The Windsor Framework is the most recent attempt to overcome these challenges.  Governance 82% say that the Northern Ireland Executive should be restored, while 69% feel that more powers should be given to Permanent Secretaries within government departments until the Executive is restored. The survey found mixed views on whether there should be further devolution of tax powers in Northern Ireland, with 44% saying ‘yes’ and 40% saying ‘no’. Corporation Tax was considered the most suitable tax to devolve, followed by short haul Air Passenger Duty and the Apprenticeship Levy. Skills Attracting and retaining people and skills dominate the challenges facing businesses in Northern Ireland, with 85% saying that it was becoming ‘increasingly difficult’ to find the right people for jobs, while 78% felt there was ‘a lack of skilled people to fill new skilled positions in Northern Ireland’. 80% of chartered accountants surveyed are expecting a fall in wages in real terms, with 25% expecting no change in wages or a pay cut this year. The survey shows that most chartered accountants expect hybrid working to continue in the year ahead. Emma Murray, Chairperson of Chartered Accountants Ulster Society which represents over 5,300 Chartered Accountants in Northern Ireland said:  “The survey results highlight that chartered accountants are seeing some significant warning signs for the local economy with a period of stagnation and fairly poor prospects ahead. “They are pointing to a long list of negative influences including the current political impasse in Northern Ireland, the squeeze on living standards, cuts in government spending, and the increased cost of doing business, plus the impact of the UK’s exit from the European Union. “Our members want the Executive to be restored so that we can begin to work together to address these issues for the benefit of everyone in Northern Ireland. “Our survey shows that a majority of businesses believe that the NI Protocol, now the Windsor Framework, with access to both the British and EU markets, presents a significant opportunity for Northern Ireland. “They believe it is vital that we have leadership taking key decisions, encouraging business investment and better public services. The longer that political instability continues, the more difficult it is for local business to contribute to growth, jobs and a better quality of life in Northern Ireland.” Independent economist Maureen O’Reilly, who formulated and analysed the survey of Northern Ireland’s Chartered Accountants said: “These findings provide a very valuable insight into the underlying challenges and opportunities for the NI economy from the perspective of chartered accountants at the cold face of doing business across the private, public and third sectors here.  “Their main focus is on the financial health of the businesses and organisations they represent and it is concerning that the share of members who believe that financial distress among businesses is on the increase (77%).  This is the highest share recorded over the last 7 years by a considerable margin.  “Businesses are trying to deal with rising costs by absorbing and/or passing them on through increasing prices while at the same time trying to hold on to staff, a difficult balancing act to juggle that can only last for so long if those inflationary pressures persist.    “The current political and economic environment is extremely difficult which unsurprisingly is dampening the mood around prospects for the year ahead.  However, members do see opportunities going forward and the NI Protocol (and now Windsor Framework) is certainly viewed as the main catalyst to support the region to move on to a stronger growth path.  “Members believe economic success should be measured in terms of higher productivity and higher wage jobs sending a clear message around where policy focus should sit. However, they are largely split on whether the devolution of tax varying powers to Northern Ireland should be pursued, the main concern being the need for much greater political stability before this should be pursued further. It is noteworthy that corporation tax remains the most popular tax to devolve here.”  A summary of key findings: 23% felt that the economy was growing; 33% of local Chartered Accountants feel that the local economy is stagnant; 43% believe that the economy is contracting. 77% say that the number of businesses in financial distress is increasing. 2% say the number is falling. 16% say the number is unchanged. 7% feel the outlook for the NI economy in the year ahead is ‘Good’ or ‘Very Good’; 40% feel the outlook is ‘Fair’; 54% say ‘Poor’ or ‘Very Poor’. Rising inflation and squeeze on living standards (96%), Cutbacks in Government spending (95%) and current political conditions in Northern Ireland (93%) are seen as the most negative issues for the economy. 72% of those surveyed believe that the NI Protocol presents an opportunity for Northern Ireland. 76% believe that the NI Protocol challenges can be addressed. 85% say their business or organisation is experiencing skills shortages (up from 62% in 2022) 82% want the NI Executive to be restored. 69% feel that more powers should be given to Permanent Secretaries within government departments until the Executive is restored. 254 Chartered Accountants took part in the survey. ENDS 

In recent days, Institute President Pat O'Neill kicked off a member outreach trip to North America, where almost 1,000 members of Chartered Accountants Ireland live and work. Overall, 10% of Chartered Accountants Ireland's total membership is based overseas, so supporting and representing these members is a key priority.  Pat and Council colleague Pamela McCreedy hosted a member event in Toronto on Friday evening followed by another in New York on Monday evening. In between, the team also had the opportunity to partner with Ireland Inc for this year’s Ireland Day held in the New York Stock Exchange, taking part in a roundtable discussion to mark St. Patrick’s Day.  The contribution of Chartered Accountants from Ireland in practice and industry all around America was a central theme over the few days. Pat O’Neill spoke about the Institute’s pride in its members' successes there and it is further evidence of the way the Chartered qualification can be used as a global passport.  In addition to sharing updates with members, gathering feedback, and finding new ways to deepen engagement, the trip gives the Institute a chance to engage with partners and colleagues including Chartered Accountants Worldwide Network USA, IFAC, the Northern Ireland Bureau, The Ireland Funds, and the National Association of State Boards of Accountancy, with whom the Institute recently extended its Mutual Recognition Agreement which enabling members to access the US CPA qualification (with a similar arrangement for their members coming to Ireland). To view pictures from the New York member event click here. 

OECD countries will not close the gender pay gap for at least 50 years if we continue at the current pace of progress, despite the potential economic gains, writes Ger McDonough To mark International Women’s Day, PwC released the results of our Women in Work Index, assessing women’s employment outcomes across 33 Organisation for Economic Cooperation and Development (OECD) countries. The Women in Work (WIW) Index shows that female workforce participation across the 33 OECD countries increased slightly in 2021. Progress towards gender equality remains too slow, however.  In fact, based on OECD countries’ gender pay gap of 14 percent in 2021 and historical rates of progress towards gender pay equality, our findings show that it will take more than 50 years to close the gender pay gap. This means that a 20-year old woman entering the workforce today will not see pay equality in her working lifetime. At the same time, our analysis also shows that, by closing the gender pay gap, OECD countries could make trillion-dollar gains. By increasing women’s average wages to match those of their male counterparts across the OECD, female earnings would rise by more than US$2 trillion per annum, our research has found.  In Ireland, closing the gender pay gap could boost women’s earnings by US$4.32 billion per annum (8%) and increasing women’s employment could boost Irish GDP by US$50 billion per annum or nine percent. Ireland ranks in 12th place overall out of the 33 OECD countries in our latest WIW Index, up from 15th place in the year prior. This improvement was in large part due to a rise in the female labour participation rate from 65.6 percent to 69.6 percent. Our research also reveals that just 25 percent of women in Ireland have an established plan to advance their career with their current employer, however, compared to 35 percent of women globally.  If the rebound from the COVID-19 pandemic has taught us anything, it is that we can’t rely on economic growth alone to produce gender equality—unless we want to wait another 50 years or more. Employers can make a material improvement to women's empowerment in the workplace now by focusing on fair reward, autonomy, inclusive leadership and instituting a data-driven diversity strategy. Women working full-time in person have the lowest empowerment score in our WIW Index. This trend follows suit for men—suggesting that autonomy over how, where and when people work fuels feelings of empowerment across the workforce. According to our WIW Index, the women who are most empowered also have greater opportunity to work remotely (74%). However, close to half (48%) of women can’t do their job remotely.  Of the 11,285 women who can, 29 percent are working remotely full-time, and 56 percent had some level of hybrid work pattern. Autonomy fuels empowerment for both women and men, but women currently have less autonomy over how, when and where they work.  Demand for flexibility is a talent-wide proposition, and one that cannot be ignored by employers as they seek to enhance diversity, fuel engagement and innovation, and position themselves as an employer of choice. Ger McDonough is Partner and Leader of the People and Organisation Consulting Practice at PwC Ireland 

The Windsor Framework provides for the smoother flow of goods between Britain and Northern Ireland, but is it enough? asks Eoin O’Shea It's been just over ten years since David Cameron, the UK's then Prime Minister, unveiled the idea of holding a referendum on EU membership. On that fateful day, 23 January 2013, Cameron made the rather prophetic statement: "If we leave the EU, we cannot, of course, leave Europe. It will remain for many years our biggest market, and forever our geographical neighbourhood. We are tied by a complex web of legal commitments." The latest addition to the post-Brexit tsunami of legal commitments entered into by the UK and the EU, including a 177-page Withdrawal Agreement and a 2,530-page Trade and Co-Operation agreement, is the Windsor Framework. The Windsor Agreement aims to update the 63-page Northern Ireland Protocol agreed by the UK and EU as part of the Withdrawal Agreement.  The Windsor Framework – in reality, several legal and political documents – was launched last week by the president of the EU's executive branch, Ursula Von Der Leyen, and UK Prime Minister Rishi Sunak at Windsor Guildhall.    The Windsor Framework came about because the Northern Ireland Protocol to the Withdrawal Agreement operated, in parts, like a manual for a United Ireland. Back when former UK Prime Minister Boris Johnson was 'getting Brexit done', there was a fear that Ireland, north and south, might have different laws concerning trade, the movement of goods, customs, taxes and the like, leading to a hard border on the island of Ireland. To counter such a border, it was decided by the UK and the EU that Britain would have its own British laws on those border/market/trade issues, and the Island of Ireland (north and south) would follow EU rules. Leaving Northern Ireland subject to EU laws, the oversight of the EU court of justice in Luxembourg, and the full panoply of EU officialdom. One view of the Northern Ireland protocol was that it permitted goods to flow between Northern Ireland and Ireland/EU without customs checks, duties, or paperwork. It also allowed for the free movement of goods between Northern Ireland and the rest of the UK.   Economist John Fitzgerald dubbed the situation as providing "unique dual access to both the British and the EU markets". Similarly, Michael Gove, then a member of the UK cabinet, stated: "That means that businesses in Northern Ireland have the opportunity to enjoy the best of both worlds; access to the European single market, because there's no infrastructure on the Island of Ireland, and at the same time unfettered access to the rest of the UK market." Unfortunately, the Northern Ireland protocol didn't work. Neither politically nor economically.  Excessive paperwork and administrative uncertainty made it difficult, expensive, and slow for goods to move to and from Northern Ireland and Britain. Imports and exports between Ireland and Northern Ireland skyrocketed as businesses in Northern Ireland found buying goods from Ireland/EU easier than from the neighbouring island. In the first five months of 2022, for example, exports from Ireland to Northern Ireland increased by 42 percent compared to the previous year. Politically, the original Northern Ireland protocol caused significant problems, including a boycott of the Stormont Assembly by the DUP and a threat by the UK to unilaterally override, with domestic legislation, the Protocol's operation.  All sides were fearful for the continued operation of the Good Friday Agreement and the possibility that relationships between communities within Northern Ireland and north/south and east/west ties could be negatively affected, perhaps for a generation. In short, all roads have been leading to last week's Windsor Framework for some time.  The highlights of the Framework include the following: The introduction of a trusted trader system in Britain to facilitate smoother transport of goods to Northern Ireland; Identity and physical checks on goods are to be drastically reduced; The same food will be available on supermarket shelves in Northern Ireland as in the rest of the UK; Goods moving from Britain to Northern Ireland that are destined for the EU or at risk of entering the EU will be subject to full customs checks and controls; People in Northern Ireland will be able to get medicines, including new medicines, at the same time and under the same conditions as people in the rest of the UK; Certain goods travelling from Britain to Northern Ireland may carry labelling "not for EU", ensuring that products remain in Northern Ireland; Consumer-to-consumer parcels will be entirely exempt from the main customs requirements; Travel to and from Britain with pets will be easier and require reduced documentation; Garden centres in Northern Ireland will have an easier time stocking plants, shrubs, trees and seeds from Britain; The UK has agreed to share live data with the EU on movements of goods from Britain to Northern Ireland to give additional comfort to the EU that goods transfer rules are being adhered to and that the single market is not at risk; and The number of proposed changes to the application of EU VAT and excise duty requirements to Northern Ireland.  It has been agreed that members of the Northern Ireland Assembly might, by way of a 'Stormont Brake', to stop new EU law from applying in Northern Ireland (as a last resort). It is also proposed by the parties that there be enhanced involvement of Northern Ireland interests in the operation of the joint committees set up between the UK and the EU on the management of relationships. As can be seen, the arrangements under the Windsor Framework provide for a much smoother flow of goods between Britain and Northern Ireland than was the case under the Northern Ireland protocol. But, as also can be seen, the arrangements are not as smooth as before Brexit. Eoin O'Shea is a Barrister at Law and Chartered Accountant

While uncertainty over energy price shocks and supply continue to dominate the national conversation, there is also an opportunity for Ireland, writes Colm O’Neill The first documented energy crisis unfolded in the late 16th century when industrialised regions in Europe literally ran out of trees to burn. This caused enormous political and social upheaval but also generated tremendous opportunities for countries with the natural resources and ingenuity to capitalise on the transition. It was the start of the Industrial Revolution. Ireland’s green energy advantage Today, Ireland has everything required to become a global green energy powerhouse. Our position on the northwest corner of Europe offers some of the best available offshore wind resources. The strength of our skill base and our strong collaborative research community mean we also have the ingenuity to capitalise on it. Ireland has a large offshore wind generation capacity, so the potential is clear. If we act quickly and with purpose, Ireland could achieve energy independence and become a hub for energy-intensive industries and a net energy exporter.   But ours is not the only country in Europe with this potential. Scotland is investing heavily in its offshore wind resource, as is Portugal, which also has the additional benefit of significant solar capacity.  Time to act Although the benefits are long-term, decisive action is required now if Ireland is to grasp the opportunity. However, change is needed in three crucial areas: planning, regulation and gas infrastructure. Planning The energy transition will require spending billions of euro on constructing energy infrastructure on a scale never before seen in this State. However, despite An Bord Pleanála having a statutory timeframe to decide on applications for wind energy projects by June, the average time for a decision is over a year, and some projects have waited for more than two. This slow pace puts Ireland on the back foot when competing for international investment. The current review of the planning system in Ireland urgently needs to address this critical area. Regulatory change required Commission for Regulation of Utilities (CRU) was established in 1999 to support the liberalisation of energy markets in Ireland as part of Europe’s first liberalisation directives. Implementing this was a challenging task: while there has been active customer participation and switching at the retail level, there has been less investment in new thermal generation capacity. The CRU’s mandate has expanded over time to include other utilities and energy safety, and the CRU now plays a central role in Ireland’s energy transition.  To reflect the scale and importance of this mandate, the CRU needs investment in resources, a review of governance structures and changes to the agency’s statutory mandate. These changes are vital if the regulator is to support Ireland’s development as a major European energy powerhouse, with this objective at the centre of their strategic agenda. Gas reliance Ironically, transitioning to a modern, low-carbon energy system requires lots of energy. And for many years, the generation of that energy will rely heavily on natural gas. Despite the undoubted potential of an array of ‘green gases’ from biomethane to hydrogen, the reality is that natural gas will need to be part of our energy system for decades to come. Energy policy must recognise this. We currently import around 75% of our natural gas demand through a pipeline from the UK. Any realistic strategy for energy independence must have a plan for reliable sourcing of natural gas while at the same time promoting investment in developing ‘green gases’. This includes building facilities to import liquified natural gas (LNG) and developing storage for natural gas locally. This can be done while also supporting exciting developments in hydrogen and biomethane that are already happening across Ireland. Gas of all types will be central to our energy system, and we need a plan and investment that delivers security in both the short and long term.  We need to be pragmatic The actions outlined above are very straightforward but far from easy. Progress is often sacrificed to idealism and dogma. We need to be pragmatic; we need to take calculated risks and accept that we may take action that may not deliver the perfect outcome immediately but will help us bridge to a greener energy future.   The benefits of acting now will be reaped in the coming decades, not the immediate months or years. This is a time for bold visionary decisions on the part of both investors and the government. These are multi-generational initiatives that need to be actioned today. The unfolding climate catastrophe won’t wait. The window of opportunity for Ireland to become a global energy transformation hub will close. To quote the Chinese proverb, “The best time to plant a tree is 20 years ago. The second best is now.” Colm O’Neill is Head of Energy, Utilities & Telecoms at KPMG

Paper has been submitted to Government and calls for accelerated delivery of social, affordable, and cost rental housing   Immediate short term tax measures vital to stem the flow of a record numbers of families becoming homeless  23 February 2023 – Focus Ireland and Chartered Accountants Ireland have today launched a briefing paper which calls on the Government to introduce targeted measures to keep small-scale landlords in the private rented market to help ease the housing crisis.   The new paper gives further credence to the report by the National Economic and Social Council (NESC) at the end of last week which recommended the Government consider further action to improve the tax treatment of landlords.   While Focus Ireland and the Institute agree that the long-term government objective of increasing the delivery of social, affordable, and cost rental housing is the correct course of action, the joint briefing paper highlights the short-term challenge presented by the large-scale departure of private landlords now taking place.   The paper calls for urgent measures to address this mismatch in supply. It sets out seven fully costed proposals primarily using tax policy as a lever to encourage small-scale landlords to remain in the residential rental market in the medium to long term and help to prevent homelessness.   Commenting Pat Dennigan, CEO of Focus Ireland said:  “One of the biggest causes for families becoming homeless in recent times is that they are losing their homes in the private rented market as landlords are selling up and leaving the market. Focus Ireland believes that the Government must take action to encourage small-scale landlords to stay in the market as this would help to cut the record number of households becoming homeless. Urgent policy responses are required which should be targeted at landlords who are considering evicting their tenants to sell over the next number years, convincing them it is in their interest to stay, or not to evict when they are selling.”   Commenting Dr Brian Keegan, Director of Public Policy, Chartered Accountants Ireland said: “Small landlords are an essential feature of a fully functioning residential property market, and properties owned by these landlords are more likely to be in regional, less densely populated parts of the country, providing much needed rental stock in areas that are not as attractive to institutional investors. Renting as an investment is becoming less attractive for these smaller landlords however. Increased regulation in recent years has been driven by efforts to provide greater security for tenants in the face of a shortage of rental accommodation, but in many cases, these have increased the likelihood of small landlords leaving the market, exacerbating problems they were intended to remedy.”   “Small-scale landlords cite the restrictive taxation obligations on any rental profits accruing to them. After settling taxes on any profits, some small landlords face a current loss on rental income. We are asking for Government and its agencies to consider our proposals for the small-scale private landlord to encourage their continued involvement in the market to ensure tenants are protected.”   The proposals outlined in the joint briefing paper include:  Increase wear and tear rates from 12.5 percent to 25 percent per annum to facilitate investment in the maintenance of properties and encourage better standards where renovations do not result in the termination of an existing tenancy under section 34 and the property remains in the private rental market for the following five years.  100 percent capital allowances for retrofitting costs in the year of work where landlords retrofit a property to improve its energy rating, where renovations do not result in the termination of an existing tenancy under section 34 and the property remains in the private rental market for the following five years.  Parity in taxation of corporate and individual landlords: a flat rate of 25 percent on Case V income for small landlords who opted to become ‘professional landlords’ by waiving their rights under section 34 of the Residential Tenancy Act (2014), giving additional security to their tenants.   Deduction for LPT: allow local property tax as a deduction against rental income.   Align allowable rental expenses with normal trading deductions: expenses available for deduction against rental income should become less prescriptive and more in line with normal trading deductions. In the context of taxing rental profits earned by an active class of professional landlords, the broader based deduction for financing costs under Case I principles should apply.   Succession reliefs: Professional landlords should be given access to succession reliefs, such as CGT retirement relief available to other business owners, to improve the long term investment proposition of the residential rental business.   CGT relief for rental properties acquired with tenants-in-situ: CGT relief of four percent per annum would accrue on an annual basis for the length of time the asset remains as a rental property.  Download the paper here.  ENDS     

Brid Heffernan, Tax and Public Policy Lead, Chartered Accountants Ireland said “The TBESS amendments announced today are an encouraging example of government taking business feedback on board and responding proactively.   “Businesses will benefit from the increased level of relief which moves from 40% to 50% of eligible costs, and businesses with unmetered energy sources will be eligible to apply for a new grant outside of TBESS. These measures along with the reduced qualification threshold of 30%, and the extension of the scheme to 31 May, should allow it to reach its potential.  “Crucially, the reduced threshold will be back dated to September 2022, when the scheme was introduced, meaning that qualifying businesses should be able to make claims for the costs incurred during the winter months. “When first announced, TBESS represented a potential lifeline for businesses, but in practice it fell short, something that we highlighted to government on behalf of our members. Simple and speedy implementation of the measures announced today are key to its success in the coming weeks and months.”

The European Commission has proposed to simplify current rules and allow for greater fiscal flexibility for Member States. Prior to March 2020, Ireland was required to maintain a budget deficit of no more than 3% of GDP and have a Government debt-to-GDP ratio not exceeding 60%. These fiscal rules have been suspended since the beginning of the COVID-19 global pandemic and remain suspended due to the war in Ukraine and the economic uncertainty this has caused. Under the Commission’s proposals, the structural elements of the rules have been removed. The economic sanctions for non-compliance with the rules are also being reduced to try ensure greater ownership of the rules at a national level. In addition, national Fiscal Councils will play a greater role in assessing the underlying assumptions of economic plans submitted by Member States. In Ireland’s case, this would mean the Irish Fiscal Advisory Council would carry out the necessary assessment. As part of the common EU framework, the European Commission will propose a ‘reference fiscal adjustment path’ covering four years to ensure Member States have debt on a downward trajectory and a deficit of no more than 3% of GDP. Member States would then submit their medium-term fiscal plans. The European Commission has launched a process to review the fiscal rules, which sets out debt and deficit rules for Member States of the European Union, and propose amendments. These changes are subject to approval, and as the European Commission intends to reach agreement with Member States on the revised Fiscal Rules for 2024 budgets, this would mean agreement being reached no later than October 2023. It is not yet clear if Ireland would have to domestically legislate for these changes.    Further information is available from the Parliamentary Budget Office here.

Work to achieve parity in the workplace is often assigned to women, but research shows that when men advocate for equity, everyone wins, says Andrea Dermody Gender equality issues are nothing new in the boardroom. Grant Thornton’s 2022 report Women in Business: Opening the door to diverse talent revealed that just 33 percent of senior leaders globally are female. Time and again, research shows that the more diverse a company, the better its performance. So perhaps it’s time to shift the focus and consider how men can play their part in the pursuit of parity. Men as allies Too many organisations still miss the mark on gender balance efforts by focusing gender initiatives solely on what women can do to level the playing field—or, at best, inviting men to attend diversity and inclusion events designed for women. An alternative drive towards ‘allyship’ is, however, steadily gaining pace. For men, this is about acknowledging and using their privilege to help others. When they do, they can help to share knowledge, break down barriers, and promote equal access. Why allyship matters Notably, the more women occupying a seat in a company’s C-suite and corporate board, the better its sustainability, corporate social responsibility, and business performance. With this in mind, having men as allies should be a business imperative. Empowering men is one pathway towards allyship. Male allies can help advocate for women’s voices to be heard, and that commitments to equity and inclusion are taken seriously. But believing in the cause is only part of the equation. Men must actively work to achieve it.  Grant Thornton’s 2022 research suggests male allies can support progress towards gender parity among senior leadership in several impactful ways, from exerting influence to change behaviours in their circles to facing down sexist behaviour and supporting and encouraging female colleagues. The result is reciprocal reward. The business performs better, and male allies experience personal growth, broaden their network, and, most importantly, experience the associated benefits of a unified, energised and collaborative team. Allyship is a verb, not a noun For men, the message is clear: you must take action. W. Brad Johnson and David G. Smith, authors of Good Guys: How Men Can Be Better Allies for Women in the Workplace, offer five ‘rules to live by’ for men who aspire to better ally behaviour in the service of promoting tangible gender equity in the workplace: Allyship is a journey, not a destination. Nobody ever “arrives” as an ally. Allyship is with, not for. Make your ally actions collaborative.  Allyship perpetuates autonomy, not dependence. You must hold yourself accountable for the net outcome of your ally behaviour. Allyship is about decentring, not standing in the spotlight. Speak less, hand the mic to women with key expertise, and structure projects, so women gain credit.  Allyship is critical to improving the status quo. Examine longstanding practices that perpetuate systemic inequities. Overcoming barriers  Allyship is growing trend, as is training in this area, but there is a gender gap in the perception of what success here means. Research shows that women and other underrepresented groups see less evidence of measurable workplace change than men. In short, men are essentially worse allies than they think. In this no-holds-barred report released in 2018 by the Harvard Business Review, the authors also suggest there can be a cost to men who act as allies. The authors describe the ‘wimp penalty’ of allyship, where men who advocate for female colleagues are seen as less competent by both men and women.  Finding the balance Barriers aside, it’s clear from the evidence that progress towards gender balance in senior leadership is accelerated when men act as allies. The more positive interactions men have with women in professional settings, the less prejudice and exclusion they tend to demonstrate. Here are some practical suggestions for closing the allyship gap: Make allyship an organisational value and priority: ensure senior leaders can talk clearly about the importance of allyship as it connects to core business outcomes, demonstrating how they value it personally and in their business. Listen and collaborate: demonstrate generous listening, show that you understand, and take meaningful action. Move from awareness to action: consider actions and techniques to overcome, challenge, disrupt, and prevent these behaviours and inequities. Create a community of allies who share and grow: allyship is not a ‘one-and-done’ process. Allow your communities to continue to learn and develop the skills they need to support the women in your organisation. There is a role for allyship to play in gender parity efforts. Ensuring that men are given a dignified, respectful role in becoming allies will bring wide-ranging benefits associated with a truly inclusive team. And then everyone wins. Andrea Dermody is a diversity and inclusion consultant, speaker and coach at Dermody

The Leinster Society are delighted to announce that, with the generosity of members in attendance at the Annual Christmas Lunch, they raised a huge €22,300 for charity partner Aware. Thank you to the members in attendance and also to Grant Thornton who very generously contributed to this total with their €5,000 donation. With this money Aware will continue to provide free support, education and information services to people impacted by anxiety, depression, bipolar disorder and related mood conditions. The Leinster Society would also like to thank every member who took part in the toy drive at the event, and brought a gift for a child. These gifts were then donated among Barretstown, YPAR, One Family, Carr's Child and Family Services, the Santa Fund, St Michael's House, Children's Health Ireland (CHI) at Crumlin and Barnardos Tallaght. This toy drive is a very important part of the Leinster Society Christmas Lunch, and the below note from one of our charities, The Santa Fund, highlights just why: 'A family with 4 children under 10 lost their mother just before Christmas. The Leinster Society will play Santa this year and hopefully for many years to come as the youngest is 4 years old. Happy Christmas to your members'. Without the support of the members in attendance this wouldn't be possible.

The benefits of AI extend across all business functions, but its potential for the finance function is especially striking, writes Paul Tully Organisations are investing in artificial intelligence (AI) to improve efficiency, reduce operating costs, and open up new business opportunities. From smart map apps and fuel consumption optimisation, to sophisticated financial tools for fraud detection, AI is becoming embedded in businesses in every sector. The question for those looking to harness the power of AI in the best way possible, is whether to build, buy, outsource the technology, or utilise a combination of all three. At a high level, AI is used to unlock the power of data to deliver better predictive and analytics capability. The technology can explore “what if” scenarios and offer insights into competitive threats and market opportunities that might arise in the future. The opportunities extend across all business functions, but the potential benefits for the finance function are especially striking. AI benefits for CFOs A growing number of CFOs are using AI to address changes to accounting regulations. We have seen large companies save manpower by using natural language processing (NLP) to review lease contracts, for example. Without AI, this would be a labour-intensive process. CFOs also need to balance the delivery and growth of performance targets, while ensuring compliance with legal and accounting regulations. AI offers enhanced insights that can support strategic decision-making in asset valuation, predicting future customer trends, and identifying market growth opportunities through predictive modelling. The ability to create fraud detection processes leveraging AI, can also help CFOs to create a robust control environment and manage risk more effectively. Options here include mechanisms that recognise suspicious behaviour and classify alerts as high, medium or lower risk. Finance operations and control Perhaps no part of any enterprise has as many repetitive, routine tasks as the finance department. Inputting invoices, tracking receivables, and logging payment transactions are high-cost, low-return activities, and not of high interest to employees. AI can increase efficiency by automating manual people-intensive finance processes, such as the order-to-cash cycle, helping to predict customer debts and improve working capital management. Accurate, timely and consistent data, generated automatically, can help finance teams to add value to their organisation, leveraging customer behaviour modelling to identify opportunities to grow margins, while also forecasting with speed and accuracy. Furthermore, using AI to analyse internal financial control points and improve fraud detection can create a more robust reporting environment. Banks and other financial services organisations are leaders in establishing or acquiring their own AI capability. This is unsurprising given the cost and regulatory challenges facing the sector. They are using the technology in customer support, automated loan approval processes, “self-repairing” mobile banking apps, and payment optimisation. They also use AI for automated fraud detection, anti-money laundering checks, customer portfolio management, electronic trading, and property market intelligence. Third-party solution business Professional services firms are leading the field in developing third-party AI solutions for clients. These range from bespoke solutions for individual clients to more general products in areas such as automated insurance claims processing, regulatory compliance checking, HR support, and the use of machine vision to monitor automated production lines. Third-party solutions are not confined to the professional services sector, or the broader technology and software services industry. Organisations with well-established AI capabilities are making their solutions available on the open market as an additional business line. Paul Tully is Head of Finance Analytics at EY Ireland AI Labs

Following on from its webinar on the Corporate Sustainability Reporting Directive (CSRD) it held last week, the Department of Enterprise, Trade and Employment (DETE) has this week issued a public consultation seeking the views of interested parties on the member state options in the CSRD. More details can be found here and you can access the consultation here. Even though it is not consulting on direct effect/mandatory provisions, comments and questions on all aspects of the CSRD are invited to facilitate DETE’s work in the transposition of the CSRD. The consultation is open until 5pm on Thursday 9 March 2023. For reader’s information, the CSRD is a European directive requiring certain companies to disclose information on sustainability-related information. The directive aims to modernise and strengthen the rules about the type of social and environmental information that companies will have to report. The CSRD envisages the adoption of European Sustainability Reporting Standards which seek to ensure that investors and other stakeholders have access to the information they need to assess investment risks arising from climate change and other sustainability issues. They seek to create a culture of transparency about the impact of companies on people and the environment. The CSRD was approved by the European Parliament and the EU Council in late 2022 and was published in the EU Official Journal on 16 December. Following this publication, EU member states have 18 months to transpose the directive into their own national laws. Finally, readers may also be interested in accessing the speakers’ PowerPoint slides from the DETE webinar to get further information on the various presentations made. There was a presentation from DETE, PWC and EFRAG on the CSRD and a presentation by DETE on a Proposal for a Directive on Corporate Sustainability Due Diligence.

Revenue has published a range of preliminary statistics on PAYE for 2022, including information on 2022 Income Tax returns filed to date and the end of year tax position for PAYE taxpayers yet to file. Employees should now be able to access their Preliminary End of Year Statement for 2022 (“the Statement”) through myAccount.  The Statement is based on income and statutory deductions reported by employers, pension providers and the Department of Social Protection. The Statement will indicate whether the correct amount of tax has been paid in 2022. To obtain a final Statement of Liability, employees must complete an income tax return, returning details of additional income, allowable reliefs, and/or available credits (if any).    Commenting on income tax returns for 2022 filed to date, Ms. Aisling Ní Mhaoileoin, Revenue’s National PAYE Manager, said: “Over 370,000 tax returns have been processed in respect of PAYE taxpayers who have already filed their return for 2022, this is up over 30 percent on the same period last year. Approximately 275,000 of these returns resulted in an overpayment of tax and €193 million has already been refunded to individuals’ bank accounts as a result.  The major difference for 2022 is the introduction of the Rent Tax Credit in the Budget. Unlike usual Budget tax credit changes which apply for the following year, this credit applies retrospectively for 2022 and can be claimed on an Income Tax return for the tax year 2022. The value of the credit is up to €500 per year for individual taxpayers and up to €1,000 per year for jointly assessed married persons or civil partners. Of the 2022 tax returns received to date, approximately 78,400 claims have been made in respect of rent tax credit. In addition, we expect that from mid-February, customers will be able to claim Rent Tax Credit for 2023 in real-time through the ‘Manage Your Tax’ option in myAccount.” 

With new EU cybercrime rules coming down the line, now is the time to step up your organisation’s ICT security strategy, writes Neil Redmond Increased regulatory scrutiny is among the five most important ways businesses have been impacted since 2020, according to the Irish senior executives who participated in PwC’s Global Digital Trust Insight Survey 2023. Regulators are becoming increasingly cognisant of the risk posed by cyber threats to businesses and their customers. As part of new legislation, the European Union (EU) aims to address cyber, and information and communications technology (ICT) risks. By understanding these regulations and knowing how to prepare, organisations can act now to align with the requirements of new EU legislation. Four key pieces of the new legislation are introducing additional requirements for business: the Network and Information Security Directive Revision 2 (NIS2); the Digital Operational Resilience Act (DORA); the Digital Services Act (DSA); and the Digital Markets Act (DMA). How can your business best prepare to comply with these legislative changes? By taking the following key actions, you can ensure that your organisation is ready ahead of time. 1. Assess the maturity of your organisation’s cybersecurity Reviewing your business’s systems and information security is critical to prepare for the upcoming regulations. Assessing your organisation’s cybersecurity and ICT risk management controls can provide executives with valuable information regarding the business’s cyber risk profile. By finding potential compliance gaps in their cybersecurity, firms can improve their posture before legislation comes into force, mitigating the risk of non-compliance and subsequent consequences, such as brand damage and financial penalties. 2. Test your business’s operational resilience at the enterprise level As part of a cyber maturity assessment, evaluating the organisation’s resilience to disruptive events will be key in preparing for upcoming regulations. While executives may believe that their business is robust and can continue to operate in adverse circumstances, the testing of business continuity and disaster recovery plans allows businesses to measure their resilience and continuously enhance their cybersecurity posture. The first step is to ensure that the organisation has contingency plans for different scenarios. These scenarios should be exercised and iteratively improved to ensure that they are fit for purpose. Examples include switching failing systems to backups or simulating a response to a malware attack on your network. All relevant stakeholders, including third parties, should participate in the testing of contingency plans—in today’s world of sophisticated threat actors, executives must ensure that their entire business is ready to respond. 3. Enhance your incident reporting processes A cornerstone of NIS2 and DORA is reporting ICT and cyber incidents. Businesses need to review their existing reporting channels and procedures, implementing processes to monitor, log, classify and report on incidents consistently. An effective way to ensure that reporting is standardised and complies with regulatory requirements is to centralise incident reporting across the organisation. Establishing formalised processes for managing reported incidents can support businesses in fulfilling their regulatory obligations. Furthermore, the DSA and DMA will require organisations to report to authorities regularly. National Digital Service Coordinators will be established, and they will be responsible for compliance monitoring. Reporting to new supervisory bodies will be a feature of these upcoming legislative changes—a trend likely to be seen in future regulations. 4. Analyse and understand your ICT and third-party cyber risk Today’s business world is deeply interconnected, with organisations often relying on a wide network of suppliers to conduct business. Reliance on third parties can increase the organisation’s susceptibility to cyber-attacks, increasing both the attack surface available to threat actors and the potential for attacks to affect operations significantly. Regulators have grown concerned about gaps in organisations’ third-party risk management processes in recent years as businesses become increasingly reliant on third parties. NIS2 and DORA build on existing guidance and legislation, such as NIS1 at the EU level and the Central Bank of Ireland’s Operational Resilience Guidelines and Guidance on Outsourcing at the national level. In particular, DORA will set out many provisions for businesses to report on the ICT risks stemming from their dependency on third parties, requiring them to describe this reliance in detail. Analysing your business’s exposure to cyber risk through the lens of third parties is a key means of securing your customers’ data and satisfying regulators. Neil Redmond is Director of Cybersecurity Practice at PwC Ireland

Sometimes, the hardest part of networking isn’t the meet-and-greets, but the follow-up. Jean Evans gives us her five top tips on how to maintain and nurture your network. Many people confidently attend networking events and meetings but falter on the follow-up. And as we all know, it’s all in the follow-up. That’s where the magic happens. Why you should nurture your network Building relationships take time, effort, energy and intention. Importantly, your relationships must be built and developed strategically on a foundation of authenticity. You must have done this before having an ‘ask’, like looking to someone for help, an introduction or a connection. You have to be intentional and focused about the follow-up. Know how much time and effort you can put into the process, and how best you can nurture relationships with the people in your network. Here are a few pointers to help nurture your network. 1. Keep a pad and pen handy I never leave home without a little notebook and pen. I never know when I might meet someone or come across a piece of information, a useful podcast, an article, or something I can share. The pen and paper are for writing down any useful information obtained, and the person to whom I want to pass this valuable information on to. Alternatively, there are loads of opportunities to find interesting bits and pieces others might value on social media platforms. If you come across an image, article or even an appropriate meme you think could be good, screenshot it and send it on to them. 2. One-to-ones Get to know people in your network on a more personal basis. This is imperative if you want to move the needle on the relationship. This can be done in person (best option), digitally, or by phone. However you do it, the key is taking the time to really connect with the other person. 3. Broker introductions Two people may be in the same network and not know each other yet, but you think these remarkable people should get to know each other. Share the love (and they’ll surely share it with you)!  If you hear of someone who is looking to hire, needs a job or is looking to source a supplier, and you know the perfect person, make a introduction by sending a friendly email to both, highlighting their expertise and suggesting they connect to move forward. You can also separately discuss the connection with the concerned party and assess if it’s appropriate in terms of need, fit for time, etc., before making an introduction. 4. Send a letter or message I have a stash of thank-you cards and notelets, and I also keep a roll of stamps to hand. Write a handwritten note of thanks to people who help you by nurturing their connection to you. Social media platforms are great for reminding us of birthdays, anniversaries and new jobs, so utilise this service by reaching out to those marking a special occasion. Don’t just use the pre-written text suggested by LinkedIn or other platforms. Personalise it. The recipient will remember your kindness, and you’ll develop that feel-good factor. 5. Invitations Invite people in your networks to visit other networks that you find valuable. If you’re learning, engaging, connecting and growing, why not share this opportunity with a friend, colleague or acquaintance? Jean Evans is the Founder of Network Me.

Global challenge, but reform of unchanged 1990s Leaving Cert syllabus could play significant role in alleviating it here Annual Dinner speaker Anne Heraty underscores importance of education system in safeguarding economic prosperity    20 January 2023 – An acute shortage of qualified accountants will worsen in 2023, as Irish businesses and firms struggle to access the talent they need to support the economy. This is one of the points that President of Chartered Accountants Ireland Pat O’Neill will make at the Institute’s Annual Dinner in Dublin on Friday night, in his address to over 650 members, guests, members of government and other elected representatives.Pat O’Neill will note the role of accountants in industry and practices in the economy, and the work the Institute is doing to highlight this to students and graduates to build a stronger pipeline of homegrown talent.  Commenting, O’Neill noted  “Anecdotally, the talent pipeline problem is clear right across the profession, from practices of all size to industry, resulting in attraction and retention challenges, not just in Ireland, but around the world, and we are working with global partners to tackle it. It is driven by a huge increase in competition for talent from non-accounting roles; but also a real gap in perception of what accountants actually do. “In speaking to students, many pursued accounting at third level despite, not because of, their experience at second level. Anecdotal feedback has been that many are turned off because of rote learning, the lack of breadth of what is taught and the need to unlearn and relearn concepts on transition to third level.” While the numbers opting for accounting at second level have grown in recent years, in the decade following the 2008 recession, the numbers taking accounting at third level slumped by over a quarter. The Leaving Certificate syllabus dates from the 1990s, and while major reform of the syllabus at-large has been announced, accounting as a subject has yet to be addressed.  O’Neill continued “As part of the Department’s planned programme of reform, we have seen brand new subjects such as Climate Action and Sustainable Development, in recognition of a changed world. Accounting has remained set in stone, essentially unchanged in 30 years, so it is little wonder that students don’t associate the profession with cutting edge areas like data analytics or sustainability reporting, both of which are huge growth areas for us.”  Founder and former CEO of CPL Resources, Anne Heraty who will address attendees, commented before the event “At a reasonably early stage in my career, I could see the emerging need for a specialised IT talent pool in the 1990s on this island. Ultimately it was the burgeoning tech industry, initially in Dublin, but later around the island, that advanced this change, and we now see an education system that recognises the value of skills like coding from an early age. “In an ideal world, the second level syllabus will identify and meet the needs of a modern, international, and technologically advanced economy. It will produce school leavers who understand the applicability and potential of the subjects they learn at second level, in the real world. This will be a critical element in helping Ireland Inc to win the war for talent.” ENDS     

After the hustle and bustle, exhilaration and excitement of the festive period, January and the winter season itself generally can leave us feeling a bit flat. With colder, darker days, people may notice they experience a dip in mood, feel more irritable, fatigued and less motivated. The reason for this may be Seasonal Affective Disorder (SAD) or the less-severe form, the winter blues. SAD symptoms are very similar to depression but has a seasonal pattern. The HSE estimates approximately 7% of the population experiences SAD. Here, we share some timely information and advice on how to combat the winter slump.  What causes this? Nobody really truly knows what causes the winter blues or SAD, but some experts believe SAD is caused by fewer hours of sunlight during the winter months that deplete your body’s levels of serotonin – often called the ‘feel-good’ chemical. Low light levels are thought to affect the production of melatonin, which can disrupt the body’s internal clock (or circadian rhythm).  If you’re diagnosed with SAD, your GP may recommend treatment with antidepressants called selective serotonin re-uptake inhibitors (SSRIs), alongside talking therapies, such as cognitive behavioural therapy.  But if you have milder symptoms, we have some tips you can try to protect yourself against the winter slump: See the light Sunlight is known to activate a specific hormone called serotonin. This hormone is responsible for regulating and elevating your mood, helps with sleep and wakefulness and is linked to feeling good and living longer. Try getting outside into the sunlight as early and often as possible throughout the day.  Get help from tech If access to bright sunlight isn't possible, studies have shown light treatment/therapy is another effective way of reducing the symptoms of SAD. Many people with SAD or the winter blues respond well to light therapy, which involves sitting in front of a special light therapy lamp – or light box – at home. You may also find dawn simulators useful,  they use a gradual light to wake you up in the morning, simulating a summers morning. Always remember to check any light therapy devices to make sure that it has been made by a fully certified manufacturer and is designed for treating SAD. Additionally, you could try using aromatherapy and the use of essential oils to help boost your mood. As some studies suggest that it could potentially lessen any symptoms. Get active Physical activity is widely thought to be an effective way to boost your mood, and there’s a solid body of evidence that suggests exercise may help to alleviate depression. Exercising outdoors, especially when it’s sunny, may have an even stronger effect on SAD/winter blues symptoms. You don’t have to turn into a fitness fanatic. Just being more active in your day-to-day life can have a huge benefit on the way you feel, especially during the winter. Eat mood-boosting foods Many experts believe what you eat can make a huge difference to your mood, especially during the winter, particularly foods that contain the amino acid tryptophan, which converts into serotonin in the brain. Foods rich in tryptophan include bananas, turkey, chicken, fish, cheese, eggs, milk, nuts, avocados and pulses. Some also believe omega-3 fatty acids may enhance serotonin activity, so eat oily fish such as salmon, mackerel, sardines and fresh tuna at least once a week (if you’re a vegetarian or vegan, try adding flaxseeds or chia seeds for an omega-3 boost). Stay warm Some SAD sufferers say their symptoms improve when they keep warm, so make sure your home and workplace are properly heated and wrap up well when you go outdoors.  If you’re worried about the financial cost of turning up your thermostat, get in touch to find out about CA Support's emergency financial assistance.   Keep in contact When feeling down, it’s natural to want to shut ourselves away from the world. It’s important to keep our social muscles active, as positive relationships bring both joy and perspective to our lives. Make sure you arrange regular catch-ups with your family and friends throughout winter.  How we can help The Thrive wellbeing hub provides free emotional supports to members, students and family members. We offer a confidential space for you to talk, whether you need a listening ear, wellbeing advice or professional counselling, we are here for you. You can contact the thrive wellbeing team by email at: thrive@charteredaccountants.ie or by phone: (+353) 86 0243294 Article reproduced with the kind permission of CABA, the organisation providing lifelong support to ICAEW members, ACA students and their close family around the world.

Finance Act 2022 introduced a new rent tax credit that is available for the tax years 2022 to 2025 inclusive. Revenue has created a new Tax and Duty Manual that outlines the conditions which must be met in order to claim the new rent tax credit. The manual also outlines the process for claiming the credit. PAYE taxpayers can claim the 2022 rent tax credit by filing a Form 12 via MyAccount PAYE Services, while self-assessed taxpayers can claim the rent tax credit when filing their Form 11 via ROS. In addition, PAYE taxpayers have the option of claiming their 2023 rent tax credit in 2023 by using Revenue’s Real Time Credit facility. In such instances the credit will be apportioned equally over the tax year.