IDA Chair Feargal O’Rourke, FCA, talks to Accountancy Ireland about the inward investment agency’s plans and priorities at a “critical juncture” in Ireland’s FDI journey Feargal O’Rourke, FCA, assumed the role of Chair of IDA Ireland in January 2024 at a significant time for the inward investment agency, which celebrates its 75th anniversary this year – and, he says, a “critical juncture” in Ireland’s foreign direct investment (FDI) journey. O’Rourke joined the board of IDA Ireland after stepping down as Managing Partner of PwC Ireland in October 2023 following a storied 37-year career with the firm. In his new role, working alongside IDA Ireland Chief Executive Michael Lohan, time is, he says, “of the essence.” “The one thing I am always paranoid about is complacency, and I think you really do need to have a paranoia about that,” O’Rourke tells Accountancy Ireland.  “Right now, I think Ireland has ‘amber lights’ on infrastructure and we need to put the foot down. We need to invest in more housing. We need to invest in the grid. We need to invest in offshore energy.  “My biggest concern is speed. There are plans in place, but I constantly ask myself, ‘Are we moving fast enough? Can we move faster?’ “I think there is a broad consensus emerging that infrastructure is moving up our list of priorities.  “I take the view that capital spend on infrastructure is an investment. It is not an outflow of money. Deferring a project is a cost. It is not a saving because we will have to do it at some point, and it may cost more then.” New five-year strategy The single biggest task for IDA Ireland as an organisation currently is finalising a new five-year strategy, which will run from 2025 to 2029, O’Rourke says.  “We are doing this against the backdrop of significant geopolitical uncertainty. There is a more muted pace of growth in the global economy and more active industrial policy from some competitor nations,” he says. “There is also the challenge of climate change and the opportunity of the green transition, companies globally grappling with the next step on their diverse digitalisation journeys and, of course, the revolution that is taking place in artificial intelligence.” Ireland’s ability to continue competing in this fast-changing world will be dependent on having the right set of enabling conditions in place”, O’Rourke says.  “As we face challenges in terms of our national competitiveness relating to energy costs and renewable energy provision, housing, infrastructure and utilities, countries around the world are vying to win the race for the next generation of FDI growth. “The opportunity cost of not addressing these issues in a timely manner – particularly sustainable energy supply – risks being sizeable,” he warns. Storied career in practice A native of Athlone, O’Rourke studied commerce and accounting at University College Dublin and qualified as a Chartered Accountant with PwC in 1989. He is also an Associate of the Irish Tax Institute and current Chair of the Institute of International and European Affairs, the Irish-based international think tank. “My father left school at 16, so he always placed a big emphasis on education and business,” O’Rourke says. “He thought I should qualify as a Chartered Accountant and the ‘Chartered’ bit was very important to him, because he felt it had a cachet. That was back in the eighties, and I think the qualification still holds a distinction today. “I remember sitting my final accounting exams thinking, ‘I wonder what this bit of paper will do for my life?’ “There is no doubt that having the Chartered Accountant qualification contributed so much to me living out my professional dreams in the years that followed. The status it brought with it is hugely important and I think the standing of the qualification is as strong today as it was when I qualified.” O’Rourke joined PwC in Dublin in 1986 and remained with the firm for 37 years, holding the position of Managing Partner for the last eight. “I joined what was then Price Waterhouse on 8 October 1986, with the intention of qualifying as a Chartered Accountant and then returning home to Athlone,” he recalls. “Thirty-seven years later – to the day – I retired from PwC having had a wonderfully fulfilling career that was beyond any expectations I had when I joined.” His experience with the firm instilled in O’Rourke the importance of strategic planning for long term success – and it is a lesson he has brought with him to IDA Ireland. “You can’t just think about an organisation as it exists today, and the current generation. You must ask yourself, ‘when I’m 20 and 30 years gone, will I have seeded the fields to ensure it continues to succeed long into the future?’” With Central Statistics Office figures released earlier this year predicting Ireland’s population could grow to over seven million by 2057, O’Rourke’s vision for IDA Ireland is equally long term. “In my role with IDA Ireland today, I am thinking ahead to 25 or 30 years from now and asking, ‘what will Ireland look like then?’ “We have got to play our part in advising the system today if we want to have the right industrial base in the years ahead, not just to continue to attract FDI but also to support indigenous businesses and wider society at a time of ongoing population growth. “I feel a responsibility, as do many others in the system, to say, ‘okay, how does this organisation contribute to ensuring that we will have a successful society in which there are plenty of jobs for people? Do we have the infrastructure we need – both societal and industrial – whether that be in terms of housing, energy supply, water or transport?’  “These are as much societal issues as they are business issues and IDA Ireland will play its part. Building capacity is crucial. Ireland is facing infrastructural capacity issues, and they are a priority for IDA Ireland, particularly over the next five to six years.” FDI and global tax developments Having been appointed as a Tax Partner in 1996 and Head of PwC’s Tax Practice in 2011, O’Rourke spent a significant portion of his career working in Foreign Direct Investment (FDI).  “I worked extensively – but not exclusively – with household names from the West Coast of the US. I was privileged to work with many of the companies that now rank among the largest FDI employers in the country,” he says. “I still have the memo in which my then Partner Tadhg O’Donoghue said, ‘I’m going to ask you to focus on a particular area of tax – FDI.’ That one line in a memo almost 40 years ago completely determined my career and my life thereafter.” O’Rourke saw the evolution of Ireland’s FDI landscape firsthand over that span of time. “Tax became central to Ireland’s FDI proposition, delivering a major competitive advantage for us back in the eighties and nineties. It has really played a central role in how Ireland has positioned itself to attract FDI,” he says. As Head of PwC’s Tax Practice, O’Rourke also collaborated extensively with companies, officials, governmental bodies and the Organisation for Economic Cooperation and Development on the Base erosion and profit shifting (BEPS) initiative introduced in 2013 to curb tax avoidance among multinationals operating across different jurisdictions. “Successive Irish Governments over the past 15 years have really got it right on our FDI-related tax policy and we are now seeing the benefits of this in terms of our corporate tax take,” he says.  “That contribution to the State coffers is being used to build hospitals and schools, but other countries in the post-BEPS era are moving fast on their own FDI-friendly tax strategies, and I think we need to move quickly as well and make sure we continue to be agile and responsive, looking around the world and asking, ‘what lessons can we learn here from what others are doing?’” “A world-class organisation” Just over 10 months into his role with IDA Ireland, O’Rourke’s pride in the organisation is palpable. “In sporting terms, IDA Ireland is like Limerick in hurling or Manchester City in football,” O’Rourke says. “We have a fantastic record of success, but once the season is over, we must do it all again. We can survive a year where we are not top of the pile, but we can’t afford to enter a period where we are living off past glories. “You wouldn’t say to the Limerick hurling team, ‘you need to ease off the training for a few years and let everyone else catch up,’ nor would you say to Manchester City, ‘you shouldn’t buy any good players for now.’ “I don’t think IDA Ireland as an organisation should ever say, ‘we are doing really well, we could pull back a bit’. Life doesn’t work like that. Michael Lohan, our Chief Executive, often says, ‘when you turn off the tap, there is no guarantee that, when you turn it back on again, water will come out.’” As it stands, O’Rourke sees IDA Ireland as a “world-class organisation.” “This is not just my own view,” he says. “Over the course of my 37 years in professional services, I was repeatedly told this by clients who had experience of being ‘courted’ by a variety of inward investment agencies from around the world. “Today, our IDA Ireland clients tell me time and again, ‘we feel welcome in Ireland; we feel supported’.” These IDA Ireland client companies employ 300,583 people directly, accounting for 11 percent of total employment in Ireland currently. They spend a combined €35.8 billion annually on payroll and Irish-sourced goods and services, and €15.5 billion in capital expenditure. In total, 248 investments were approved by IDA Ireland in 2023 and a further 131 in the first six months of this year, with the potential to create some 27,000 jobs. “While I expect the pipeline of projects to continue to be strong as we move through 2024, the challenges we face to stay at the forefront of attractive locations to invest in are significant,” O’Rourke says. “If we stand back, there is no doubt that FDI flows have slowed a bit compared to, say, four or five years ago.  “This is, in part, because we have probably already seen the high watermark in globalisation. In retrospect, I think that occurred somewhere towards the end of the last decade.  “The good news for Ireland is that we are continuing to win FDI projects of substance and the 300,000 FDI direct employment figure is a new plateau for us.  “For many years, the benchmark for direct employment was 200,000. Now, our focus is on keeping that figure above 300,000 as we look to build on the next FDI cycle.” Emerging opportunities As IDA Ireland looks to future FDI growth, its focus will be centred on emerging opportunities in the ongoing green and digital transitions reshaping the global economy, O’Rourke says. “We recognise the need to help the Irish operations of global firms transform to thrive in a world that is changing fast.  “We actively partner with client companies on investments in talent development, digitalisation, research and development, innovation and sustainability, including decarbonisation,” he says. “When I was Managing Partner at PwC and we were at our most profitable and successful, we decided we needed to invest heavily in digitisation.  “It wasn’t just an investment in technology, it was an investment in our culture. Even though there were no clouds on the horizon, we could see that, if we stayed still, we might have another few great years – but, really, we needed to invest in the technology to continue growing beyond that. “Our focus now at IDA Ireland is on helping our clients to invest in the areas they need to focus on to do the same – to prepare to continue succeeding in the future. This means supporting them on investment in digitalisation and sustainability.” Collectively, IDA Ireland client companies spend over €7 billion on in-house research, development and innovation (RD&I) annually.  IDA Ireland approved 25 sustainability projects last year, focused on carbon abatement and building Ireland’s green economy.  New RD&I projects won by the semi-state agency in 2023 came with associated client spend commitments of €1.4 billion.  “With the requisite enabling conditions in place at a national level, aligned to emerging FDI attractiveness factors – such as AI skills and renewable, reliable and affordable energy – I think we will be well-placed to capture new investment opportunities,” O’Rourke says. A particular focus is Ireland’s future capacity to generate renewable energy – specifically, offshore energy. “We have been very vocal about the importance and potential of offshore energy. If Ireland gets its offshore energy strategy right – both fixed and floating – we could be in a surplus energy position in 10 years’ time,” he says. “That could transform our capacity to attract energy-intensive multinationals from various industries, because we would potentially be in a situation where have no constraints in relation to our ability to supply green energy.” O’Rourke is, he says, a born optimist. “When it comes to our strategy at IDA Ireland over the next five years, I do genuinely and fully believe that our best years are ahead of us.”

Having ascended to the role of Finance Minister just four months ago, this year’s budget was Minister Jack Chambers’ first at the helm of the finance portfolio but the last we will see from the current Government.  With a general election now firmly on the horizon, Budget 2025 was unsurprisingly brimming with generous giveaways for individual taxpayers, including a €1 billion bouquet of personal tax reductions alongside a €2.2 billion hamper of cost-of-living measures.  The giveaways were spread so universally that most individual taxpayers, even those arguably not in need of them, got some degree of ‘bounce’ from the Government but, in a budget so warmly generous, some constituencies were left out in the cold.  Sweetening the electorate Among the suite of income tax measures announced in Budget 2025 were a €2,000 increase to the standard rate cut-off point, a one percent reduction to the four percent rate of Universal Social Charge and a €125 boost to each of the main personal tax credits.  Taking into account the additional cost-of-living payments also announced (including €250 in new electricity credits, and a double payment of child benefit in November and December) the average worker will be about €1,000 better off over the next 12 months.  Add to this an increase to the inheritance tax thresholds across all groupings and one would be forgiven for thinking this was a Celtic Tiger budget of the early to mid-2000s.  Reacting to the package, the Fiscal Advisory Council pointed out how “only about half of the Government’s €2.2 billion cost-of-living measures were targeted,” and emphasised how “the same supports could have been provided to those most in need at a much lower cost”.  Indeed, in an economy at near full employment with inflation at its lowest since 2021, it’s hard to see how such excessive giveaways, bolstering individual spending power, don’t ultimately risk overheating an already red-hot economy. The opportunity cost  But Budget 2025’s preoccupation with wooing individual voters in the run-up to an imminent election came at a cost to other constituencies, particularly small businesses.  Despite months of assurances from Ministers that concrete steps would be taken in the Budget to address the burgeoning costs of doing business, many SMEs may rightly feel left out of the Government’s wave of generosity.  Some measures will be welcomed, such as a one-off Energy Subsidy Scheme worth about €4,000 to businesses in the hospitality and retail sectors, as well an increase to the VAT registration thresholds for the supply of goods and services. However, no real steps were taken to address the elephant in the room – namely, ballooning labour costs.  Ask any small business across the country (and we have – in our Survey of Small Businesses conducted this summer) and they will tell you that labour costs are the single biggest operating cost they face today.  And labour costs are now on the rise again – with a six percent increase to the minimum wage announced as part of the Budget package and an additional 1.5 percent uptick in staff pension costs coming down the track as part of pensions auto-enrolment, due to be launched next September.  Budget 2025 offered a real opportunity for Government to take meaningful steps to ease these cost burdens and take the pressure off small businesses’ narrowing bottom lines.  One option might have been to lower the rate of Employers’ PRSI by 1.5 percent to mitigate the concurrent cost of pensions auto-enrolment to employers, particularly those who employ workers in and around the minimum wage.  We estimate that doing so would have cost in the region of €63 million per annum based on 164,000 people working full-time at the minimum wage.  Such a step would have made a huge difference to small businesses across the country and comes with a more modest price tag than some of the more gratuitous cost-of-living measures included in the final budget package.  But alas, because it is individuals and not businesses who get to vote on election day, perhaps such measures failed to meet the objective of political expediency.  Stephen Lowry is Head of Public Policy at Chartered Accountants Ireland

The OECD has published a working paper on the implications for OECD tax systems of tax arbitrage through closely held businesses. The paper finds that tax incentives to incorporate and earn capital income through corporations have increased in the last two decades. It shows that there has been an increase in incorporated businesses in many OECD countries, which has been partly driven by tax factors. The paper also finds that, in many countries, a combination of tax system features, related to corporate, dividend, capital gains, gift and inheritance taxation, provide particularly strong incentives to retain earnings inside corporations.

The Institute’s Advocacy and Voice Department is hiring a new Tax Manager. The Department is responsible for the tax and public policy agenda of Chartered Accountants Ireland. We collaborate with expert colleagues drawn from practice and industry, developing, and advocating on policy matters relating to tax, financial reporting, audit and assurance, ethics and governance, and business law. The department numbers over twenty professionals. The successful candidate will report into the Institute's Tax Leader (Head of Tax). You can find more information at the above link. If you are interested in applying, send your CV and a cover letter to hr@charteredaccountants.ie.

Revenue has updated the Tax and Duty Manual which provides information in relation to DAC2 Common Reporting Standard (CRS) reporting in Ireland. The guidance has been updated to provide further clarification on the additional guidance on ResCountry Code (section 7.5). 

The Charities VAT Compensation Scheme aims to reduce the VAT burden on charities and to partially compensate for VAT paid by the charity. Under the scheme, Revenue is to refund €10 million to charities. Revenue will notify eligible charities via their ROS inbox of the refund amount being sent to their designated account. 

Revenue has published the Special Assignee Relief Programme (SARP) statistics for 2022. These provisional statistics are based on analysis of SARP employer returns filed in respect of the 2022 tax year.  From 2012 to 2022, the number of employees claiming SARP has grown from 6 to 428, with the number of employees retained, as reported by employers as a result of the operation of SARP, growing from 6 to 1,569.  SARP provides for relief from Income Tax on 30 percent of income over €75,000 (€100,000 for an employee who arrived on or after 1 January 2023), subject to an upper income threshold, where applicable. There is no exemption from USC. PRSI is payable where the individual is not liable to social insurance contributions in their home country. School fees of up to €5,000 per annum and expenses incurred on one trip home per year, where they are paid for by the employer, are not subject to Income Tax, USC or PRSI.   The aim of the relief is to reduce the cost to employers of assigning skilled individuals in their companies from abroad to take up positions in the Irish-based operations of their employer or an associated company, thereby facilitating the creation of jobs and the development and expansion of businesses in Ireland.    In 2022, 592 employers submitted SARP Employer Returns in respect of 2,663 individuals. The estimated total cost of SARP in 2022 was €48 million, of which €0.3m and €0.5m were in relation to travel and school fees respectively. 36 percent of claimants received relief through payroll. Payroll was operated on a tax equalisation basis for 17 percent of claimants.   

Tax revenues for the third quarter of 2024 were €23.4 billion, according to the recent September Exchequer figures. The figure represents a €3 billion increase (or 14.4 percent) on the same period last year. Aggregate tax receipts in the year-to-date are €68.2 billion, ahead of last year by €6.8 billion (or 11 percent), with the over-performance largely due to corporation tax receipts. An Exchequer surplus of €5 billion was recorded to end-September.  The breakdown of tax revenues is as follows:   Income tax receipts were €24.8 billion to end-September, €1.6 billion, or 7.1 percent higher than the same period last year. VAT receipts to end-September were steady at €17.9 billion, €1.2 billion (7 percent) higher than the same period last year. Although corporation tax receipts of €1.5 billion for September were down €0.2 billion (or 13.3 percent) on the same month last year, cumulatively receipts of €17.8 billion to end-September were €3.4 billion (23.3 percent) ahead of the same period last year.  Total gross voted expenditure to end-September amounted to €72.1 billion, €7.7 billion (12 per cent) above the same period in 2023 and €2.9 billion or 4.2 per cent above profile.  Commenting on the figures, the Minister for Finance, Jack Chambers TD said:   “The tax figures published today largely continue a pattern of robust growth that we have seen throughout the year, and provide further evidence of the fundamental strength of our economy.  Of course, the stand-out feature in the tax performance has been corporation tax. Even as receipts in the year to date remain well ahead of initial expectations, the decline this month reminds us of the volatility associated with this revenue stream, and why this Government has acted to mitigate our exposure to these receipts through the establishment of the Future Ireland Fund and the Infrastructure, Climate and Nature Fund.  Budget 2025, which Minister Donohoe and I presented to the Oireachtas on Tuesday, sets out a balanced and sustainable pathway for our public finances with allows us to continue to invest in our public services and infrastructure without relying on ‘windfall’ tax revenues.” 

The Minister for Social Protection, Heather Humphreys TD, has announced that the pensions auto-enrolment scheme will begin on 30 September 2025. The Institute supports the introduction of auto-enrolment but remains concerned with its impact on small businesses.  In last week’s Budget, it was announced that Finance Bill 2024 will provide for the taxation of the Automatic Enrolment Retirement Savings Scheme (referred to as AE). According to the Budget publications, the tax treatment “aligns as much as possible with that of Personal Retirement Savings Accounts (PRSAs), other than for employee contributions.” Employer contributions will be tax relieved, the growth in the AE funds will be exempt from tax and the AE funds will be taxed on draw down, other than the 25 percent tax free lump sum. The lump sum will be able to be taken tax free up to €200,000, will be taxed at 20 percent between €200,000 and €500,000 and taxed at 40 percent above €500,000. As the State will be making a direct contribution for employees within the AE scheme, no tax relief will be provided for employee contributions to AE.    

The Parliamentary Budget Office (PBO) has published its Preliminary Review of Budget 2025. This publication provides a summary review of Budget 2025, including a distributional analysis of budgetary measures, summaries of key spending and tax measures, key economic considerations and other issues.  A Pre-Budget 2025 Ready Reckoner is also available which illustrates the estimated annual cost of various tax and welfare options. In addition, the PBO has produced a new summary interactive data visualisation on spending issues which can be found here (please note this link leads to an external website, not the PBO webpage). This will allow you to explore the projected gross voted expenditure for 2025.  And finally, the Parliamentary Budget Office has also published an information note on inheritance tax which provides an overview of Inheritance Tax in Ireland, in light of the current discussion and commentary on the matter.   

Revenue has published its Budget 2025 summary, detailing key measures in this year’s budget, together with its Pre-Budget 2025 Ready Reckoner which illustrates the estimated annual cost of various tax and welfare options.

After Budget 2025 took place last week, the team at Chartered Accountants Ireland have been busy analysing the key measures and providing analysis and commentary in the media: Our full summary of all the key measures announced as part of the Budget package is available on the Institute's dedicated Budget 2025 landing page, Read our press release reacting to the Budget announcement, The Institute’s Director of Advocacy and Voice, Cróna Clohisey, appeared on a number of radio stations covering the Budget including RTÉ Radio 1’s News at One, the Nine till Noon Show on Highland Radio (from 14:55 into show podcast) and C103’s Cork Today show with Patricia Messenger (from 52:50 into show podcast), and Listen to our additional Budget coverage in the special Budget 2025 episode of the Accountancy Ireland podcast. Further commentary and analysis will also feature in this month’s edition of Accountancy Ireland.

The OECD/G20 Inclusive Framework on BEPS (Inclusive Framework) has published a Model Competent Authority Agreement to facilitate the implementation of its political commitment on Amount B of Pillar One. This practical tool is designed to be particularly beneficial for jurisdictions with limited resources and data availability.

On 2 October, the EU and Norway signed an agreement to amend their existing cooperation agreement on aspects of administrative cooperation, the fight against fraud and assistance on recovery of claims in the field of VAT. The new agreement will provide the partners with new cooperation tools.

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The most recent Trader Support Service bulletin is also available as is the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs Team. The annual joint meeting of the UK and EU’s Domestic Advisory Group (DAG) took place recently after which a joint statement was issued. Chartered Accountants Ireland is a member of the UK DAG. And finally, a joint statement was issued last week after the President of the European Commission and the UK Prime Minister met. Joint UK/EU statement on enhancing strategic cooperation The President of the European Commission and the Prime Minister of the United Kingdom met last week and agreed to strengthen the relationship between the United Kingdom and the European Union. They agreed on the shared challenges facing the European Union and the United Kingdom including the altered strategic context for the wider continent notably resulting from Russia’s illegal invasion of Ukraine. Prime Minister Keir Starmer and President of the European Commission Ursula von der Leyen released a joint statement after the meeting during which it was agreed agreed the UK and European Union would also continue to work closely to address wider global challenges including economic headwinds, geopolitical competition, irregular migration, climate change and energy prices, all of which pose fundamental challenges to the shared values of the United Kingdom and the European Union and provide the strategic driver for stronger cooperation. They also reaffirmed that the Withdrawal Agreement, including the Windsor Framework, and the Trade and Cooperation Agreement underpin relations between them and underlined their mutual commitment to the full and faithful implementation of those agreements. Both parties also agreed on the importance of holding regular EU-UK Summits at leader level to oversee the development of this enhanced relationship with the first summit to take place in early 2025 ideally. Miscellaneous guidance updates and publications Trade Specialised Committee on Administrative Co-operation in VAT and Recovery of Taxes and Duties, Report a problem using the Customs Declaration Service, Designated export place (DEP) codes for Data Element 5/23 of the Customs Declaration Service, Check if a business holds Authorised Economic Operator status, Attending an inland border facility, Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS), Trading and moving goods in and out of Northern Ireland, Moving Rest of World sheepmeat, poultry and beef to Northern Ireland, and Method of payment (MOP) codes for Data Element 4/8 of the Customs Declaration Service.

In this week’s miscellaneous updates, we bring you the news that the Chief Executive of HMRC has announced that he is retiring next year. The latest Administrative Burdens Advisory Board report has been published the headlines from which are that many agents/businesses do not believe that there will be any benefits from Making Tax Digital for income tax (MTD ITSA). Frustration with HMRC’s poor service levels also continues to grow. Regulations have been published on the information requirements for the new research and development (R&D) tax relief regimes and HMRC has published guidance/forms for certain overseas companies to register for corporation tax. The latest schedule of HMRC live and recorded webinars for tax agents is also available for booking. Spaces are limited, so take a look now and save your place. And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected. HMRC Chief Executive to retire Sir Jim Harra, Chief Executive of HMRC, is to retire in April 2025. Mr Harra, who is originally from Northern Ireland, announced his retirement last week in a LinkedIn post saying ‘I am due to complete my tenure as first permanent secretary/chief executive in the spring, when I will be retiring from HMRC and the Civil Service. ‘The recruitment exercise to find my successor is now under way. If you have the right skills and experience, please consider applying – it’s a fascinating and rewarding role with national impact, for candidates of the right calibre.’ Mr Harra has been Chief Executive and first Permanent Secretary of HMRC since 2019. 2023/24 Administrative Burdens Advisory Board report The Administrative Burdens Advisory Board (ABAB) recently conducted its annual survey in its role to survey the needs of small businesses in the context of the UK tax system. The ABAB was established in 2006 to provide valuable business insight and expertise to HMRC, acting as a ‘critical friend’ on issues relating to regulation and administration of tax for small businesses. The ABAB also challenges HMRC on performance, providing robust, independent scrutiny against key initiatives that affect small businesses. This year a record number of over 10,000 responses were received to the survey, comprising 84 percent from businesses and 16 percent from agents.  The outcome of the survey has been published in the Tell ABAB report for 2023 to 2024 the key findings are as follows: Just over 33 percent of respondents described themselves as being aware or very aware of MTD ITSA, suggesting that awareness appears to be low, though it should be noted that of the businesses who responded to the survey, this may include companies and partnerships who will not be directly impacted by MTD ITSA, 64.6 percent of respondents said that MTD ITSA would have no benefits with 63.1 percent saying that the digital record keeping requirement will increase costs, and The survey responses suggest an ongoing and growing sense of frustration when engaging with HMRC with 56.7 percent of respondents rating HMRC’s webchat and telephony services as poor, up from 39.8 percent in 2022/23. When asked about their experience of dealing with HMRC in the last 12 months, 42.2 percent of respondents said it was worse, compared with 33.6 percent in 2022/23. The outcome of the survey has been shared with the Exchequer Secretary to the Treasury (XST) and it is expected that in December 2024, the ABAB will submit its annual report to the XST which will review HMRC’s progress and performance against the priorities set in the ABAB’s 2022/23 report.    Regulations published on merged R&D expenditure credit information requirements For accounting periods commencing on or after 1 April 2024, the UK’s R&D tax relief regime was majorly reformed when the merged R&D expenditure credit (RDEC) and the enhanced R&D intensive support (ERIS) regimes were introduced. As a result, the information requirements for the merged RDEC and the ERIS regimes have changed hence The Research and Development Relief (Information Requirements etc.) Regulations 2024 have now been published to implement these changes. Broadly, the information requirements under the legislation, which set out the content of the Additional Information Form, are consistent with the requirements prior to 1 April 2024. However, the regulations now provide a statutory footing for claimants to disclose expenditure claimed in relation to the qualifying element of contracted out R&D expenditure. In addition, if expenditure is incurred in relation to Externally Provided Workers and contracted out R&D, the regulations now include a requirement to disclose further information if the relevant activity was undertaken outside of the United Kingdom. This is by virtue of the general exclusion of overseas R&D activity which is subject to certain exceptions. Additional disclosure requirements also arise in relation to companies with a registered office in Northern Ireland. The new requirements took effect from 2 October 2024. HMRC guidance/forms for overseas companies to register for corporation tax Last month, the HMRC guidance page ‘Corporation Tax for non-UK incorporated companies’ was updated in respect of the corporation tax registration process for overseas companies that are not able to use the joint registration process via Companies House. As set out in the guidance, although various categories of non-UK tax resident company can be within the scope of UK corporation tax, these do not always come within the rules that require such companies to register with Companies House. The updated guidance page therefore clarifies the process required for such companies and provides links to further new guidance and online forms.

HMRC has published further draft guidance on the multinational top-up tax and domestic top-up tax. This release includes all previously released pages (including updates in some cases) in addition to newly drafted pages. For further information, including an overview of which pages are new or significantly revised, see the introduction in the document. HMRC invites comments from stakeholders on this draft guidance. Please email responses to the inbox: pillar2.consultation@hmrc.gov.uk. Include the page reference number in responses where applicable. Publication of the manual will begin following the review of consultation responses. A supplementary release of draft guidance will follow in due course. This will include remaining draft guidance on flow-through entities, joint ventures, the insurance sector, additional top-up amounts, and the undertaxed profits rule. A final release of draft guidance is expected by December, which will include an updated map of the OECD documents as they relate to UK legislation. HMRC will begin to publish finalised pages as an HMRC manual prior to that.  

Based on feedback from various agent representative bodies, including the Professional Bodies, HMRC is making changes to the services it provides for agents with Self-Assessment (SA) and PAYE queries via the Agent Dedicate Line (ADL) and the introduction of a new webchat service. These changes, which take effect from today Monday 7‌‌‌ ‌‌October 2024, aim to provide better support to agents. More detailed information is available in an email from HMRC but broadly, the changes mean that agents will be able to call the ADL for queries relating to both SA and PAYE as HMRC recognise the need for a combined resource.  In addition, a new webchat service solely for agents, covering both SA and PAYE (but not PAYE repayment claims) is now available on GOV.UK. Agents can discuss up to a maximum of 5 taxpayers on an ADL call or webchat and when calling the ADL are now presented with a new telephony option for progress-chasing SA repayments (the route for PAYE repayments is unchanged). More information is available at the following links: Agent Dedicated Line: Self-Assessment or PAYE for individuals, and Dedicated helplines and contacts for tax agents. Chartered Accountants Ireland will be monitoring the impact of these changes as it has long been recommending to government that enhanced services for agents need to be provided.

Welcome to the latest edition of Technical Roundup which is published on the first and third Friday of every month. In developments since the last edition, the Minister for Finance has signed a statutory instrument commencing further provisions of the Credit Union (Amendment) Act 2023 (2023 Act) on 30 September 2024.  The Financial Reporting Council has released the 22nd edition of its Key Facts and Trends report, offering a comprehensive overview of the UK accountancy and audit landscape.  Just as this newsletter has been published, we have received confirmation that the Minister for Enterprise, Trade and Employment has signed into law S.I. No 498 of 2024 The European Union (Corporate Sustainability Reporting)(No. 2) Regulations 2024. Read more on these and other developments that may be of interest to members below. Financial Reporting The International Accounting Standards Board (IASB) has issued its September 2024 update and podcast. The IASB has issued a Debrief of their 2024 World Standard-setters Conference, which was held in London on 23-24 September. More than 130 delegates from 70 countries were represented at this event. The European Financial Reporting Advisory Group (EFRAG) has published an Exposure Draft Due Process Procedures for the EFRAG Financial Reporting Activities. This aims to formalise the existing due process applied for its financial reporting activities. EFRAG is calling for technical experts in accounting and financial reporting to join its Financial Reporting Technical Expert Group (EFRAG FR TEG). EFRAG has issued a draft comment letter on the IASB’s Exposure Draft on Climate Related and Other Uncertainties in the Financial Statements. Comments are welcomed by 15 November 2024. EFRAG has also issued a draft comment letter on the IASB’s Exposure Draft Amendments to IFRS 19 Subsidiaries without Public Accountability. Comments are welcomed by 13 November 2024. The UK Endorsement Board has also issued draft comment letters to the above mentioned exposure drafts, with comments welcomed by 11th November for both. The IASB have released a webcast on its Climate-related and Other Uncertainties in the Financial Statements Exposure Draft. The webcast covers the project's background, key research findings and an overview of the illustrative examples that the IASB developed in response to strong demand from stakeholders, particularly investors. The UK Endorsement Board has published a Draft Endorsement Criteria Assessment on the potential use in the UK of the IASB’s Amendments to the Classification and Measurement of Financial Instruments. Comments are welcomed by 10 January 2025. The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting setting out the findings of its monitoring of UK companies’ annual report and accounts alongside its expectations for the upcoming reporting season. The FRC has released the 22nd edition of its Key Facts and Trends report, offering a comprehensive overview of the UK accountancy and audit landscape. The FRC are running an online survey to obtain preparers’ views on FRS 101 Reduced Disclosure Framework. The aim of this research is to gather feedback from groups of companies that include entities eligible to apply FRS 101 in preparing their financial statements (whether or not they choose to do so). The survey should take approximately 15 minutes to complete and will provide a valuable contribution to the ongoing development of the standard. The survey will remain open until 31 October. The European Securities & Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has published its 2025 Annual Work Programme (AWP). Accountancy Europe has published its September 2024 Newsletter The September 2024 IFRS for SMEs Accounting Standard Update has been published which discusses news, events and other information about the standard. The IASB has announced that it has concluded its Post-implementation review of IFRS 15 Revenue from Contracts with Customers, finding that the Standard is working as intended and providing investors with useful information. The IASB noted that it has identified a few application issues to consider in its next agenda consultation, which it plans to start in late 2025. The Financial Reporting Council has published version 2.0 of Technical Actuarial Standard 200 (TAS 200). Assurance and Auditing ISAE (Ireland) 3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information – Assurance of Sustainability Reporting in Ireland. IAASA has adopted ISAE (Ireland) 3000 be applied by auditors performing sustainability assurance engagements required by the European Corporate Sustainability Reporting Directive (CSRD). ISAE (Ireland) 3000 applies to assurance reports issued on or after 15 December 2024. Limited amendments have been made to the international standard to ensure that it applies to sustainability assurance in engagements in Ireland and that sustainability assurance providers are subject to appropriate ethical and quality management requirements. This new standard requires auditors to comply with ISQM (Ireland) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements therefore IAASA has updated ISQM (Ireland) 1 to reflect the requirements of the CSRD as transposed in Ireland. Additional minor amendments were made to ISQM (Ireland) 1 to make conforming amendments for ISA (Ireland) 600, which was revised in February 2023 and is effective for financial periods starting on or after 15 December 2023. IAASA has updated the auditing standards to reflect the conforming amendments required due to the revision of ISA (Ireland) 600, Audits of Group Financial Statements (Including the Work of Component Auditors) in February 2023. The revised standard is effective for financial periods beginning on or after 15 December 2023. The International Auditing and Assurance Standards Board (IAASB) has announced the adoption of a new Technology Position. This will guide how the IAASB adapts its work to embrace the intersection of audit, assurance, and technology. The Position is structured around three key components: Technology Position Statement - IAASB’s commitment to facilitate and encourage the use of technology by practitioners and firms, ensuring the standards remain relevant and effective. Operationalizing the Technology Position - IAASB’s strategy for implementing the Statement by identifying opportunities for new or revised standards, along with developing non-authoritative materials and guidance. Monitoring and Adapting to Technological Trends - IAASB will continually monitor technological trends to ensure its standards are adapted and remain aligned with the rapidly changing landscape. The International Auditing and Assurance Standards Board (IAASB) has released a comprehensive adoption guide designed to help jurisdictions adopt the ISA for LCE, an alternative to the full suite of International Standards on Auditing. The guide provides valuable insights into the adoption process, highlighting common steps and successful approaches, while also addressing potential challenges. The guide also outlines steps for legislative, regulatory, or relevant local bodies with standard-setting authority to allow practitioners to use the ISA for LCE.  ISA for LCE is not currently adopted in Ireland and the UK. Sustainability The Minister for Enterprise, Trade and Employment has signed into law S.I. No 498 of 2024 The European Union (Corporate Sustainability Reporting)(No. 2) Regulations 2024. Following the signing into law of S.I No 336 European Union (Corporate Sustainability Reporting) Regulations 2024 in July 2024, many organisations, including the Institute, have engaged with the Department of Enterprise, Trade and Employment regarding the wording of the legislation, which many felt contained significant application challenges. While this legislation is not available at the time of publication of this newsletter, we hope that the new legislation will address these challenges which will hopefully provide clarity for companies as they begin their journey of reporting under the Corporate Sustainability Reporting Directive. We will keep members up to date when the legislation is published. Accountancy Europe has issued its September 2024 Sustainability Update. The update includes details of Accountancy Europe’s new factsheet on the Corporate Sustainability Due Diligence Directive (CSDDD). Sue Lloyd, Vice-Chair of the International Sustainability Standards Board, spoke at the World Standard-setters Conference in London on 23 September 2024.  The International Sustainability Standards Board (ISSB) has issued its September 2024 Update and podcast, summarising their September 2024 meeting. The IFRS Foundation has published a guide entitled Voluntarily applying ISSB Standards — A guide for preparers. The guide aims to support companies as they start to apply ISSB Standards voluntarily as well as helping them communicate their progress to investors. The Global Reporting Initiative (GRI), along with the World Benchmarking Alliance, has published How to strengthen corporate accountability: The case for unlocking sustainable corporate performance through mandatory corporate reporting. The publication explores the link between the use of the GRI Standards and companies' social performance, as measured by WBA's Core Social Indicators. Other The Minister for Finance has signed a statutory instrument commencing further provisions of the Credit Union (Amendment) Act 2023 (2023 Act) on 30 September 2024. The provisions have now been fully commenced whereby a credit union can agree to participate in a loan to a member of another credit union, referral of members of one credit union to another credit union (where the rules permit) and the obligations which heretofore were annual, to approve, review, and update plans policies and procedures are now to be carried out every three years. Also, environmental social and governance policy is now included as a policy for the board to approve, review and update at least every 3 years. Some provisions remain to be enacted such as the provisions regarding corporate credit unions introduced in the 2023 Act. Readers are reminded that there is a resource page on credit unions on the Institute’s Technical Hub where you will find further information on these new provisions and other useful information on credit unions including auditing and Central Bank information. Accountancy Europe has published its September 2024 SME Update. The Decision Support Service (DSS) is seeking suitable candidates to join the decision support service panel of decision-making representatives. The DSS proposes to expand the Panel due to increasing requests from the Circuit Court and the Wardship Court for nominations. The closing date for applications is 14 October at 12pm and more information is available here - https://www.dsspanelrecruitment.com/. Euronext Dublin has published the Irish Corporate Governance Code. An important step in the development of corporate governance in Ireland, the new Code applies to financial years commencing on or after 1 January 2025 for Irish incorporated companies with an equity listing on Euronext Dublin (Irish Stock Exchange). Companies dual-listed in Ireland and the UK have the option to follow the Irish Code or the UK Corporate Governance Code. The Irish Pensions Authority has published a consultation on a draft revised code of conduct for personal retirement savings account providers. The revised code raises the standard of conduct required of PRSA providers when facilitating unregulated investments. The revised code also aims to better inform PRSA contributors about the risks of unregulated investments. The closing date for submissions to the consultation process is 1 November 2024.  In other pensions news the Irish Pensions Authority has issued its annual report and accounts 2023. Click also to read the Pensions Regulator’s annual report 2023 statement. With draft legislation published in July 2024 to adopt a significantly increased cybersecurity preparedness and incident reporting regime in the Heads of Bill of the National Cyber Security Bill, readers may be interested to read more about grant assistance funded by the EU and announced by Enterprise Ireland to assist businesses with cyber security. The Cyber Security Review Grant will assist SMEs to take steps to review and update their online security measures to mitigate against the risk of cyber-attacks.  Click also to read an article by the IDA on what makes Ireland a hotbed for cybersecurity talent.  Click for a fact sheet from the European Data Protection Supervisor called Don't open the floodgates to your personal information The 17th of October is National Women’s Enterprise Day. Click here to read more about the initiative of the Local Enterprise Offices. There are 14 events lined up across the country that will see some of Ireland’s best female entrepreneurs and businesswomen share their stories of challenges and success. You can also click here for more information and registration.   This information is provided as resources and information only and nothing in the information purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the information. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of the information we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained herein.

Eimear O’Hare provides insights into how private equity can support business growth and outlines the critical steps to ensuring success In today’s fast-paced business landscape, owners and shareholders must be prepared to make pivotal decisions that shape their companies' future. Whether it's scaling operations, innovating or preparing for an exit, private equity (PE) has emerged as a powerful tool to unlock growth, create jobs and drive value. With 91 percent of businesses surveyed by BDO recommending the PE journey, it is clear that many companies view this as a path to success. However, misconceptions persist, often overshadowed by high-profile, negative stories in the media. The transformative power of private equity Private equity is far more than just capital; it’s a partnership that can catalyse significant growth, operational improvement and value creation. Under PE ownership, 87 percent of companies have reported increased growth —illustrating the transformative potential of these investments. PE firms bring not only financial resources but also strategic guidance, expertise and networks that can help scale businesses to new heights. However, despite the clear benefits, some business owners hesitate to explore PE, often due to a lack of understanding or misconceptions about what it involves. Negative press can obscure the positive outcomes, leading to misplaced fears about loss of control or aggressive management. Strategic alignment: where to start Embarking on the private equity journey requires a strategic mindset. The first step is to define clear objectives – whether that is rapid expansion, operational restructuring or planning for an eventual exit. Business owners must also consider what success looks like for their business, both in the short and long term, and ensure these goals align with a potential PE partner. PE funds vary widely in size, sector focus, geographic reach and investment strategy. It is essential to find a partner whose vision aligns with your own and who can offer more than just capital. Preparing your business for private equity investment Thorough preparation is the foundation of a successful PE investment. PE firms seek scalable businesses with a compelling equity story – one that clearly outlines growth opportunities, competitive advantages and a roadmap for value creation. They need to be ready to present a robust business plan, detailed financial forecasts and a clear strategy for growth. Even if your business isn't fully prepared for a PE partnership, PE firms often provide the resources and expertise needed to get you ready for scaling. This might include investments in key areas such as leadership, technology or operational processes. Choosing the right PE investor Selecting the right PE investor can have a lasting impact on the trajectory of your business. Engaging with both current and past portfolio companies is a valuable way to gain insights into an investor’s style, involvement and approach to value creation. Beyond financial backing, understanding an investor’s cultural fit, and their track record supporting growth, is paramount. The PE landscape is diverse, with funds varying in size, focus and geographic reach. From sector-specific funds to those with a broader investment scope, finding the right match for your business’s ambitions requires a deep understanding of the market. Crafting your equity story The equity story is the narrative that encapsulates your company’s growth potential and value proposition. It is critical for aligning all stakeholders – management, investors, and employees – around a shared vision for the future.  A well-crafted equity story should outline your company’s competitive advantages, growth strategy and the steps required to realise value, whether through operational improvements, market expansion or innovation. Navigating the path to exit Private equity isn’t just about growth; it is also about exit planning. For many business owners, PE offers a strategic path to prepare for a future sale, merger, or IPO. The goal is to enhance the business’s value over a period, creating multiple exit scenarios that allow both the entrepreneur and investors to realise returns. Understanding the potential exit options early on is crucial to shaping your business’s trajectory. Whether you aim to hand over control or retain a significant stake post-investment, aligning your exit goals with those of your PE partner is vital. Expand and innovate PE is a powerful tool for business owners seeking to expand, innovate and ultimately realise the full value of their company. However, success demands careful preparation, strategic alignment and choosing the right partners. Eimear O’Hare is a Senior Manager in BDO Ireland’s Deal Advisory group