Section 837 TCA 1997 entitles a member of the clergy or a minister of any religious denomination to claim certain deductions against any profits, fees or emoluments arising from their profession. Revenue has updated the Tax and Duty Manual regarding the Representative Church Body Cost of Living Accommodation Allowance to include the allowance for 2023, with updated examples.

Revenue has updated the Tax and Duty Manual which provides guidance on the Rent-a-room Relief. Section 216A TCA 1997 exempts certain sums arising to an individual in respect of letting rooms, for residential purposes, and the provision of meals or other services in connection with the letting. The guidance, including relevant examples, has been updated to: Clarify when relief is not available between family members Detail how the Rent Tax Credit interacts with the rent-a-room relief (section 7.2) Confirm that the Mortgage Interest Tax Credit does not affect entitlement to rent-a-room relief (section 7.3).

Revenue has update the Tax and Duty Manual which provides guidance on the tax treatment of the reimbursement of expenses of travel and subsistence to office holders and employees, as follows: Guidance regarding the mandatory reporting by employers under Enhanced Reporting Requirements (ERR) as the payment of travel and subsistence expenses free of tax comes within the scope of the ERR (paragraph 1.4) Increased Civil Service subsistence rates applicable from 14 December 2023 (appendix 1).

Revenue has updated the Tax and Duty Manual regarding payments made without deduction of income tax to reflect the change in tax bands introduced by Finance (No. 2) Act 2023, with updated examples where relevant. The updated guidance also clarifies that re-grossing will apply by reference to the applicable income tax rate only, i.e., Universal Social Charge (USC) and PRSI will not be included for the purposes of calculating the re-grossed amount. Where an employer makes payments without the deduction of income tax which fall within the provisions of section 986A TCA 1997, the employer is liable to pay the amount of tax due in respect of the re-grossed amount of the payment.  Re-grossing applies where either there is total non-operation of PAYE in respect of emoluments to an employee or an employer disguises the payment of emoluments.

The Central Statistics Office has published the Quarterly National Accounts for the first quarter of 2024. Modified Domestic Demand (MDD), a broad measure of underlying domestic activity that covers personal, government, and investment spending, went up by 1.4 percent in Q1 2024. The globalised industry (excl. construction) sector contracted by 6.5 percent in Q1 2024 as compared with Q4 2023, reflecting the volatility of production in the multinational sectors. While there was a mixed picture for sectors focused on the domestic market, overall there was growth of 1.7 percent for the sectors combined. Commenting on the figures, Minister for Finance, Michael McGrath T.D., said: “While GDP was up in the first quarter, I recognise that GDP continued to fall on an annual basis at the start of this year. As is widely acknowledged, GDP is not a useful measure in assessing the living standards of domestic residents, given the outsized role the multinational sector plays in our economy. The annual decline reflects the volatile nature of multinational production, which can swing significantly from one quarter to another. In terms of the domestic economy, I am encouraged to see that Modified Domestic Demand – my preferred metric – grew strongly in the first quarter of this year. Importantly, consumer spending meaningfully contributed to this growth, increasing by 0.6 per cent over the quarter. Clearly this a reflection of the continued strength of the labour market, with almost three quarters of the working age population now in work. Additionally, the significant easing in inflation over recent months has come as welcome relief for households and businesses alike. The strength of investment by firms over the quarter has also been a positive development. This investment, primarily by the multinational sector, will boost the productive capacity in our economy and will bring with it increased employment and exports in the years ahead. I also expect housing supply to continue to grow solidly in the year ahead, with over 50,000 new units commenced in the twelve months to April 2024. Looking ahead, inflationary pressures are now returning to more normal levels and this should bring with it a boost to household real disposable incomes. As the year progresses, the increase in real incomes should further support growth in our domestic economy. That said, we are nevertheless living through a time fraught with uncertainty, geopolitical tensions and a changing economic landscape. Against this backdrop, Government remains committed to careful budgetary management. We will continue to strike the right balance, ensuring that spending is both sufficient and sustainable, meeting the needs of today without compromising the future needs of our people in the years to come.”

The Department of Finance and the Department of Public Expenditure, NDP Delivery and Reform have published the Fiscal Monitor for May 2024. This month’s report shows an increase in tax revenue to end-May of €1.2 billion (up 6.2 percent). The increase was driven by strong VAT receipts, up €0.4 billion (12.2 percent) on the same period last year. Income tax receipts increased by €0.9 billion (6.7 percent) when compared with the same period in 2023. Corporation tax receipts showed a recovery from the decline in quarter 1 and are now on a par with the same period last year. Commenting on the figures, the Minister for Finance, Michael McGrath T.D. said: “May is an important month for tax revenues in the exchequer calendar and the positive performance is a welcome indicator of the strength of our economy, most clearly reflected in the healthy growth in income tax and VAT revenues. With a record 2.71 million now at work in Ireland and incomes rising faster than the rate of inflation, living standards are improving again and consumer activity in our economy is being supported. Of course, the most notable feature of the May tax outturn is the spike in corporation tax receipts. As a result, overall corporate tax revenues have recovered after a sharp drop in the first quarter of the year and are now level with the same period last year. I would caution, however, that the significant volatility, in both directions, we have seen from month-to-month in this revenue stream is yet more evidence of the unreliability of these highly concentrated receipts, and the associated risks this brings to our public finances. The fact that we are highly dependent for a large portion of our corporate tax receipts on a very small number of companies requires a decisive policy response to ensure our public finances are sustainable into the future. We cannot necessarily rely on some of these receipts into the future. That is why the setting up of the Future Ireland Fund, and the Infrastructure, Climate and Nature Fund is a landmark and necessary policy development and one I am determined to deliver on. This vulnerability underscores the importance of continuing to pursue a balanced and sustainable budgetary policy. With this in mind, Government will set out the fiscal parameters for Budget 2025 in the Summer Economic Statement in the coming weeks.”

Last week Revenue published a detailed statistical report on the Debt Warehouse Scheme. Over 93 percent of the €3.2 billion debt warehoused at its peak in January 2022 has been either paid in full, secured under a phased payment arrangement (PPA) (or in the process of being secured), or is awaiting approval to offset the debt. In May, €100 million of warehoused debt was collected. At the time of writing, 12,747 businesses have agreed PPAs totalling almost €1.2 billion. Revenue will continue to monitor compliance with the terms of PPAs. All current returns and liabilities should be submitted and paid on time for businesses availing of PPAs to continue availing of the 0 percent interest rate. Where businesses encounter difficulties paying current taxes, they should engage with Revenue so that a mutually acceptable solution can be found. Demands were issued to 11,724 businesses with warehoused debt that had not engaged with Revenue by the 1 May 2024 deadline. Forty percent of those businesses have since engaged. With a total debt of €100 million, the remaining 7,024 businesses have been removed from the warehouse. This debt is now subject to normal collection and enforcement proceedings and is subject to interest at the standard rate of 8 – 10 percent as appropriate. Further information is available in Revenue’s press release. Commenting on the scheme, Minister McGrath stated: “I wish to acknowledge the work of the Collector General’s Division in Revenue and the success of the Tax Debt Warehousing scheme in supporting viable businesses and employments during an unprecedented and exceptionally difficult trading environment. Thanks to their efforts, the scheme successfully offered valuable and practical liquidity support to businesses by assisting with their cash-flow, thereby preventing business failure. I also wish to acknowledge the significant levels of engagement to date by taxpayers and their agents in agreeing realistic payment plans tailored to their particular circumstances. As a result of their engagement, the amount of warehoused tax debt has reduced by a substantial €284 million since January of this year. For those customers who have agreed PPAs, it is important to note that in order to retain the 0 per cent interest rate, it remains a key condition that current taxes are filed and paid as they fall due, and that all monthly payments are honoured as agreed. It is important to highlight that any taxpayer experiencing temporary cashflow difficulties which impact on their ability to meet their tax obligations on a timely basis should engage with Revenue at the earliest opportunity. Revenue will work with viable businesses in a fair and pragmatic way to agree mutually acceptable payment solutions. On a case-by-case basis this may include options such as a payment deferral or a payment break, rather than deploying debt collection and enforcement options.”

As 2024’s global elections shape business, corporate governance professionals must anticipate changes to compliance and ESG regulations, says Dan Byrne We are in full election mode in 2024. About 50 countries – representing around half of the world’s population – are expected to hold elections this year. Indonesia went to the polls in February, and Mexico, South Africa and India have just finished. The European Union cast votes for bloc-wide representatives on 7 June, and the United Kingdom will follow with a general election in July. Then there’s the small matter of the US Presidential Election in November, rounding off a truly remarkable year for democracy. Corporate governance and elections It’s crucial to recognise that this year’s elections will shape the leadership landscape for the rest of the decade and significantly impact corporate leaders, who will be observing them with keen interest. So, what should corporate governance professionals watch for in these elections? The intensity of regulations It’s the defining question of this corporate generation: how many rules will come down from elected officials? Before going any further, we should acknowledge that the volume of government regulations worldwide has generally increased, meaning more responsibility for directors and more robust penalties for getting it wrong. That said, regulations are broad, and there will always be political tug-of-war over how much control should be placed on businesses. Take the UK, for example. The current Conservative government promised to strengthen the country’s corporate reporting system, but in November 2023, it rolled back many of these proposals amid fears that Britain’s competitiveness would be harmed. Corporate leaders should watch prominent politicians to see how they plan to strike this careful balance between integrity and competitiveness. For many boards, it’s not about whether regulations will strengthen; it’s about the pace of that strengthening. A fiscally conservative government, less prone to market intervention, could easily slow the pace, perhaps prompting a rethink of strategy. ESG Beyond any doubt, these global elections will have a significant impact in shaping the future focus on ESG. There are two main reasons for this: The EU has seized on ESG over the last decade, if not in name, then in principle. Efforts to reach net zero, advance diversity initiatives and enhance reporting requirements through CSRD have dominated the bloc’s political agenda. The sheer scale of ESG-related initiatives means these trends will likely continue no matter what the next European Parliament looks like. That said, the political climate in Europe is changing. Corporate leaders should watch to see how pushback against reporting requirements and net-zero transitions, as well as hot-topic issues like immigration, will translate into votes. Will it mean more seats won by parties on the right or by those with other vested interests such as protecting agriculture? If so, the pro-ESG agenda may suffer from greater political pressure, hampering things like directive adoption and implementation, potentially meaning your corporate strategy might need to change or rewind in the short term. Make or break in the US The United States has become an ESG battleground – a distant landscape from the EU. In the US, politicians fight over its very existence rather than its pace of implementation. Critics of ESG in the US claim it harms investors’ returns and infringes on their free market rights. In some states, laws have already been enacted to prevent ESG investing where possible. The composition of the next US Congress and the person in the White House will ultimately decide whether the anti-ESG movement will take hold on a national level. If it does happen, US companies will then be in a different environment, and their corporate strategies will have to reflect that.  Will your company continue to incorporate ESG? If yes, will you be public with it or approach it under a different name to avoid politics? These questions have been raised before in the US; we just need to wait and see what kind of political landscape is forming around them. What will the changes be? For corporate leaders, the strength and pace of regulations regarding governance and ESG are the things to watch. The 2020s are proving highly polarised politically, and big changes in government will likely mean your strategies will see a change on the ground in some shape or form. Your job is to be clear on what that change will be, and how your organisation will manage and capitalise. Remember, though, that regulations are just one part of the story. And your company still needs to stay in touch with shareholder, consumer and community moods. It’s a hard game, but a rewarding one if you get it right. Dan Byrne is a writer with the Corporate Governance Institute

C-suite leaders must navigate the geopolitical landscape to mitigate business risks, writes Enda McDonagh According to a recent poll conducted at The PwC Leadership Exchange, C-suite executives view geopolitical risks as the most significant threat to their businesses in the coming year. As global uncertainties persist, leaders must negotiate an increasingly complex landscape to ensure the resilience and success of their organisations. The poll results reveal that after geopolitical risks (41%), the top concerns for C-suite executives are macroeconomic volatility (28%), climate change (18%), cybersecurity (6%), skills/talent shortages (5%) and supply chain disruption (2%). These findings underscore the multifaceted nature of the challenges facing business leaders today. Addressing geopolitical risks requires a proactive and strategic approach by C-suite executives. By staying informed about global developments, fostering relationships with key stakeholders and developing contingency plans, leaders can better position their organisations to weather potential storms. Additionally, investing in risk management processes and building a culture of resilience can help companies adapt to changing circumstances and emerge stronger. Key takeaways for navigating geopolitical risks 1. Continuously monitor the geopolitical landscape and assess potential impacts on your business Stay informed about global events, regulatory changes and shifting power dynamics that could affect your operations, supply chains or market access. Regularly update your risk assessments and adapt your strategies to minimise exposure to geopolitical disruptions. 2. Foster a culture of resilience and agility within your organisation Encourage cross-functional collaboration in your organisation, empower teams to make decisions quickly and invest in training and development to build a workforce that can adapt to changing circumstances. By cultivating a resilient and agile mindset, your organisation will be better equipped to manage the challenges posed by geopolitical risks. 3. Develop comprehensive contingency plans to mitigate potential disruptions Identify critical vulnerabilities in your operations, supply chains and market presence, and create detailed plans to address potential disruptions. These may include diversifying supplier networks, exploring alternative markets or investing in risk transfer mechanisms such as insurance. By proactively planning for various scenarios, you can minimise the impact of geopolitical risks on your business. As C-suite leaders navigate an increasingly complex global landscape, it is crucial that they remain vigilant and adaptable. By prioritising risk management, building resilience and developing robust contingency plans, executives can position their organisations for success in the face of geopolitical uncertainties. Enda McDonagh is Managing Partner at PwC Ireland

In the world of international shipping, the Irish tonnage tax regime stands out as a cornerstone policy supporting the maritime sector. Fidelma Cosgrove explains why Introduced in 2002, the EU-approved Irish tonnage tax regime aligns with broader EU efforts to promote a robust and competitive maritime industry across EU member states. The regime continues to support economic growth and sustain employment in the Irish maritime sector. The Irish tonnage tax system replaces traditional corporation tax calculations with a formula based on a qualifying ship’s net tonnage. The regime provides certainty and predictability to companies operating in a highly cyclical sector within the domestic and global economies. It not only stabilises financial planning for qualifying companies but also helps those companies remain competitive internationally. Alternative method of taxation The regime is currently utilised by a range of companies across the dry bulk, tanker and liner trades amongst others, playing a crucial role in strengthening Ireland’s maritime industry. It operates as an alternative method of taxing the profits of qualifying shipping companies. Instead of being taxed on trading profits (as under normal corporation tax rules), qualifying companies are taxed on a nominal notional profit computed as a profit per day based on the net tonnage of the ships operated by them. The standard corporation tax rate of 12.5 percent, or 15 percent (if within the scope of the OECD Pillar Two GloBE rules), is then applied to the notional profit. Foreign exchange and other financial gains associated with the shipping business are included in the regime. Advantages of the tax regime There are several advantages to this tax regime. ‘Relevant shipping income’ is exempt from regular corporation tax and the term is broadly defined. Ireland’s tonnage tax is not a tax deferral, representing the final corporation tax liability on those profits and results in permanent savings. There are no tax barriers to the establishment of an Irish operation and start-up costs are generally low. Repatriation of profits is facilitated by Ireland’s comprehensive network of tax treaties, which provide favourable dividend and interest withholding tax rates. A full exemption from capital gains tax applies on gains arising on qualifying ships provided those assets have always been used within the company’s tonnage tax trade and financing into the tonnage tax company is not restricted. There is normally no exit charge when a company leaves the regime by ceasing to carry on shipping operations within Ireland. The Irish regime offers benefits to ship managers and pools over EU competitors. There is no requirement for the ships to be Irish registered or Irish flagged. Profits from ship management activities also benefit from the regime. Furthermore, there is no vessel ownership requirement for ship managers. The strategic and commercial management tests under which the regime operates are EU-approved and align with the OECD Pillar Two GloBE requirements. The regime does not impose training requirements. Finally, a tonnage tax company may charter up to three times the amount of tonnage it owns/bareboat charters in. A thriving industry The Irish tonnage tax regime stands as a pivotal framework for fostering a thriving maritime industry within Ireland. By offering a stable and predictable taxation environment, it supports long-term financial planning and enhances the international competitiveness of Irish shipping companies. As the regime continues to evolve, it will undoubtedly remain integral to the sustained growth and innovation in Ireland’s maritime economy. Fidelma Cosgrove is Tax Director at KPMG

Gillian Sadlier has been elected Chair of the Chartered Accountants Ireland Ulster Society at its 117th AGM in Belfast today. Taking office, Ms Sadlier, a senior manager with Bank of Ireland UK committed to advancing measures to address the skills shortage that is impacting the profession in Northern Ireland.    A new analysis conducted for the Ulster Society found that 3 in 5 (61%) of member businesses /organisations are experiencing skill shortages in 2024 (62% in 2022 and 48% pre COVID). 75% of respondents report increasing difficulty in finding the right people for jobs in Northern Ireland. Furthermore, 75% of members surveyed feel that the shortage of skilled labour will negatively impact Northern Ireland’s economic performance in the coming year.   During her term, Ms Sadlier has committed to focusing on attracting and retaining talent into accountancy in Northern Ireland, so that the profession can continue to support economic growth and development. A key part of this will include engaging with second and third level students and working closely with trainees and young professionals to support them through the early stages of their careers.   Commenting at the AGM, Ms Sadlier said:  “I’m delighted to build on the progress that Paul Millar made during his year as Chair in encouraging greater support for entrepreneurship and innovation. Northern Ireland has so much economic potential, with unique access to Great Britain and EU markets; strong transport links with our neighbours; an educated workforce; and a stable business environment. Some of the world’s leading international companies across data analytics, cyber security, life and health sciences, clean energy, and aerospace are located here.   “However, the skills shortage that is affecting so many companies threatens our ability to realise this economic potential. Our member survey lays bare the fear that this shortage will negatively impact Northern Ireland’s economic performance in the coming year. The restoration of the Executive is a cause for optimism, and skills and education should be front of mind for our elected representatives alongside other key priorities.   “My focus in the coming months will be on promoting Chartered Accountancy as a profession and on the development of people and personal skills to compliment the technical training that is fundamental to our role.  I want to show potential new entrants to the profession just how varied and full of opportunity a career in accountancy can be and to demonstrate the reality that being a Chartered Accountant genuinely allows you to become a ‘difference maker’”.  The Ulster Society represents over 5,000 local Chartered Accountants and is a district society of Chartered Accountants Ireland, the largest and oldest professional accountancy body on the island of Ireland.  Ms Sadlier joined Bank of Ireland over a decade ago, having spent seven years working on Invest Northern Ireland’s corporate finance team. She previously spent over 14 years in practice working with ASM Chartered Accountants and Coopers & Lybrand. She has served on the Committee of the Ulster Society for over eight years.   ENDS  

Welcome to the latest edition of Technical Roundup. In developments since the last edition, IAASA has published its 2023 Annual Audit Programme and Activity Report which gives a summary of the activities performed during 2023 and regulatory engagement work proposed for 2024.  The Global Reporting Initiative (GRI) has published ‘CSRD Essentials - The definitive guide to the EU Corporate Sustainability Reporting Directive’ which simplifies the key aspects of the CSRD and how the new reporting requirements will operate. Read more on these and other developments that may be of interest to members below. Financial Reporting EFRAG, the European Financial Reporting Advisory Group, has updated its Endorsement Status Report. This report now reflects the publication of IFRS 19 Subsidiaries without public accountability as well as amendments to IAS 7 and IFRS 7 relating to Supplier Finance Arrangements. The International Accounting Standards Board (IASB) and EFRAG, along with various other bodies will hold some webinars to introduce IFRS 18 for corporate entities and financial institutions on 7th and 11th June. The IASB has issued its May 2024 update and podcast. The IASB has issued some narrow scope amendments to the classification and measurement requirements in IFRS 9 Financial Instruments. These are intended to address diversity in accounting practice by making the requirements more understandable and consistent. ESMA, the European Securities and Markets Authority, has updated some Q&As on its website. The IASB has released a webcast discussing the changes proposed in its recently released exposure draft relating to Contracts for Renewable Energy. Auditing and Assurance Technical Alert 02/2024 – Sample Engagement Letter Terms in respect to the provision of Limited Assurance under the Corporate Sustainability Reporting Directive. TA 02 2024 has been issued to provide assistance to members when drafting engagement letters in respect to limited assurance engagements under the Corporate Sustainability Reporting Directive (“CSRD”) which has yet to be transposed into Irish legislation. Accountancy Europe has published its May 2024 Audit Policy Update. The International Ethics Standards Board for Accountants (IESBA) has released its 2023 Annual Report, Respecting the Past, Planning for the Future. 2023 Annual Audit Programme and Activity Report IAASA has published its 2023 Annual Audit Programme and Activity Report which gives a summary of the activities performed during 2023 and regulatory engagement work proposed for 2024. Anti–money laundering and sanctions The Home office in the UK has recently issued the Economic Crime and Corporate Transparency Act 2023: progress report. This is a report on the first 6 months of implementation and operation of the Economic Crime and Corporate Transparency Act 2023. It gives a useful summary of statutory instruments laid to date and the further regulations planned before the summer. (These plans have probably been affected by the recent calling of a general election in the UK).  Click here to access the report. On 24 April 2024 the European Union adopted a directive to harmonise criminal offences for violation of EU sanctions (the “Directive”).  The Directive was introduced to limit sanctions circumvention and to tighten enforcement and provides a common definition of what constitutes a violation of EU sanctions and provides for penalties for the violation of European Union restrictive measures. Please click here for a recent Institute news item on the Directive. Deputy Governor of the Central Bank of Ireland Derville Rowland spoke last month at the European Anti-Financial Crime Summit about Setting up the new EU Anti-Money Laundering Authority for success. You can read her speech here. Insolvency The Institute recently hosted a webinar on the Small Companies Administrative Rescue Process (SCARP) - Practical Issues. This discussion with David Swinburne and Philip Maher of Mazars included how to prepare for a SCARP, what to look out for and key matters to be aware of when considering the process. There was also discussion around some practical issues including how SCARP is working in practice, dealing with creditors and excludable creditors.  The recording is available here.   Sustainability The Financial Reporting Council has welcomes the appointment of Sally Duckworth as Chair of the new UK Sustainability Disclosure Technical Advisory Committee (TAC), for which it will act as secretariat. The Global Reporting Initiative (GRI) has published “CSRD Essentials- The definitive guide to the EU Corporate Sustainability Reporting Directive” which simplifies the key aspects of the CSRD and how the new reporting requirements will operate. The GRI has also published an article explaining the new naming system of the GRI standards. The GRI and International Sustainability Standards Board (ISSB) have announced that the two organisations will work together to optimise how their sustainability standards can be used together. EFRAG and the ISSB recently held a joint event entitled “Unlocking Synergy – Interoperability Guidance on IFRS Sustainability Disclosure Standards and ESRS”. A recording of the event can be viewed here. EFRAG has published a batch of 44 new explanations which are now included on its ESRS Q&A Platform. These Q&As are intended to assist stakeholders in the implementation of the ESRS standards. The ISSB has recently announced that jurisdictions “representing over half the global economy by gross domestic product (GDP) have announced steps to use the International Sustainability Standards Board’s (ISSB) Standards or to fully align their sustainability disclosure standards with those of the ISSB”. The ISSB has issued its May 2024 Update and Podcast. The Institute of Chartered Accountants of Scotland (ICAS) has published “Materiality Assessments in Corporate Sustainability and Financial Reporting” which discusses the different assessments of materiality within sustainability and financial reporting. The Global Accounting Alliance  (GAA) has published a report into recent workshops held on corporate natural capital accounting. The report highlights the importance of corporate natural capital accounting (CNCA) in helping businesses build resilience and value through nature-positive action and how accountants are well-placed to help drive uptake of CNCA across the market. Accountancy Europe, along with the American Chamber of Commerce to the European Union, CFE Tax Advisers Europe and Ecommerce Europe have called on the European Commission to provide further guidance to Member States on applying the Vat Direction on charitable donations. The purpose of this is to alleviate concerns about VAT avoidance and to facilitate corporate donations across the EU. Accountancy Europe has published its May 2024 sustainability update. The IFRS Foundation has published two new webcasts to help explain the International Sustainability Standards Board’s (ISSB) disclosure requirements related to the current and anticipated effects of sustainability-related risks and opportunities on a company’s financial position, financial performance and cash flows. New and forthcoming legislation Company law changes The Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024 (the 2024 Act) was enacted on 9 May 2024. The commencement date of the 2024 Act has yet to be confirmed. While the bulk of the provisions amend employment legislation and establish an employment law review group, the 2024 Act also makes some amendments to the Companies Act 2014. A summary of the provisions relating to amendment of company law will be available from the Institute shortly. Other legislation The European Council has identified main priorities for the next legislative cycle and in doing so ensures the EU digital policy that will be developed while the Council conclusions aim to address both the challenges and opportunities of the digital sphere. Dept. of Enterprise Trade & Employment (DETE) news The Dept. of Enterprise Trade & Employment recently published the Second Update Report on the White Paper on Enterprise Implementation Plan 2023-2024. This Report details the work done in pursuit of priority DETE policy objectives such as Integrating Net Zero and Carbon Commitments and placing digital transformation at the heart of enterprise policy. You can access a copy of the report here. On May 15, 2024, the Irish Government announced a new business support package worth up to €150 million, aimed at bolstering SMEs which is designed to reduce costs, foster innovation, and ensure long-term sustainability for Irish businesses. The Department of Enterprise, Trade and Employment is inviting submissions to a public consultation on the implementation of the EU Artificial Intelligence (AI) Act, which was formally adopted by the EU on 21 May 2024 and is expected to enter into force in June 2024. This consultation is intended to inform Ireland’s approach to implementing the Act and, specifically in relation to the configuration of national competent authorities required for implementation. All EU Directives transposed by the Department of Enterprise, Trade and Employment between 2012 and 2024 have been published as a list in pdf format on their website for information. Readers are reminded to subscribe to the Department of Enterprise Trade and Employment Enterprise newsletter which DETE issues periodically and is a good source of information on news within the Department. You can subscribe to the newsletter here.   Other The Data Protection Commission (“DPC”) has published its 2023 annual report which highlights its workload and regulatory accomplishments over the last year. The Central Bank has published their Annual Report and Performance Statement for 2023. The Annual Report includes describes the Central Bank’s work and financial results for last year as well as their priorities for the current year.  The Irish Charities Regulator has now published its report on Ireland’s charity sector from 2019 to 2022, an analysis of data from annual reports submitted to it. The report provides insights for example into changes to charity income, expenditure and employment. You can read more here in the report. For further technical information and updates please visit the Technical Hub on the Institute website.      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.

Small businesses don’t need big budgets to kickstart DEI initiatives. Conor Hudson and Hugo Slevin outline some practical first steps to success from the outset Last year in Ireland, close to 1.2 million people around the country were employed by small- and medium-sized enterprises (SMEs), representing more than 90 percent of all businesses in Ireland.  While Chartered Accountants play a pivotal role in working with these firms and supporting their needs and requirements, many are also operating as, or directly employed by, SMEs.  As diversity, equity and inclusion (DEI) initiatives become increasingly important in today’s workplace, there is a need to ensure that support is provided to SMEs and start-ups developing and implementing their own DEI strategies.  Larger employers will have substantial resources dedicated to DEI, whereas SMEs and start-ups are more likely to face challenges in developing successful strategies due to limited budgets and often already stretched employee time.  This does not mean that these challenges are insurmountable, however. Numerous resources are available to support smaller businesses in their DEI journey, and with the right approach, many will find that a good DEI strategy will support a happier and more productive workforce. Why is it important for SMEs to have a DEI Strategy?  Having a DEI strategy can bring many benefits for employees and business owners alike.  From an employee standpoint, being recognised and supported – and feeling able to bring their true selves to work – results in greater engagement and trust in their employer, leading to stronger performance.   For businesses, having a recognised DEI strategy can enable access to a wider and more inclusive pool of talent, while also helping to improve innovation due to a diversified workforce with a wider range of views and perspectives.   How should an SME approach developing a DEI Strategy?  In developing DEI strategies, it is recognised that SMEs may face some constraints. It is important that they set realistic goals in the development and implementation of this strategy. Trying to make too many changes or developing a superficial plan is of little benefit and can be damaging in the longer term.  The first steps to DEI success Here are some practical steps SMEs can take to develop an effective DEI strategy:  Identify a leader and ensure ownership of the DEI strategy It is important that a recognised leader within the organisation takes ownership of its DEI strategy. This illustrates that, from a senior level, the strategy is being afforded a high level of priority. While others within the organisation can actively support development, a bottom-up approach may not be as successful. Foster a culture of openness and communication Openly encouraging dialogue and actively listening to employees’ experiences will create a sense of belonging and support diverse perspectives. An internal social group could be a good starting point for this.  Provide DEI training to all staff DEI training can help raise awareness, promote understanding among staff members and kickstart conversations about the business need for an effective DEI strategy. Several non-profit organisations such as ShoutOut (shoutout.ie) offer a wide range of workshops that are affordable and can make an immediate impact. Work with existing groups and organisations Many business groups and representative bodies – Chartered Accountants Ireland and IBEC, for example – offer diversity resource hubs and forums SMEs can leverage to support their DEI journey. It is also worth encouraging employees to volunteer their time and skills to organisations such as BelongTo (belongto.org). Review policies regularly Reviewing your policies, with buy-in from your employees, can help to identify potential biases or barriers to inclusion, including hiring practices, as well as helping you to gauge the success of your DEI initiatives through engagement with your workforce. Make adjustments as required to ensure all employees are treated fairly and make sure any policy changes you introduce are communicated clearly across the board. Conduct employee surveys Conducting regular employee DEI surveys can help you to determine the success, or otherwise, of your diversity efforts by gauging how your employees perceive them and view any supports they are receiving. It is important to make sure these surveys are anonymous to protect employees who might otherwise be hesitant to provide honest feedback. Establish an Employee Resource Group Encourage and support the formation of Employee Resource Groups, allowing employees from minorities to come together and advocate for positive change within your organisation. Regardless of budget limitations, SMEs can make significant strides in advancing DEI by prioritising a commitment to inclusivity, fostering open dialogue, exploring community resources and implementing thoughtful initiatives.  Diverse teams greatly improve talent acquisition and retention, decision-making quality, innovation and insight. True and authentic DEI initiatives will motivate your employees to really sponsor your brand, ensuring your SME thrives in a competitive world.  Conor Hudson and Hugo Slevin are Chartered Accountants and members of members of BALANCE, the Institute’s LGBTQ+ Allies network group The many advantages of DEI strategies for SMEs With Pride 2024 celebrations getting around the world for the month of June, four members of BALANCE, the LGBTQ+ Allies network group of Chartered Accountants Ireland, share their personal views and insights into the importance of effective diversity, equity and inclusion (DEI) strategies in all businesses, including SMEs. Sarah McAleese, KPMG Inclusive DEI initiatives need not always entail significant financial investment for SMEs. From an accessibility standpoint, a standardised email sign-off for meeting invitations, such as, “should you require any additional accessibility accommodations or support, please do not hesitate to let us know,” can serve as an initial step in cultivating an open environment, where employees and clients alike can bring their “true selves” to work.  Offering and providing readily available additional support upfront demonstrates a proactive commitment to ensuring everyone feels supported in the workplace.  Another example of a low-cost accessibility initiative may be introducing designated sensory-friendly hours in specific office areas to cater to the needs of neurodiverse individuals.  It is crucial, however, that while individuals are encouraged to avail of any additional supports, they should never feel pressured to disclose information they are uncomfortable sharing. Cian McKenna, AXA Ireland Creating an inclusive culture in the workplace can start with the smallest acts spurring valuable conversation across an organisation.  Even in a hybrid workplace, watercooler moments are alive and well, with the topic of the day always including new initiatives the company is putting into place.  I have been fortunate during my time as part of the finance team at AXA Ireland to see firsthand the impact DEI initiatives can have across the board. Since starting at AXA, I have seen regular initiatives focused on LGBTQ+ inclusion, such as the introduction of email signatures with the AXA logo in Pride colours, Pride lanyards and our Sports and Social Committee using a Pride theme for their annual summer party (with proceeds going to LGBTQ+ charities).  Most recently, AXA introduced a campaign to suggest the inclusion of pronouns in email signatures.  While these may seem at first like small acts, all have naturally fostered a sense of allyship, encouraging an invaluable sense of belonging and acceptance in our workplace. Eimer Proctor, ASM Implementing DEI initiatives is not just about celebrating Pride, changing your company logo for Pride month or purchasing rainbow lanyards. DEI is an ongoing, inclusive process and small steps can lead to significant, positive change. At ASM (B) Ltd, we have recently embarked on our own DEI journey, and we signed the Diversity Mark NI Charter to demonstrate our commitment to this.  In seeking the Bronze accreditation and demonstrating that we are a gender diverse professional services firm, the first target requires us to develop a DEI strategy with supporting actions to measure what success looks like.  As accountants, we like numbers and data, so – in setting clear and measurable targets for gender diversity – we consider that this will allow us to take those crucial small steps in progressing our DEI efforts. Paul Cassidy, SKY Leasing SKY Leasing has created a DEI policy that is reviewed and refreshed annually. This commitment demonstrates that embedding diversity and inclusivity across people, policies, processes and practices is a key priority for the organisation.  Some of SKY Leasing’s many DEI initiatives include encouraging our female workforce to join and contribute to industry bodies championing women in the workplace, such as Women in Aviation (AWAR).  SKY Leasing’s CFO, Ailbhe Kenny, is a participating AWAR mentor and some of the female members of our team have also participated as mentees, sharing knowledge on best practice and acting as champions and ambassadors for other women in our workplace. Our company also promotes diverse experiences, backgrounds and work styles among employees. This encourages us to embrace how we authentically and naturally approach our own work as well as how we work together.    

European countries that have recognised Palestinian statehood have to decide what impact they will have on achieving a two-state solution, writes Judy Dempsey In May, the governments of Ireland, Norway and Spain recognised a Palestinian state. The war between Israel and Hamas was the catalyst.  Dublin, Oslo and Madrid had lobbied other European governments to be consistent in recognising the state of Palestine and in trying to push forward the idea of two states – Israel and Palestine, living side by side. Their efforts, so far, have come to nought. Now that they have unilaterally recognised Palestine, they face tough questions. First, what do they want this decision to achieve for it not to be just a symbolic gesture?  A state needs land, sovereignty, independence and internationally recognised borders. Palestine has none of these.  The illegal Israeli settlements entrenched in the occupied West Bank, which have continued during the Israel-Hamas war, make a viable Palestinian state impossible.  And, despite support from the Biden administration for a two-state solution, Israeli Prime Minister Benjamin Netanyahu has consistently rejected the idea.  Second, what role will Europeans play, if any, in making a Palestinian state viable?  For decades, the EU paid lip service to the two-state idea, but it was toothless in stopping the expansion of settlements and the flow of funds to the corrupt Palestinian Authority at the expense of genuinely independent civil society movements. The longer the settlement expansion continued, the more radicalised Palestinian society became. Hamas found fertile ground in Gaza, which it has controlled since 2007 following Israel’s withdrawal from the settlements in 2005.  Since then, Gaza’s population has been subject to the dictates of Hamas, which has tolerated no dissent, and to Israel, which has strictly controlled the movement of people, trade, goods and food in and out of Gaza. Now, EU divisions over the conflict are deeper than ever with little prospect of unity on the issue of ending the war or recognising Palestine.  Some other EU countries may follow Ireland, Norway and Spain – but don’t expect unanimity. Spain, Greece, Cyprus, Slovakia and Romania have yet to recognise the independence of Kosovo, which was declared as far back as 2008. If unity is impossible over Israel and Gaza, maybe it is time to find interim options.  What about forming coalitions of the willing instead of enduring endless disagreements and diluted foreign policy decisions? The EU’s differences over how Ukraine could restore its sovereignty and the ongoing disputes over the Israel-Palestinian conflict highlight the need for such coalitions to overcome deadlocks.  While not ideal, this approach may prompt EU policymakers to realise that constant disunity makes Europe weak and ineffective. *Disclaimer: The views expressed in this column published in the June/July 2024 issue of Accountancy Ireland are the author’s own. The views of contributors to Accountancy Ireland may differ from official Institute policies and do not reflect the views of Chartered Accountants Ireland, its Council, its committees, or the editor. Judy Dempsey is a Non-Resident Senior Fellow at Carnegie Europe and Editor-in-Chief of Strategic Europe

Business owners must consider the tax implications of key business decisions to avoid pitfalls and realise the full benefits, advises Kerri O’Connell  For many successful business owners, tax planning and wealth management will be inextricably linked, requiring a careful approach to future considerations at a relatively early stage in the development of their business. According to Kerri O’Connell, Tax Adviser and Principal at Obvio Tax Services, not all owners are aware of the tax implications of the decisions they make as they build their business, however. “The time for considering these issues is before significant value has built up in the business as problems can arise when there has been no consideration of the potential sale of some or all of the business, or the investment assets, or for the future reliance on tax reliefs on business transfer,” says O’Connell. A Registered Trust and Estate Practitioner with the Society of Trust and Estate Practitioners Ireland, O’Connell has been advising SMEs in Ireland for over 25 years as both a Chartered Accountant and Chartered Tax Advisor. She founded Obvio Tax Services in 2015 to advise business owners on tax matters at each phase of the business cycle from start-up through to expansion and sale or succession. “What I’ve learned is that, for many owners, their focus understandably will be on getting their business onto a sound footing and then building it from there,” she says. “When their business becomes valuable, however, problems can arise if they fail to focus on their personal finances. This issue can be particularly acute when the business is incorporated, the owner has no pension scheme or some of the business surpluses have been used for investments.”  It is crucial, therefore, that business owners consider their exit plans at a relatively early stage in the development of their business and avail of good tax advice. “It is very important to get tax advice specific to your business when it is growing and making profits,” O’Connell says. Access to retirement relief on Capital Gains Tax (CGT) could potentially exempt the transfer from CGT. Alternatively, CGT entrepreneur relief may apply: “this relief applies a 10 percent CGT rate on the first €1 million of gains with the usual 33 percent CGT rate applicable to any surpluses,” O’Connell explains. Several conditions must be met in order for these CGT reliefs to apply, requiring advance planning.  “In a family succession situation, the beneficiaries, be they children or grandchildren, will look to rely on Capital Acquisitions Tax (CAT) business property relief or CAT agricultural relief,” O’Connell says. “Again, many conditions must be met, but if either of these reliefs are available, they can potentially reduce the taxable value by 90 percent and so potentially reduce the effective CAT rate to 3.3 percent.” Other exit options open to owners include selling their business, or passing ownership on to senior leaders in the business through an internal takeover. “If you are selling your business, pre-sale restructuring may be required to separate different trades, or to separate business and investment assets. This restructuring will attract tax liabilities unless various restricting reliefs can be relied upon,” O’Connell says.  If your exit involves an internal takeover, meanwhile, pre-sale restructuring may be required to isolate the sale asset.  “You may also need to consider the potential impact of some anti-avoidance legislation, which can operate to turn a capital event – subject to CGT and potentially attracting CGT reliefs – into an income distribution, taxable to full income taxes, USC and PRSI,” O’Connell says. Business structure As businesses grow and expand into new markets, it is also important to consider tax implications from the point-of-view of business structure, O’Connell advises. “Once the decision has been made to develop a new income stream or enter a new market, it is important to stop and think first about the right business structure going forward,” she says. “Don’t put off thinking about structure until a year or two of trading to ‘see how it goes’ – you’re potentially storing up tax problems. “If you have identified new income streams with different plans for each stream, a group structure may be appropriate in terms of the retention of different businesses, their future sale or the introduction of key employees as shareholders.” Tax issues arising from the creation of a group structure can be managed if conditions are met for the relevant tax reliefs to apply, O’Connell says.  “You will also need to think about business structure if you are expanding into overseas markets and deciding whether to set up a separate company or overseas branch in a new country. Tax advice in that country will be required either way and you will also need to consider the tax implications of profit repatriation. “Do bear in mind that, if you have sales staff operating in another country, this will likely create payroll tax issues in that country as well as potential exposure to corporation tax.” As growth ramps up and business owners look to the next stage of their company’s development, it is a good idea to consider the tax-based financing options open to them – for example, the Employment Investment Incentive Scheme (EIIS) or repayable tax credits for research and development (R&D) activities. Employment Investment Incentive Scheme “Changes introduced in Finance Act 2019 resulted in the entire EIIS becoming self-assessed so there is no longer a requirement to secure advance approval from Revenue,” O’Connell says. “In my view, this was a positive step as the timeframes for securing approval had become unworkable. Recent Finance Act 2023 changes will potentially continue this positive momentum, with the maximum investment on which an individual can claim income tax relief now increased to €500,000.” A tiered system of relief has also been introduced depending on a company’s stage of development, as follows: 50 percent income tax relief for entirely new businesses; 35 percent tax relief for businesses operating for less than seven years; 20 percent tax relief for expansion/follow-on investment in businesses in operation for more than seven years.  “EIIS investors are used to the previous 40 percent rate of tax relief. In order to achieve more than a 35 percent rate now, they must invest in entirely new businesses,” O’Connell says. “It remains to be seen if there will be increased EIIS funding available for younger riskier businesses and if this will change when an EIIS scheme might fit into the financing mix for a young business.” R&D repayable tax credits  Changes to the R&D tax credit regime, introduced in recent years, mean that this credit may be wholly repayable to the recipient, making it a de facto source of finance for companies. “Finance Act 2023 changes introduce an uplift in the rate of R&D tax credit from 25 percent to 30 percent,” O’Connell explains.  “For SMEs with claims of up to €100,000, the repayments continue to be made across three instalments, but more of the repayment can now be frontloaded with up to €50,000 repayable in the first instalment.” Tax incentives: recent developments Finance Act 2023 introduced changes to retirement relief on Capital Gains Tax (CGT), effective from 1 January 2025, writes Kerri O’Connell The relief available on a transfer to anyone other than a child was previously subject to a cap of €750,000 total proceeds from qualifying assets, as long as the transfer took place after the owner turned 55 years of age and before they turned 66.  This later age restriction has been pushed out to 70. Any transfer made once the owner has turned 70 will be subject to a €500,000 cap.  For higher value businesses, the changes are negative as they introduce a maximum cap on retirement relief of €10 million total value of qualifying assets on any transfer to a child where the business owner is aged between 55 and 69. This cap is reduced to €3 million from age 70 onwards.  Previously, a claim for retirement relief on a transfer to a child before the age of 66 was unlimited as to the value of the qualifying assets transferred.  The reason for introducing different tax treatment depending on the age of the owner is to encourage the earlier transfer of businesses, but this policy aim may yet be defeated by the introduction of the new €10 million value cap.  Business lobby groups have come out firmly against the changes and understandably so, as the gift of a business to the next generation may now trigger significant tax charges, without any cash proceeds available to cover this.  While the 2022 Commission on Taxation and Welfare recommended such a cap, it did not set a proposed figure, and many would view the €10 million value as too low.  The Commission did, however, note that it should be ensured that the payment of tax on these gifts ‘does not undermine the viability of the enterprise’ and suggested the introduction of deferral arrangements or long payment schedules with low/no interest. These recommendations have not, to date, been taken up.  Another recommendation from the Commission is also worth highlighting. Typically, taxpayers will look to rely on CAT agricultural relief or CAT business property relief when receiving a gift of a farm or business.  The Commission recommended that these 90 percent reliefs be reduced and that the conditions attaching amended to ensure that the beneficiary actively participates in the farm/business they have been gifted. At the time of writing, however, this recommendation has not been taken up by the Department of Finance.

Mark Scully founded his own executive coaching firm to raise awareness of the benefits of neurodiversity in the workplace and support young professionals. For Mark Scully, his path to entrepreneurship as the owner of his own consulting business has been a highly personal endeavour. A qualified barrister, Chartered Accountant and Chartered Tax Advisor, Scully launched Braver Coaching and Consulting (gobraver.com) in February 2024 to promote neurodiversity in Irish workplaces and provide executive coaching to young professionals. The move followed his own autism diagnosis in 2021, which prompted Scully to leave behind a successful career as a Tax Director with KPMG in Dublin to set out on his own. “I’m passionate about organisations becoming more neuro-inclusive for the benefit of all employees and this is very much down to my own experience,” Scully explains. “Before I set up Braver, I found I loved coaching people at KPMG and raising people up. Looking out for others and wanting to help them – that was really the start of my focus on people development.” Originally from Cork, Scully studied law at UCC and was called to the bar shortly after. He went on to join KPMG aged 22 to train as a Chartered Accountant specialising in tax. Following his qualification, he worked elsewhere as a tax lawyer before rejoining KPMG 18 months later. “KPMG and Chartered Accountants Ireland had been brilliant to train with, especially as I had zero accounting knowledge before joining. I found I really missed the sheer scale of support on offer in a Big Four tax department, so I decided to go back to KPMG in 2016 as a manager,” he says. Overcoming challenges Scully was promoted to Associate Director in 2018 followed by Tax Director in 2021. Despite this impressive career progression, however, he found himself struggling with some aspects of his work and his mental health took a hit. “I had a perfectionist mindset and would sometimes find myself researching to the ‘nth degree’, getting into the details without seeing the big picture. I also didn’t realise that multitasking or shifting from one task to another ate up a lot of mental energy for me, but I wasn’t approaching work in a way which factored that in,” he explains. At times, Scully says he also found it difficult to navigate social dynamics in the workplace. “I was very social, but certain dynamics I just didn’t ‘get’ and I was expending a lot of energy trying to get that right, which I didn’t realise at the time. I just had this notion in my head of, ‘It’s coming so easy to others but not me. I don’t know what’s wrong with me.’ “I stopped taking proper care of myself, working long hours, and in the end that really impacted my mental health, so I sought out professional counselling and coaching.” The experience was, Scully says, “transformational”. “It really opened my eyes to the meaning and importance of mental health. I realised I was in a hole and, once I got out of that hole, I had this drive to help other people avoid the same. “Mental health was a big thing on my agenda, and I was always looking out for others in the department and making sure that their mental health was being looked after.” Scully became a mental health advocate at work, co-leading a wellbeing committee in his department. “I also received some excellent coaching which I found to be such a powerful tool for helping me implement positive changes in work and my personal life. So I studied it and became a coach myself and joined KPMG’s internal coaching panel to provide those benefits to others.” Genesis of Braver It was during a counselling session that the prospect of autism was first raised to Scully. This started him on his journey to educating himself about neurodiversity. This journey, combined with his years spent leading teams and coaching experience, formed the genesis of Braver, which he would go on to found in February 2024. “Getting the diagnosis really allowed me to have compassion for myself. Others may not need the diagnosis to feel that way, but I did. It allowed me to understand, ‘okay, this is why I am the way I am. I don’t have to berate myself for these areas I feel like I’m falling down’. “In fact, maybe I can learn to ask for help or focus more on the things I am good at. I don’t think it’s a coincidence that the year I was diagnosed was also the first year I received a top rating in my annual performance review at KPMG, and I got that rating ever since,” he says. “I had dropped my own negative coping strategies and started playing to my strengths. I had also started opening up to people about my diagnosis. “The feedback I was getting was pretty much entirely positive, and I count myself lucky for that. At the same time, I could see that awareness of neurodiversity in Irish workplaces simply wasn’t there yet and I wanted to do something to change that.” Neurodiversity awareness and training In addition to executive coaching for individuals and teams, Braver offers a range of neurodiversity awareness and training services for organisations, teams and individuals. “When I go into an organisation for a neurodiversity awareness session, I bring them through some of the traits of various neurodivergences, but also their strengths,” Scully explains. “I then go through some useful, high-level dos and don’ts everyone in the organisation can take away with them. I also deliver a more in-depth neuro-inclusion management training workshops for HR, people managers and leaders. As Scully sees it, neurodiversity is “just a way of saying we all have different ways of thinking and experiencing the world. “For some people, these different ways of experiencing the world have been medically pathologised as autism, ADHD, dyslexia or dyspraxia, for example,” he says. “All have been framed purely in a deficit-based manner historically. However, we can adopt a different lens and view them simply as ‘difference’. For people like me who are neurodivergent, viewing our experience as a difference rather than a deficit can change our entire outlook. “When I was first diagnosed, I thought, ‘I can’t be autistic’. I had preconceptions of what autism looked like, and it looked nothing like me, so I was taken aback. “Once I looked into it further, however, I realised those autistic traits had always been there, and I was drained from masking them. I came to terms with it and I was kinder to myself and learned to adopt ways of working that suited me and changed my environment. “I knew I wasn’t going to be good for two intense meetings in one day, for example, so I learned to move those things around to expend my energy more wisely. “I learned that I needed a lot of certainty when it came to communication, expectations and timelines, so I was very clear with my bosses and team about this and requested communication in a way that would leave nothing ambiguous.” Implementing these different ways of communicating and introducing clear boundaries around expectations allowed Scully to work more effectively. “At this point, I hadn’t told them I was autistic. They just accepted I was trying out a new way of working. It was really just good people management on everyone’s part, and it made a massive difference to my ability to perform.” Benefits for all employees Above all, Scully says he wants his work with Braver to make employers in Ireland realise that a neuro-inclusive workplace doesn’t just benefit neurodivergent employees, it benefits everyone. Scully sees neurodiversity training as “just one step” towards a more inclusive and adaptable management framework for all employees. “We spend so long training people to be subject matter experts, but I don’t think we dedicate enough time to training them how to be effective managers,” he says. “Learning to be a neuro-inclusive manager and leader is all about communication and adaptation – handling sensitive conversations and approaching adjustments to ways of working or communication that best suit the individual, for example. “When you’re training your managers to be neuro-inclusive, they will be better managers to all staff, not just those who are neurodivergent.” First steps for employers For employers considering neurodiversity for the first time, it can be overwhelming. There are many organisational and environmental aspects to be considered, such as removing barriers to the recruitment process, workplace accessibility and the adequacy of policies and procedures. “I believe there are many employers out there who want to make their workplaces more neuro-inclusive but don’t know where to start. I want to help and Braver is my way of doing so,” he says. Scully says a good first step is simply letting your people know you want to have a conversation about how you can be more inclusive. “Make neurodiversity a topic of conversation and create a space where your employees, particularly your neurodivergent employees, feel safe to participate in that conversation,” he advises. “As part of this, train your people on how they can exercise inclusive management so that both the manager and the employee feel safe and confident to approach different ways of working that suit that individual. “It’s a small step, but such an important one, and you will be on your way to supporting greater inclusion in your workforce and realising the benefits.”

Three Chartered Accountants consider the Government support on offer to SMEs in the North and south and the wider environment for entrepreneurship on the island of Ireland Shaun McGlade Managing Director SMCG Ltd Homegrown businesses in Ireland, North and south, face a myriad of challenges. These include geopolitical, environmental and economic uncertainties in addition to the impact of digital disruption, skills shortages and the evolving needs of the workforce – and all while they continue to grapple with inflationary pressures.  Government-backed organisations such as Invest Northern Ireland and Enterprise Ireland provide valuable support to businesses, with a focus on export-oriented companies and high-potential start-ups, both of which are seen as vehicles to boost the economy of the island of Ireland. Businesses across Ireland have been navigating the post-Brexit landscape, while businesses in Northern Ireland are also dealing with challenges and opportunities presented by the Northern Ireland Protocol – now the Windsor Framework – which provides access to both the British and EU markets.  This represents a significant opportunity for businesses in Northern Ireland, but it also introduces complexity and uncertainty in completing transactions across borders.  One key strand of Government support for businesses in Northern Ireland has been the establishment of the Trader Support Service. This is aimed at helping companies to contend with changes in the way goods move under the Windsor Framework.  Thousands of businesses have registered with the free-to-use platform since its launch in 2020. This service is due to end after December 2024, however, and this is something the recently restored Northern Ireland Executive must lobby the British Government to retain so that businesses in Northern Ireland can continue to avail of it beyond the end of the year. As a relatively small practice, we at SMCG Ltd have found that the professional network built over time with colleagues in the profession, along with professionals in other industries, has been a source of great support.  This is reflective of the ethos and culture prevalent in Irish society down through the generations to “help your neighbour” even though they may also be a competitor.  It is even more imperative, therefore, that the governments in the North and south proactively address the challenges facing our community of SMEs on the island of Ireland.  This requires a strategic approach, avoiding reactionary politics, and fostering an environment that encourages business investment and provides critical infrastructure for homegrown businesses to flourish. Susan HayesCulleton Managing Director The HayesCulleton Group Our company started in September 2010 and in the years since, I believe Ireland has steadily improved as a place to do business. The entrepreneurial ecosystem has become far more inclusive. In the past, the broad supports offered by the Local Enterprise Offices (LEOs) were tailored towards internationally traded services and manufacturing, but this has changed drastically.  The Local Enterprise Offices Policy Statement 2024–2030, released in May, stated that the LEOs would have an increased capital budget of €44.8 million in 2024 available to 37,000 businesses, excluding those supported by IDA, Enterprise Ireland and Udarás na Gaeltachta. Further, we are now seeing far more trade missions, funded initiatives for environmental and social sustainability, and opportunities to build relationships across borders.  At the time of writing, Enterprise Europe Network has 5,659 available partnering opportunities, enabling us to partner with distributors and procure goods from around the world.  InterTradeIreland has a target to help 10,000 businesses every year with comprehensive online cross-border trade information. The expanding diplomatic footprint of the Department of Foreign Affairs – with 57 Embassies and 108 Consulates – also offers a landing pad for Irish businesses that want to export. While Ireland is perhaps better known for accommodating foreign direct investment, I think the ecosystem for homegrown businesses here is hugely supportive. Enterprise Ireland does a fantastic job in the provision of seed investment, advice and – in my experience – has a passionate team of people at home and abroad who take as much pleasure in seeing homegrown businesses win in international markets, as the business founders themselves.  At HayesCulleton, we have encountered some wonderful people and they have led us to engagement opportunities that have resulted in new business for our firm. If I were to make one change, however, it would be to making it easier to navigate the SME support system in Ireland.  Kealan Lennon Chief Executive CleverCards Ireland has tax incentives to drive investment in research and development and well-educated talent coming out of our universities and colleges.      The big challenge for homegrown business support in Ireland is not at the early seed stage, however, but at the scaling stage – particularly for ambitious founders with a global vision.  The number one challenge for businesses scaling up is access to capital. The Government and Enterprise Ireland have funded several venture capital funds in Ireland to deploy investment at the seed and Series A stages. There is a complete gap from the Series B stage and onwards, however, and this has been the case for years.  Bridging this gap, in my view, would be the difference between scaling companies “exiting” through acquisition by international players (in the absence of capital to scale further) and continuing further along the journey themselves to build global businesses that are “homegrown” in Ireland.  CleverCards has developed a digital payments platform that enables businesses and public sector organisations to configure digital Mastercard accounts themselves.  By serving many multinational companies headquartered in Ireland, the US is our nearest market to the west while Britain and the European Union represent a huge market to the east.  So, our experience is that Ireland is a great place from which to scale internationally. However, early-stage growth and expansion requires risk capital to bridge the gap where later-stage private equity and debt markets are more readily available.

The Institute’s latest thought leadership papers outline a series of measures needed to support Ireland’s SMEs, write Cróna Clohisey and Michael Diviney. The Institute has published the latest in its series of thought leadership papers. Supporting SMEs was informed by the views of our 33,000 members and sets out the measures that we believe are needed to achieve strategic, systemic improvements for SMEs operating across Ireland. SMEs make up the vast majority of all businesses in Ireland, and collectively they employ close to seven out of 10 people working in the business economy. It is clear from engagement with members that a critical marker of Ireland’s future economic success will be supporting our SME sector by reducing the cost and complexity of doing business. SMEs have faced an unprecedented number of new legislative requirements in recent months which significantly adds to their cost and administrative burden. In 2024 alone, the minimum wage has increased by 12 percent and additional sick leave entitlements have added one percent to payroll costs. From 1 October, the rate of Employer, Self-Employed and Employee PRSI will increase by 0.1 percent, while pensions auto-enrolment will add a further 1.5 percent in costs during 2025. Supporting SMEs calls on the Government to be cognisant of the challenges all of the above brings. While the measures are extremely important for employees, consideration must be given to the timing of implementing new employment law, and the impact on SMEs when all are introduced within a short timeframe. The paper sets out a series of proposals, grouped under four headings: Resilience and growth; Government supports and funding; Sources of business finance; and Reducing the cost of business through the tax system. Alleviating the administrative and cost burden for SMEs is at the forefront of our asks which include the following proposals: Minimum wage workers, working a full week, should be exempted from Employers’ PRSI. Tax discrimination against professional service companies must end so that they can benefit from the various investment reliefs available to comparable trading companies. Reducing Capital Gains Tax from 33 percent to 25 percent to stimulate business and personal transactions that will bring additional funds into the Exchequer. The real time reporting requirement for enhanced reporting requirements (ERR) for employers should be removed and replaced with monthly or even annual returns. Additionally, we ask for a commitment from Government not to extend ERR for at least three years until the system is embedded and an appropriate cost-benefit analysis of the current system has been properly completed. Chartered Accountants Ireland believes that more resilient businesses will be better positioned to weather crises and uncertainty, and have confidence to invest, to scale, and to create employment. Financial stability is paramount to this. The Institute is calling on Government to support SMEs in accessing finance, optimising governance structures, and investing in developing their workforces. Proposed measures to ensure resilience and the continued growth of this vital sector of the economy include: Widening the eligibility criteria for the broad range of grants available to include more ‘traditional’ industries and the service sector. Ensuring more consistent availability of grants and supports nationwide. Our members tell us that services provided in one part of the country may not be available to similar businesses elsewhere; much depends on the approach and funding at a local level. With the advent of remote working, a common approach to supporting all small businesses, regardless of location, is needed. Promoting healthy competition in the business lending market, by enhancing the role community-based lenders and alternative lenders can play in addition to the pillar banks. It is well documented that record corporation tax receipts will not always be with us and there is a strategic imperative to ensure long-term economic health for SMEs. This can only come from understanding the unique challenges facing them, not simply by virtue of their size, but also specific to the sector they operate in, and supports they need. CCAB-I’s Pre-Budget 2025 submission focuses on supporting and sustaining our SME sector Continuing the focus on the importance of the SME contribution to the Irish economy, the Institute, under the auspices of the CCAB-I, delivered its pre-Budget 2025 submission to Minister McGrath last month. The paper highlights the constraints experienced by SMEs as a result of increasing labour costs and also states that a lack of supply of housing and childcare places, in addition to high personal tax rates, are making it increasingly difficult for people to live and work affordably in Ireland. The submission identifies four key areas for budgetary focus: support SMEs by exempting minimum wage workers from employers’ PRSI and simplifying tax legislation; increase the number of childcare places available and offer working parents a €1,000 tax credit to return to the workforce; introduce a 30 percent intermediate rate of income tax to retain and attract workers and help people live affordably; continue to stimulate and support the completion of new houses. The CCAB-I believes that Ireland’s tax code has become increasingly complex in recent years and is calling for simplification of the tax rules to support businesses, enable them to grow and also ensure that Ireland remains competitive on an international stage. Childcare provision In terms of childcare, the submission includes measures to improve the supply of childcare places for pre-school children. To address the impact of working parents leaving the workforce following the birth of their children on the labour supply, the CCAB-I is calling for the introduction of a €1,000 tax credit for working parents to encourage them to return to the workforce. The CCAB-I also asks that the government plans for adequate capacity in the childcare sector by analysing local needs and ensuring adequate funding for the sector. Income tax reforms The CCAB-I believes that introducing a third rate of income tax of 30 percent would make the system more equitable. Workers in Ireland pay income tax at a rate of 40 percent once they earn €42,000. This entry point is below the average wage and is significantly lower than most countries across the UK and Europe, where incidentally having more than two tax rates is extremely common. We are a mobile profession where many are in the early stages of their careers and are planning their futures. Introducing an intermediate 30 percent rate would make the system more attractive and more equitable, lessening the tax burden on workers and putting more money in their pockets. Housing measures The submission proposes: extending the Help-to-Buy Scheme by two years to 31 December 2027; abolishing vacant homes tax; increasing the rent-a-room relief from €14,000 to €20,000 and removing the cliff-edge; abolishing the non-resident landlord withholding tax system. Cróna Clohisey is Acting Director of Advocacy and Voice at Chartered Accountants Ireland Michael Diviney is Head of Thought Leadership at Chartered Accountants Ireland.

Julia Rowan answers your management, leadership and team development questions Q. I am head of function in a large organisation. My career has gone well, and I’ve been recognised and promoted several times. I am a quiet person who puts the head down and works hard – as does my team. However, I have a new boss. He came in with a lot of fanfare and even made a presentation about the way he likes to do things. He recently told me that he doesn’t think I drive my part of the business enough. I feel I drive my team hard – but I don’t shout about it. A. This could be a personal style issue. He comes in with fanfare and clearly communicates how he likes to do things. He could be overlooking you because his style is different and time might help him see your value.  But it might also be time to recognise that as we rise in organisations, sometimes new skills need to come to the fore.  There are a couple of things you can do: Wait and see: As your manager gets to know you and the work you do, their concern about how you lead your team may abate. Talk to your manager: Say “I want to have a conversation about how we work together. You’ve probably noticed that I’m a quiet person, so what kind of information and communication do you want about the work that I do?”   Show them otherwise: Send a short email at the end of every week or fortnight sharing three successes (e.g. projects completed/moved on), and three priorities for next week. This will create a sense of momentum and a record of progress and achievement over the year. However, this could be a useful time to look at the skills that senior leaders need to develop.  Your current approach has served you well up to now. But does the organisation need a bit more? How would your stakeholders (your team, the teams you serve, your peers, etc.) benefit if you shared what you did more broadly? Not just sharing what you do, but the value add: what you have learned, the insights, information and support you can offer to stakeholders. The scope and focus of how we communicate naturally changes as we rise through organisations, reflecting what is needed from us at our level: the connection between the work of our team/function and the organisation’s strategic vision, the complexity of the decisions we make in a fast changing environment, the risks we need to mitigate and manage, and how we develop talent and ensure smooth succession. The temptation is to fall into the binary of “I can either be true to my natural style OR give my manager what he wants”. The trick is to see beyond that and to find a way to showcase your work from that quiet and hard-working place you inhabit.  I wonder what would happen if you discussed this with your team: my guess is that they would have a ton of ideas.

Ireland’s economic reliance on foreign multinationals is stark, posing significant risks for our future stability, writes Cormac Lucey. The Revenue Commissioners recently published the report, Corporation Tax: 2023 Payments and 2022 Returns. Despite its relatively innocuous title, however, the information contained in this report has critical implications for the Irish economy and Ireland’s public finances. It has long been known that the multinational corporation (MNC) sector pays a disproportionate share of corporation tax in Ireland and this new report from Revenue confirms it. When it comes to corporation tax, the foreign MNC sector paid 87 percent of all corporation tax in Ireland in 2022. What is startling is the extent of MNC contribution compared to our two other major tax sources: income tax and value added tax (VAT). According to a 2022 report by IDA Ireland, there are a total of 301,475 people working for foreign multinationals in the country. That year, there were 2,121,300 working across the entire economy, according to the Central Statistics Office (CSO). Hence, just 14.2 percent of the workforce was employed by the MNC sector at that time. Yet, thanks to the highly progressive nature of our income tax system and the much higher wages paid by our MNC sector, that cohort paid 54.6 percent of total income tax. The cherry on the cake is that, according to Revenue, the MNC sector also accounted for more than half of all VAT payments (53.8%). When you examine all of Ireland’s varying tax heads and apply these percentages to the expected actual 2023 tax take (as set out in the Budget 2024 documentation), it emerges that the MNC sector contributed 55 percent of Ireland’s total tax revenues that year – even if we assume that it did not contribute at all to customs, excise duty, capital gains tax, capital acquisitions tax, stamp duty or motor tax. If we make the more realistic assumption that the MNC contribution to those other tax heads was the same as its contribution to VAT, the MNC contribution to the state’s total tax take rises to a staggering 62 percent. There are two slow-motion dangers facing our MNC sector. The first is that our native incapacity drives away mobile international investment. We are already bursting at the seams in terms of the supply of housing (we can’t build enough), skilled personnel (we don’t have enough) and electricity (we’re at risk of not having enough). The second danger is that the US takes action to seize the eggs that our MNC golden goose has been laying for us by legislating for a global minimum rate of corporation tax on the worldwide earnings of all US multinationals at its current corporate tax rate of 21 percent. MNCs might save tax by paying 15 percent in Ireland only to face a six percent surcharge in the US. This measure would undermine any tax rationale for locating in Ireland and reduce our attractiveness as an investment destination. If we are at risk of having maxed out our extraction of eggs from the MNC golden goose, how stands our indigenous sector of Irish-owned operations? A recent report, published jointly by the Nevin Economic Research Institute (NERI) and trade union SIPTU, revisited the CSO analysis and concluded that the average value-added per hour of indigenous sector workers was just €28. This report shows sectoral productivity in the Republic compared to that in Northern Ireland. Apart from sectors dominated by MNC activity, productivity levels in the south lag those in the North, sometimes quite markedly. In the construction sector in the south, for example, productivity is less than half that north of the border. However unpalatable a conclusion, the economic rise of the Republic seems entirely down to foreign multinationals and appears to owe little to native endeavour. Disclaimer: The views expressed in this column published in the June/July 2024 issue of Accountancy Ireland are the author’s own. The views of contributors to Accountancy Ireland may differ from official Institute policies and do not reflect the views of Chartered Accountants Ireland, its Council, its committees, or the editor. Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland.