Recognising the continuing vital importance of farming across Ireland, a number of agricultural reliefs which were due to cease at the end of 2023 have been extended, including the scheme for accelerated capital allowances on farm safety equipment. The Minister also increased the maximum aggregate lifetime limit of a number of farm-related reliefs to the maximum allowable under the new EU Agricultural Block Exemption Regulation. The VAT flat rate for unregistered farmers is also being reduced. Consanguinity relief (stamp duty) This relief is being extended for a further five years to 31 December 2028. The relief reduces the rate of stamp duty applicable to intra-familial transfers of farmland from 7.5 percent to 1 percent. The Government also published “Review of Consanguinity Relief (2023)” which makes a number of recommendations in relation to the relief, including the five year extension which is to be implemented. Accelerated capital allowances on farm safety equipment This scheme, which provides for accelerated capital allowances of 50 percent per annum in respect of  eligible equipment, and which was due to end on 31 December 2023, is being extended for three years to 31 December 2026. The expenditure must be certified by the Minister for Agriculture, Food and the Marine. Once certified, the expenditure can be written off at a rate of 50 percent per annum over two years rather than at the normal rate of 12.5 percent over eight years. Reliefs for Young Trained Farmers and Succession Farm Partnerships Stock relief for young, trained farmers, relief for succession farm partnerships and young trained farmers stamp duty relief are all being amended to increase the aggregate lifetime amount of relief available to a person under these reliefs from €70,000 to €100,000 from 1 January 2024. Stock Relief (Registered Farm Partnerships) Stock relief for registered farm partnerships is being amended to increase the threshold from €15,000 to €20,000 in the case of qualifying periods commencing on or after 1 January 2024. Flat-rate VAT compensation percentage The Minister announced that the flat-rate compensation percentage of VAT for farmers will be reduced to 4.8 percent (a reduction of 0.2 percent) from 1 January 2024. This scheme compensates unregistered farmers on an overall basis for VAT incurred on their farming inputs. According to the Budget publications, the decrease is based on macro-economic data received for the period 2021-2023.

The main measures announced were the now usual annual Budgetary increases in excise duty for tobacco products, and an extension to the current excise reductions for fuel. There were no increases in alcohol duty. Fuel excise The Minister deferred the final tranche of the various fuel duty excise increases which will now take place in two equal instalments, with the first taking place on 1 April 2024. Therefore the temporary excise rate reductions which apply to diesel, petrol and marked gas oil, and which were due to expire on 31 October 2023, are being extended. 4 cents, 3 cents and 1.7 cents will be added to petrol, diesel and marked gas oil respectively on both 1 April 2024 and 1 August 2024. Tobacco excise Excise duty on tobacco products is being increased by 75 cents, inclusive of VAT, on a pack of 20 cigarettes in the most popular price category. Pro rata increases will apply to other tobacco products. According to the Budget 2024 Financial Resolutions, this change will take effect from midnight tonight. E-cigarettes and vaping   In the context of public health interests, delays to the revision of the EU’s Tobacco Products Tax Directive and the Government’s commitment to tax e-cigarettes and vaping products, the Minister is proposing to introduce a domestic tax on these products in next year’s Budget. According to the Minister, this will involve considerable preparatory work by both the Department for Finance and the Revenue Commissioners in drafting this legislation.

The Minister announced a one-year extension to the reduced VAT rates for gas and electricity, increases in the VAT registration thresholds for both goods and services, and the zero-rating of audiobooks, ebooks, and solar panels for schools. For the hospitality sector, the 13.5 percent VAT rate, which recommenced from 1 September 2023, remains unchanged. The Revenue Commissioners will shortly launch a public consultation examining how digital advances can be used to modernise Ireland’s VAT invoicing and reporting system. Gas and electricity The 9 percent VAT rate for gas and electricity (normally 13.5 percent), which was originally due to end on 31 October 2023, is being extended for an additional 12 months until 31 October 2024. The 9 percent reduced rate first took effect from 1 May 2022. The extension is expected to cost €315 million in 2024. VAT registration thresholds From 1 January 2024, the current VAT registration thresholds are being increased from €37,500 to €40,000 for services, and from €75,000 to €80,000 for goods. According to the Minister’s speech, although the increases are modest, they are targeted at small businesses whose turnover is close to the current thresholds. The increases aim to bring the thresholds broadly in line with forthcoming EU VAT registration thresholds. Audiobooks, ebooks, and solar panels for schools From 1 January 2024, the VAT rate for audiobooks and ebooks will be reduced from 9 percent to zero percent (to bring the rate in line with paper books), at a full year cost of €3 million, according to the Budget 2024 publications. From the same date, the VAT rate for the supply and installation of solar panels installed in schools will also be reduced to zero percent. Charities VAT compensation scheme From 1 January 2024, the total annual capped fund for the Charities VAT compensation scheme is being increased from €5 million to €10 million. The scheme aims to reduce the VAT burden on charities and partially compensate for VAT paid by the charity and applies to VAT paid on expenditure from 1 January 2018.

Measures to further the transition to an ever “greener” economy were also announced. While not a tax related measure, perhaps the most welcome announcement on the climate front is the establishment of the Infrastructure, Climate and Nature Fund. The fund is a response, in the words of the Minister, to “the devastating impact of climate change on communities across the globe”. Microgeneration of electricity Microgeneration of electricity is the small-scale production of electricity by consumers in their own homes. Where excess electricity is produced, this can be sold back to the grid. There is a tax exemption from income tax, USC and PRSI where this energy is produced from renewable, sustainable or alternative sources of energy. The Minister announced an increase in this exemption from €200 to €400. Relief for battery electric vehicles The relief from benefit-in-kind on electric vehicles (EVs) was subject to a tapering of relief in recent Finance Acts. The Minister announced a deferral of this tapering until 2026 with the deduction of €35,000 applying until the end of 2025, €20,000 in 2026 and €10,000 in 2027. In our Pre-Budget 2024 Submission, we called on the Government to introduce measures to stimulate the uptake of EVs by Irish consumers. The VRT relief for battery EVs is being extended for a further two years to the end of 2025. This applies to EVs valued up to €50,000. Carbon tax As expected, carbon tax is set to increase again, in line with commitments to raise the rate of carbon tax to €100 per tonne of carbon dioxide emitted by 2030, as per the trajectory set out in Finance Act 2020. From 11 October 2023, the rate per tonne of carbon dioxide emitted for auto diesel and petrol will increase from €48.50 to €56.00. This increase will apply to all other fuels from 1 May 2024.

This year, key measures for businesses operating in Ireland were announced. The increase in the R&D tax credit to 30 percent as well as a scheme of business supports worth €250 million (of which more detail is to be provided) were welcome. While it may seem like Minister McGrath has made limited announcements on the corporation tax front, legislation implementing the monumental Pillar Two rules will be included in Finance (No. 2) Bill 2023 and will be wide-ranging and complex and will be the most significant changes to Irish tax legislation in the history of the State. Minister McGrath also reaffirmed the Government’s commitment to introducing a participation exemption for foreign sourced dividends. This is part of a territorial system of taxation which the Institute has been calling for in successive Pre-Budget Submissions. This commitment will be most welcomed by Irish businesses. Research and Development (R&D) Tax Credit The R&D Tax Credit remains one of the most successful tax expenditures in Ireland. In 2021, 1,629 companies claimed an R&D Tax Credit totalling €753 million. The R&D Tax Credit is calculated as a percentage of qualifying expenditure. In his speech, Minister McGrath announced an increase in the rate from 25 percent to 30 percent. In addition, there is a payment limit on the amount which can be paid to a claimant in the initial year of a claim. The Minister announced an increase in this threshold from €25,000 to €50,000. In our response to a Government consultation on the R&D Tax Credit in 2022, we recommended the acceleration of the payment of tax credits. We also recommended that the Government activate measures to introduce a 30 percent rate for the credit. Accelerated Capital Allowances – Energy Efficient Equipment The Accelerated Capital Allowances (ACA) scheme for Energy Efficient Equipment (EEE) is being extended for a further two years to 31 December 2025. In our Pre-Budget 2024 Submission, we recommended extending this measure as it is a particularly useful measure in encouraging businesses to choose EEE, where possible. ACAs are net neutral in terms of overall cost to the Exchequer. Section 481 Film Relief Film relief provides for a corporation tax credit for the qualifying costs of certain audiovisual productions. The cap on qualifying expenditure is being increased to €125 million. Employment Investment Incentive (EII) The EII scheme provides for income tax relief for investment in qualifying small and medium sized businesses.  From 1 January 2024, all investments made will be subject to a four-year holding requirement and the limits on investments which qualify for relief is to increase to €500,000. In our Pre-Budget 2024 Submission, we noted that amendments to the EU General Block Exemption Regulation require further updates to the EII scheme. Minister McGrath announced that the necessary amendments will be included in the Finance Bill, once published. Key Employee Engagement Programme (KEEP) The Minister announced that State-Aid approval has been received for the 2022 amendments to the KEEP scheme. The amendments include the extension of the scheme to the end of 2025 and a doubling of limit for the total market value of issued but unexercised qualifying share options from €3 million to €6 million.

Looking beyond headline corporation tax receipts to the health of the corporate sector is key Budget 2024 is a first step towards meaningful support for entrepreneurs Use of tax policy as a lever to encourage landlords to remain in rental market will work for society and the economy   High time for childcare to be recognised as part of critical infrastructure     10 October 2023 – Reacting to today’s Budget speeches, Chartered Accountants Ireland has highlighted the importance of supporting enterprise across the country. The Institute represents over 32,700 members, two-thirds of whom work in business.   Supporting enterprise   Director of Public Affairs, Dr Brian Keegan commented  “A healthy corporate sector is critical to Ireland’s economic growth. Without it, the state simply doesn’t have the tax receipts to effect change across so many areas of the economy and society.    “It’s positive to see the focus switching away from the headline corporation tax receipts and the enterprise sector being singled out and supported. These businesses create significant local employment and deserve the support announced today of a €250 million fund to help meet the increased cost of doing business in 2024.   “We hope that the scheme is introduced in a timely manner as businesses are already grappling with additional costs of statutory sick pay, impending pension auto-enrolment and a significant uplift in the minimum wage to €12.70.”  Supporting entrepreneurism   The Institute has also noted the uplift in the R&D credit from 25% to 30% as well as an enhanced capital gains tax relief for angel investors. It states that these measures send the signal that Ireland is open for business and wants to support entrepreneurism.  Dr Keegan continued  “The R&D tax credit has been hugely successful in encouraging research and innovation and creating employment. New capital gains tax reliefs for angel investors should result in early funding being made available to businesses when they need it most – at inception. There have been few new initiatives for the corporate sector in the past decade, and it was positive today to see recognition of the sector to Ireland’s economy.”   Tackling housing  The lack of adequate, affordable, reasonably located housing for staff is one of the biggest barriers to expansion reported by Chartered Accountants Ireland members. The Institute said that today’s tax break of €600, rising to €1,000 over three years, announced for small, private landlords if they remain in the rental market will help to boost Ireland’s housing supply. Cróna Clohisey, Tax and Public Policy Lead said  “Small landlords are an essential feature of a fully functioning residential property market, and properties owned by these landlords are more likely to be in regional, less densely populated parts of the country, providing much needed rental stock in areas that are not as attractive to institutional investors.  “Today’s announcement for landlords will help stabilise the rental market and give more certainty to tenants but also importantly make it more attractive for a small private landlord to enter the rental market. Combined with an increased rental tax credit, the measures will go some ways to helping people access housing, and it will work for society and the economy.”  Childcare as a critical infrastructure issue   Today’s announcement of an increase in the national childcare subsidy (NCS) from €1.40 to €2.14 as well as extending the NCS to certain childminders will help with the cost of childcare but will not address significant capacity constraints within the market.   Clohisey continued  “The cost of childcare is unaffordable for many working parents and today’s announcement to increase the NCS from September 2024 is welcome. However, a survey of our membership last month shows that in addition to cost, the biggest challenge working parents face is a lack of available childcare places.      “While a commitment was made today to address supply issues through core funding, we are asking government to recognise that childcare provision is part of the critical infrastructure necessary for a functioning economy. The crisis needs to be addressed with a long-term strategy with children at the forefront, that adequately funds the sector, increases capacity, and supports working parents.”    ENDS      

Last week the Institute met with HMRC’s VAT policy team to discuss in detail feedback received from our members and their clients that the 31 October 2023 deadline for selling second-hand cars bought from Great Britain and moved to Northern Ireland before 1 May 2023 should be extended. Under the current rules, such vehicles will not be able to use the VAT margin scheme if these vehicles are sold after 31 October 2023 meaning VAT must be charged on the full selling price. HMRC’s current view is that 31 October 2023 is still the deadline and dealers should make all attempts to sell these vehicles before that date. The Institute pressed HMRC to consider an extension and also said that if an extension is granted, this decision should be made and announced as soon as possible.  If your car dealer client has not yet sent in supporting evidence to demonstrate the ongoing difficulties being experienced in selling these vehicles, HMRC is still willing to accept such evidence which can be emailed to the Institute. We would recommend that this is done as soon as possible. By way of reminder, the information requested by HMRC is details or estimates in respect of the following:- The numbers of second-hand vehicles dealers in Northern Ireland had in stock on 1 May 2023 that were sourced from Great Britain;  How many of these remain unsold at present, and their estimated value;   How many are likely to be unsold on 31 October 2023, and their estimated value; and   If there is any category of vehicle that may be particularly affected by having a cut-off date of 31 October 2023 after which the margin scheme could no longer be used.   The Institute wishes to thank those members and their clients who have already provided information to support the need for an extension.   

At the end of September, the UK government published additional draft legislation which contains further amendments to the UK’s Pillar 2 draft legislation. Representations on the amended draft legislation, including the additional updates (summarised below), should be made by 25 October 2023. It is also confirmed that officials are reviewing comments already received, which do not need to be resubmitted.  According to an email from HM Treasury, the amended draft legislation reflects stakeholder observations on the draft Finance Act and July 2023 L-Day publication on this draft legislation, in addition to the OECD administrative guidance released in February and July 2023. This includes amendments in respect of the following areas:-   Currency conversion rules;  Tax credits;   Substance-based Income Exclusion;   Qualified Domestic Minimum Top-up Tax (“QDMTT”); and   QDMTT and Transitional UPTR (Under Taxed Profits Rule) Safe Harbours. 

This week we bring you news about a pragmatic approach being taken by HMRC to enquiries into off-payroll working compliance and action is needed by certificate of tax deposit holders by 23 November 2023. A new interactive guidance HMRC tool is available to establish if national insurance contributions must be paid whilst working abroad and HMRC has published guidance in its International Exchange of Information manual on the new mandatory disclosure rules which took effect from 28 March 2023. Updated guidance has also been published in HMRC’s Employment Income manual on issues in relation to electric vehicles which confirms that no taxable benefit in kind arises if an employer reimburses the employee for the cost of charging a company-owned electric car. And finally, in a recent meeting of HMRC’s VAT Registration forum, which the Institute participates in, it was announced that from mid-November 2023, HMRC will no longer be providing paper VAT registration forms on GOV.UK. This will only be available on request from the VAT helpline (more information on this will be provided in due course).  Off-payroll working enquiries  We are aware that HMRC are currently taking a pragmatic approach to enquiries into the off payroll working rules by offering deemed employers the opportunity to pause any settlement, as currently this legislation does not allow for offset of any taxes already paid by the contractor or their personal service company. This is because HMRC has been consulting on legislation which may allow a limited set-off for these taxes.   However, it is not currently guaranteed that this legislation will be introduced. The ability to pause any settlement is subject to certain conditions, which are set out in a letter to deemed employers from HMRC.  Certificate of Tax Deposit holders 23 November 2023 deadline  The deadline for using Certificates of Tax Deposit is 23 November 2023. The Certificate of Tax Deposit Scheme allowed you to deposit money with HMRC and use it later to pay certain tax liabilities. The date that you bought your certificate is known as the effective date of payment.   On 22 November 2017, HM Treasury gave notice of the scheme’s closure. This means the Certificate of Tax Deposit scheme closed for new purchases from that date. HMRC will continue to honour existing certificates until 23 November 2023.  HMRC recommends holders to contact the Certificate of Tax Deposit team before the scheme closes to tell HMRC how you want to use your certificate. If you think you will still have any certificates after 23 November 2023, you should contact the team as soon as you possible to arrange a refund.  After 23 November 2023 HMRC will try to repay the balance of any certificate which remains unpaid and unclaimed. If it is unable to (for example, because HMRC is unable to contact the current certificate holder after reasonable effort), HMRC will consider the balance as forfeited.  A detailed email has been sent to us by HMRC setting out this information, which you can read here. 

The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023 were published in July 2023. This Statutory Instrument brings into effect the OECD Model Reporting Rules for Digital Platforms which will require UK digital platform operators to report details of their sellers to HMRC from 1 January 2024.   The regulations set out, either directly or by reference to the requirements in the published OECD rules, the information which platforms will need to collect and verify, the actions they will be required to take and penalties for failing to comply with the requirements.     In advance of commencement, HMRC is expected to publish detailed guidance in its International Exchange of Information Manual. 

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The latest Trader Support Service bulletin is also available, and the Institute has developed a new graphic setting out the key milestones in the Windsor Framework (“WF”). Windsor Framework infographic  In the wake of the WF agreement, traders, and businesses across the island of Ireland need to be mindful of the various changes taking effect over the coming months and years as the provisions of the WF are gradually phased in.   To help navigate this landscape of new regulations, the Institute has prepared a high-level infographic which summarises the key dates and changes that traders need to be aware of in the short to medium term. As further developments arise, members will be kept up to date and informed in Chartered Accountants Tax News. As these changes bed down, contact us to share your feedback and any problem areas which arise which we can then share with UK Government officials.  Miscellaneous updated guidance etc.   The following updated guidance, and publications relevant to EU exit are available:-  Known error workarounds for the Customs Declaration Service (CDS);  Customs declaration completion requirements for Great Britain;  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service;  List of customs training providers;  Search the register of customs agents and fast parcel operators;  Internal temporary storage facilities (ITSFs) codes for Data Element 5/23 of the Customs Declaration Service;  External temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service;  4-digit to 3-digit procedure to additional procedure code correlation matrix for imports;  Appendix 1: DE 1/10: Requested and Previous Procedure Codes of the Customs Declaration Service (CDS);  Appendix 2: DE 1/11: Additional Procedure Codes of the Customs Declaration Service (CDS);  Attending an inland border facility; and  How to subscribe to the New Computerised Transit System. 

This month’s tidbits cover updated information on HMRC’s Governance arrangements and how HMRC resolves civil tax disputes. 

In a recent interview, Ioanna Mitroytanni (Deputy Head of the Company Taxation Initiatives unit in the EU’s Directorate-General for Taxation and Customs Union) and Ana Xavier (Head of Economic Analysis, Evaluation and Impact Support Unit) set out the vision behind the Business in Europe: Framework for Income Taxation (BEFIT) proposal. They explained that the proposals should assist not only large multinationals but also domestic businesses struggling to make the jump into cross-border sales in the EU. They are aiming to commence BEFIT applications from 1 July 2028, which in their view should allow sufficient time for multinationals to implement the Pillar Two legislation.

The OECD recently reached agreement on the Pillar Two “Subject to Tax Rule” (STTR). The STTR provides for the taxation of certain intra-group payments by developing countries at a rate below 9 percent. It enables the application of a tax where a country would be otherwise unable to under a relevant double tax agreement.

As the pace of change intensifies, changeability is becoming an increasingly important attribute for all organisations. David Codd explains how to get it right Change is a constant.  Many organisations are rethinking their purpose and adopting a more balanced outlook that recognises their environmental and societal impact.  Technology continues to change markets fundamentally, and now, artificial intelligence is changing how work is done.  Added to this, organisations are having to contend with changing geopolitical forces and events like Brexit and the war in Ukraine. Therefore, the most important attribute for ensuring your organisation’s long-term health is arguably its ability to sense what needs to change and successfully manage change repeatedly.  Here are my top tips on how to achieve an effective culture of changeability. Critical success factors There are four critical success factors that can guide boards and executive teams in shaping their organisation to be ‘fluent’ at change. Your organisation must be: aware; inclusive; aligned; and adept at change management. So why are these factors critical to success? What are the barriers that prevent organisations from being effective, and how can they be overcome? 1. Aware Awareness in this context relates to strategic sensitivity – being highly attentive to strategic developments both inside and outside the organisation.  An organisation requires a comprehensive view of the current and future landscape and a considered position on what that means. Otherwise, groupthink and complacency can creep in, and the organisation can stagnate.  Barriers can arise when teams are too busy (under too much day-to-day pressure) or too proud (already delivering success).  So, how do you get over these barriers? Through process and challenge.  A well-run and well-structured strategic planning process, with senior management and board input, supports quality thinking. By not prejudging the outcome, you normalise constructive questioning of the status quo and open minds. A strategic review needs to have a challenge built in. Some challenges can come from deep customer insight. 2. Inclusive Changeability is enabled by being as inclusive as possible. Inclusiveness can unlock your talent’s potential.  At the very least, colleagues have a right to expect that the rationale behind any intended change is clearly explained to them.  When done well, this can help you to achieve acceptance, but it still falls short of full ownership. The best results are built on strong buy-in secured through real participation.  In any organisation of scale, one barrier to inclusivity can be the inability to have everyone participate in every change decision – it’s not always feasible. In organisations of all sizes, varying degrees of confidentiality are usually necessary when change is planned or implemented, e.g. entering competitive markets, using acquisitive strategies, and making difficult cost-reduction decisions. To overcome these potential barriers, leaders should provide frequent, engaging progress updates to the whole workforce – both successes and challenges – not just titbits of good news. If using third parties to gather insights, partner relevant internal teams with them. Once the overall direction is set, involve colleagues in ideation for implementation in their own function.  Building trust is a two-way process. Staff engagement can be objectively measured, and the results and trends can be shared internally. Then colleagues know that their organisation is really listening. 3. Aligned The different components of an organisation need to be aligned for change to be successful. If vital components are misaligned, then change will be blocked or at least compromised. This is clear but not easy to achieve, especially in a big organisation.  Barriers here can arise when the vision underpinning change is not clearly articulated – it can be perceived as meaningless background noise. For reasons rooted in a lack of trust, you may find that teams pursue different agendas or adopt a wait-and-see stance. Similarly, individuals and teams often have understandably limited exposure beyond their own area and, therefore, cannot be expected to immediately align behind a general direction they can’t relate to.  Purpose, vision and strategy must be clear and expressed and fleshed out in ways that everyone can relate to.   4. Adept at managing change Change is disruptive and potentially destabilising, so effective implementation needs focus and skill. The barriers here can include the complexity of the project and a shortage of appropriate expertise. Portfolio management, run as a process with executive participation, can bridge strategy and the plan-of-action.  It facilitates good collective choices by prioritising proposed change initiatives versus strategic objectives, recognising that human and financial capital are scarce resources.  Similarly, while project managers can usually be contracted in, it can be difficult to free up internal people who have deep functional knowledge and enjoy projects.  Experienced programme and project managers (ideally with functional knowledge) are essential. A highly beneficial medium-term measure is to develop ‘hybrids’ – people who can work across functions and switch between operational and project management disciplines. This contributes to a higher project success rate and a faster pace. The changeability lens Regardless of whether your organisation is currently undergoing significant change, it can be helpful for leadership to apply a ‘changeability’ lens to the organisation as a whole.  Use the four critical success factors to take a view on the change capabilities, processes and culture that you will need and create an action plan to address the gaps. A thorough review can form the basis of an enduring strong change capability – the key to your organisation growing from strength to strength. David Codd is a Chartered Accountant and transformation specialist

In its Annual Review of Corporate Reporting 2022/2023, the FRC has reported findings from its monitoring activities along with its expectations for the coming year. Also included in the annual review were the most frequently raised issues identified by the FRC which includes impairment of assets, judgements & estimates, cash flow statements amongst other new and recurring themes. The report provides a useful insight for preparers and auditors of financial statements, investors and other users of corporate reports.

Unconscious bias can lead to discrimination and inequality in our lives and work. Dorcas Barry explains how we can avoid it Decision-making is part of being human. The choices we make, however small, impact our lives and work every day. In this hectic world, we can sometimes struggle to digest all the information coming at us at once. To cope with this, our brain naturally takes mental shortcuts to try to process this information more efficiently, sometimes with negative consequences. Many people are unaware of these shortcuts – also known as unconscious or implicit biases – which can lead us to discriminate against others without even realising it. Recognising and becoming aware of unconscious bias is essential to minimise its negative potential, and to create more inclusive and diverse environments.   Unconscious bias at work In the workplace, unconscious bias can contribute to discrimination and unequal treatment in many forms. It can influence hiring and promotional decisions, opportunities and pay. Examples of different types of unconscious bias that can arise at work include:   Perception bias: Overly simplistic stereotypes of groups of people. “All French people are rude,” for example.  Anchor bias: The first thing you learn about someone influences all subsequent thoughts about them. Affinity bias: Gravitating towards people we perceive as being similar to us.  Conformity bias: When we think and act in ways that are consistent with the people around us.   In a work environment where unconscious bias is prevalent, employees’ mental wellbeing can be negatively impacted. Unconscious bias can even lead to bullying, discrimination or harassment.  Feelings of alienation and the emotions associated with this have also been shown to lower employee productivity, engagement and satisfaction, increasing absenteeism and turnover.   Stereotypes and societal influence Stereotypes and the societal influences that create them play a significant role in unconscious bias. Stereotyping is defined as unconscious bias directed towards a specific social group, often in a negative or disparaging way.  While most people will assume they are not susceptible to biases and stereotypes, we cannot avoid engaging in them. This is down to our cognitive drive to create associations and generalisations.   Stereotypes are deeply ingrained in society and reflect our ability to establish mutually respectful relationships in all areas of life, including at work. Creating the potential to deconstruct preconceived societal models can help more people to flourish at work.   Understanding unconscious bias   Looking at the ways in which our thoughts and behaviours are influenced by unconscious bias requires understanding and awareness of the complex nature of how the brain processes information.   Here are three concepts to help you understand unconscious bias:   These biases operate without our conscious awareness and can often conflict with our conscious beliefs.  They are automatic mental shortcuts that influence the decisions we make and the experiences we have. Unconscious cognitive biases can manifest in many ways – affinity bias, groupthink or the halo effect, for example. There are over 150 different types of cognitive biases.   Improving self-awareness Unconscious bias influences our decision-making. At work, this can arise in hiring practices, social relationships and team interactions.   Here are some techniques you can use to help increase your awareness of your own personal biases.  Accept that everyone has biases and be willing to self-reflect honestly; this is an important first step.   Take the time to learn about different types of bias and those that you recognise in your own decision-making.   Question your assumptions, seek out different perspectives and challenge your thought processes about other people.   Use reminders to change biased-based thoughts and behaviours. This requires constant and deliberate effort, but it is vital for embedding more inclusive behaviours.   Tackling unconscious bias in organisations Employers and managers can also take steps to tackle unconscious bias and foster an inclusive culture by: Promoting diversity and inclusion throughout the organisation;   Increasing the representation of diverse groups;  Encouraging open dialogue about issues relating to unconscious biases; Encouraging empathy; and Auditing processes and procedures to remove any tendencies towards bias.   Promoting inclusivity Addressing unconscious bias at work creates the opportunity to move towards a more diverse and inclusive workplace.  As we all have biases – because of the way our brain works and our different and varying experiences in life – acceptance of this as a normal human trait is the first step to creating change. When we overcome biases by challenging them, we are far more likely to prevent them from affecting our decisions both at home and at work.   By acting and implementing strategies to address unconscious bias among their employees to create a more positive culture, organisations also have the power to foster a culture that is more accepting and inclusive of everyone.   Dorcas Barry is People Science Lead at Inclusio

A compulsory strike-off can have profound implications for a company and its directors. Ruairí Cosgrove explains how to avoid it Involuntary strike-offs are set to begin again in Ireland following a hiatus due to the pandemic. Up to 10,000 companies are at risk of being struck off the register for failure to file their annual returns and financial statements.  In 2020, the Irish Companies Registration Office (CRO) acted to ease the burden on companies struggling under pandemic pressures.  The CRO introduced extended filing deadlines, for example, along with a suspension of involuntary strike-offs for companies that had repeatedly failed to file their annual returns.  This gave companies an opportunity to bring their filing up to date in compliance with the Companies Act 2014. The Registrar has now indicated a return to usual practice.  While your company may have benefitted from the supportive measures put in place by the CRO during the pandemic, it’s crucial to understand that normal service is resuming, or your business may be at risk.   If your company is not fully compliant with the Companies Act 2014 in terms of certain obligations, it could be struck off. My advice is to review the reasons for strike-offs, listed below, and follow our action plan to make sure your business is either safeguarded or wound up properly.  Grounds for involuntary strike-off  If you want your company to stay in business, make sure you are not breaching any of the relevant rules. The CRO can strike a company off the register for any of the following reasons.  The company has failed to file an annual return – even if only for one year.  The company has failed to file Form 11F with Revenue.  The Registrar has reasonable cause to believe a company doesn’t have an EEA-resident director, a bond in place or a continuous economic link with the State.   The company is being wound up and the Registrar has reasonable cause to believe no liquidator has been appointed.   The Registrar has reasonable cause to believe the company’s affairs are fully wound up and the liquidator has not made the required returns for a period of six consecutive months.  No one is recorded in the CRO as acting as a current director of the company.  Consequences of involuntary strike-off A company being struck off is not a minor matter and can have prolonged implications for company directors. In fact, when a company is struck off involuntarily, it faces dire consequences.   It ceases to exist. Its protection of limited liability is lost. Its assets become the property of the State.  Directors of a company that has been involuntarily struck off can face disqualification. The Corporate Enforcement Authority can make an application to the High Court issuing an order to disqualify one or all the directors from acting as a director or being involved in the management of a company.  The length of disqualification would be a matter for the court to decide. So what are the steps your company should take now to ensure it is not struck off?  Avoiding involuntary strike-off If your annual return is late, avoid involuntary strike-off by taking immediate action to bring your annual return and financial statements filings up to date with the CRO. Handle disposals by the book. If your company has ceased trading, dispose of it through a voluntary strike-off or members’ voluntary liquidation. A director has a legal duty to dispose of a company properly – not doing so is a statutory offence.  Ruairí Cosgrove is a Director at PwC Ireland

Welcome to this edition of Technical Roundup. In recent developments, the European Commission has consulted on increasing the company size  threshold limits and IAASA has published the latest edition of its Standards Newsletter as well as its annual Observations Paper. Read more on these and other developments that may be of interest to members below. Financial Reporting Institute has responded to the International Accounting Standards Board’s (IASB) request for information relating to IFRS 9 Financial Instruments impairment requirements. Broadly speaking, the Institute believe that the impairment model in IFRS 9 is working as intended, but made some recommendations to the IASB in its response. EFRAG have also submitted a response to the same consultation. The Financial Reporting Council is welcoming applications for its Stakeholder Insight Group (SIG), a cross-stakeholder panel that represents preparers, investors and other key parts of our stakeholder universe including reporting framework owners and civil society groups.  The Financial Reporting Council have released FRED 84 Draft amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. This proposes to introduce new disclosure requirements to provide users of financial statements with additional information about an entity’s use of supplier finance arrangements and the effect of such arrangements on the entity’s financial position and cash flows. The Financial Reporting Council has issued a project update relating to the ongoing periodic review of FRS 102. In its update, the FRC provided details of the feedback received on areas such as Revenue Recognition and Leasing. It also noted that it expects to issue the final amendments in the first half of 2024, with the changes becoming effective for periods commencing on or after 1 January 2026. The IFRS Interpretations Committee have issued their September 2023 update which summarises the decisions reached in its public meetings. The International Accounting Standards Board (IASB) have released the September 2023 IFRS for SMEs Accounting Standard Update a joint FASB-IASB Update and a September podcast. The IFRS Foundation have also issued their September news summary. The IASB has announced that it has decided to explore targeted actions to improve the reporting of climate-related and other uncertainties in financial statements. This may result in the development of educational materials, illustrative examples and targeted amendments to the IFRS Accounting Standards to improve the application of existing requirements. The IASB has issued amendments to the IFRS for SMEs Accounting Standard which provides temporary relief from accounting for deferred taxes arising from the implementation of the Pillar Two model rules. This follows similar amendments made to IAS 12 and FRS 102. In his opening address at the World Standard-setters Conference 2023, Andreas Barckow celebrated 50 years since the formation of the International Accounting Standards Committee (IASC), the predecessor to the IASB. He acknowledged the benefits gained from the establishment of global financial reporting standards and the efficiency and transparency they bring to companies and investors. He also discussed some of the upcoming standards being worked on by the IASB as well as the important role that the IFRS Interpretations Committee plays. During the conference, a video marking 50 years of accounting standard-setting was released by the IASB. EFRAG are seeking comments on its draft endorsement advice on the lack of exchangeability amendments to IAS 21. Comments on the draft endorsement advice letter are requested by 7 December 2023. Separately, EFRAG have completed its due process regarding Supplier Finance Arrangements (IAS 7 and IFRS 7) amendments and have submitted its Endorsement Advice Letter to the EC. EFRAG has issued its September 2023 update. This informs stakeholders about due process publications, public technical decisions and decisions taken during the month. Audit IAASA has published the latest edition of its Standards Newsletter as well as its annual Observations Paper. Insolvency - recently ruled case The case of Gerard Murphy liquidator of Diamond Rock Developments Limited (in liquidation) and Joseph Leddin recently ruled on by the Irish Court of Appeal, reminds readers of the importance of   registration within the statutory time period, of a charge created by a company. Practitioners whose clients lend money secured by a charge on company assets must ensure, so that the charge is enforceable against a liquidator and any creditor of a company, that it is correctly registered in the companies’ registration office (CRO). The required particulars of the charge must be registered with the Registrar of Companies not later than 21 days after the charge’s creation. The case also noted that the statutory provisions concerning registration empower a court to grant an extension of time where it is ‘just and equitable ‘to do so. However, in this case the jurisdiction was not invoked before the company went into liquidation as the judge said presumably because an extension can only be granted where it would not prejudice the position of creditors or shareholders of the company. The final point to make on this case which might be of interest to readers is that the attempted creation of a second charge by the company in favour of the appellant charge holder was unsuccessful in its attempt to regularise the position in the CRO. That second charge was stated by the Court of Appeal to be void as against the liquidator as an “unfair preference” as that term is defined in company legislation. Sustainability Accountancy Europe has published ‘5-step starting guide to a sustainable transition for SMEs’. This discusses the initial steps an SME can take in the early days of their transition towards a more sustainable business. EFRAG is have announced that they are recommencing the drafting of sector specific ESRS standards and are inviting external participants to interact with them as they commence the drafting of this. The sectors where they are seeking participants are as follows: Agriculture, Farming and Fishing Food and Beverage Services Mining, Coal and Quarrying Motor Vehicles Oil and Gas Power Production and Energy Utilities Road Transport Textiles, Accessories, Footwear and Jewellery   The International Sustainability Standards Board has congratulated the Task Force on Nature-related Financial Disclosures (TNFD) on the publication of its recommendations during New York Climate Week 2023.  The TNFD recommendations can help companies communicate nature-related risks and opportunities to investors and other stakeholders. The ISSB September 2023 Update has been issued.  This update highlights preliminary decisions of the International Sustainability Standards Board (ISSB). Projects affected by these decisions can be found on the work plan. The ISSB have also released their September 2023 podcast. The UK Endorsement Board has published two reports as a result of its Climate-related Matters Research Project; Climate-Related Matters: Summary of Connectivity Research A Study in Connectivity: Analysis of 2022 UK Company Annual Reports Insolvency Minister Dara Calleary, TD has signed the Companies Act 2014 (Section 682) Regulations 2023. The Regulations, which came into effect on 1 October 2023, prescribe a revised Report for use by liquidators when making reports to the Corporate Enforcement Authority under section 682 of the Companies Act 2014. The revised section 682 report should be used for all submissions made from 1 October 2023. The Rules of the Superior Courts (Order 74) 2023 also commenced on 1st October 2023. For more information please see recent news article. European Commission consults on increase to company size thresholds The company size thresholds which are essential in determining the type of financial statements that a company must prepare, whether or not they are required to have an audit and whether they must prepare consolidated accounts, are largely determined by the limits set out in the EU Accounting Directive. Ireland currently has company size limits which are the maximum allowed under that Directive. The European Commission has released a draft act which proposes to increase the current size limits by 25%, to take account of the impact of inflation since these rates were first introduced. If approved, this amendment would then allow Ireland to increase their limits accordingly (subject to government approval and legislation). Anti Money -laundering and sanctions Europol via EMPACT (European Multidisciplinary Platform Against Criminal Threats) has this week issued a factsheet with statistics and other information on areas such as migrant smuggling, human trafficking ,environmental crime and excise fraud .You can access a copy of the EMPACT 2022 factsheet here. Other News The three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) have issued their Autumn 2023 Joint Committee Report on risks and vulnerabilities in the EU financial system. The Report underlines the continued high economic uncertainty. The ESAs warn national supervisors of the financial stability risks stemming from the heightened uncertainty and call for vigilance from all financial market participants. The Department for Communities has announced the appointment of Terence McGonigal as a Commissioner to the Board of the Charity Commission for Northern Ireland, from 1 September 2023 to 31 August 2028. A new traffic light display, which will indicate if a charity has submitted their accounts and reports to the Charity Commission for Northern Ireland on time, is being rolled out on the register of charities. The public register lists all the charities registered in Northern Ireland as well as providing information such as what they do, where they work and their annual accounts for applicable years. In July 2023, the Pensions Authority surveyed the trustees of 150 defined contribution (DC) schemes and 150 defined benefit (DB) schemes to assess trustee awareness and management of risks facing pension schemes. The Pensions Authority has this week published the results of the survey and you can read about the questions posed and conclusions of the Authority here. The European Banking Authority (EBA) recently published its 2024 work programme. It lays out 5 core areas of strategic priorities for 2024-2026. It has adapted its strategic priorities for its work programme for 2024 which includes developing an oversight and supervisory capacity for DORA (Digital Operational Resilience Act) and MiCAR (the EU Markets in Crypto-assets Regulation) and preparing the transition to the new AML/CFT framework. On the former, the EBA says will continue to deliver the policy mandates included in MiCAR and DORA, thereby contributing to the digital risk management dimension of the Single Rulebook and to a consistent framework for the regulation and supervision of crypto-asset activities. On the latter the EBA says it will work closely with competent authorities and the European Commission to facilitate the transition to the EU’s new legal and institutional AML/CFT framework. As part of this, the EBA will prepare the transfer of data, knowledge and powers to AMLA; support national competent authorities in their preparatory work; provide technical advice to the European Commission as necessary; and help to put in place the gateways necessary to make the effective cooperation between prudential and AML/CFT supervisors and regulators possible going forward. Minister of State for Trade Promotion, Digital and Company Regulation, this week urged early action on filing of company annual returns with the Companies Registration Office (CRO) in the context of the late November peak filing period. Please click here for the press release   where he reminds of the particular importance this year with the implementation of the requirement for PPS numbers to be provided for company directors. The Government has recently published its legislative programme for Autumn Session 2023. Read the press release here and the contents of the programme here. Items which might be of interest to members include: The Digital Services Bill 2023 is priority for publication and the General Scheme of the Bill  was published by DETE in March 2023. Pre legislative scrutiny has been completed since the summer update and the report on that can be accessed here . The Bill is designed to implement the EU’s Digital Services Act, and it aims to establish a new Media Commission which will be designated digital services coordinator and responsible for regulating online intermediaries. The Charities (Amendment) Bill is listed in the priority publications and is listed as heads in preparation. The General scheme of the Charities (Amendment ) Bill was published in April 2022 . You can read the press release from the Minister at the Dept of Rural and Community Development and download the general scheme of the Bill here. The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill is listed as heads in preparation. Since the summer legislative programme a public consultation has been held by the Dept. of Enterprise Trade and Employment on the four areas of proposed amendment to company law proposed by the Bill namely corporate governance ,company law enforcement and supervision, administration, and insolvency including the regulation of receivers. Read here the response to the consultation of the Consultative Committee of Accountancy Bodies – Ireland (CCAB-I) of which Chartered Accountants Ireland is a member. Two other bills which may be of interest are the Co-operative Societies Bill on which drafting is on-going and the Miscellaneous Provisions (Transparency and Registration of Limited Partnerships and Business Names) Bill 2023 on which heads in preparation is ongoing. For further technical information and updates please visit the Technical Hub on the Institute website.

In the wake of the Windsor Framework agreement, traders and businesses across the island of Ireland need to be mindful of the various changes due to take effect over the coming months and years as the provisions of the new framework are gradually phased in. To help navigate this landscape of new regulations, the Institute’s public policy team have prepared a high-level infographic which summarises all of the key dates and changes that traders need to be aware of in the short to medium term. As further developments with respect to the Windsor Framework arise, the policy team will ensure that our members are kept up to date and informed.