Although the cost of examinership may be prohibitive for smaller entities, Companies Act 2014 provides two alternative restructuring mechanisms that are both less complicated and less costly. Declan de Lacy reports. The restrictions imposed to stem the spread of COVID-19 have caused an unprecedented economic shock. The IMF’s Economic Outlook forecasts that the global economy will experience its worst recession since the 1930s, with Ireland experiencing a fall of nearly 7% in GDP and a rise of almost 150% in unemployment. The oncoming recession will inevitably result in companies failing at even higher rates than were seen during the downturn a decade ago. It is equally inevitable that many of the companies which will ultimately fail could be made viable by restructuring their debts and other obligations. It is incumbent on our profession to steer troubled companies through this crisis and give them the best possible chance of survival. The examinership process is the most widely recognised mechanism for restructuring insolvent companies. This mechanism is not suitable for small and medium-sized enterprises (SMEs), for whom the cost of examinership is prohibitive. That is not to say that formal debt restructuring is not accessible for SMEs. Companies Act 2014 provides two alternative restructuring mechanisms that are both less complicated and less costly. These mechanisms are the schemes of arrangement provided for by Sections 449-455 and Section 676 of Companies Act 2014. Neither mechanism is well-known or widely used, even though they have existed in one form or another for more than 50 years. Companies Act 2014 introduced the most recent version of these schemes and made the Section 449 scheme much more accessible. The infrequency with which these mechanisms are used is not a reflection on their effectiveness. They have recently been used by international companies to restructure hundreds of millions of euro worth of debt. They were also used to restructure the obligations of the property funds operated by Custom House Capital and by the company at the centre of the pork dioxin scare of 2008. Both schemes provide mechanisms by which a company may propose an arrangement in which the amounts due to creditors are either written off, deferred or otherwise compromised. If the requisite majority of creditors approve the arrangement, it can then become binding on all creditors. In practice, creditors need to be offered some quid pro quo to induce them to accept the proposals. This might be the introduction of new funds to partially reduce creditor balances or future payments linked to trading results. In each case, the outcome for creditors must be no worse than in a liquidation scenario as otherwise, an aggrieved creditor would have grounds to ask the court to refuse to permit the implementation of the arrangement. It is not necessary to treat all creditors in the same manner. Indeed, it is likely that any arrangement would involve secured creditors, preferential creditors and trade creditors being treated differently. Unlike examinership, neither scheme provides a mechanism by which onerous leases may be disclaimed. Notwithstanding this, landlords are likely to support proposals to reduce excessive rents to market rates if the alternative is the termination of the contract when their tenant goes into liquidation. A significant advantage of a scheme of arrangement over an examinership is that a company’s directors can commence the process without going to the High Court. There is also no requirement for an independent accountant’s report to be prepared. This means that a scheme of arrangement can be implemented for a fraction of the cost of an examinership. A further advantage of a scheme of arrangement is that the company does not automatically go into liquidation if a scheme is proposed, but not approved. The Section 449-455 Scheme There are no criteria that a company must satisfy before proposing a scheme of arrangement under Section 449-455. The first step in preparing to implement an arrangement is to identify the separate classes of proposed affected creditors. These might typically include preferential creditors, secured creditors, trade creditors, and related parties. A meeting of each category of creditor must be convened to consider the proposed arrangement. A ‘scheme circular’ must be prepared, in which the company sets out details of the proposed arrangement and how each class of creditor will be affected. Once notice of the class meetings has been issued, the company may apply to the Court for an order giving it protection from existing and new proceedings. This application is unlikely to be made unless a company is under immediate pressure from creditors. An arrangement becomes binding on all of a company’s creditors if 75%, by number and value, of the creditors represented at each class meeting votes in favour, the arrangement is sanctioned by the Court, and a copy of the order is filed with the Companies Registration Office (CRO). The Court has recently held that it should sanction a scheme unless “it is satisfied that an honest, intelligent and reasonable member of the class could not have voted for the scheme”. By comparison, a proposal by a company in examinership may be approved by the Court if it is agreed to by more than 50% of only one class of affected creditors. The Section 676 Scheme Any company that is either being, or is about to be, wound-up may propose a scheme of arrangement under Section 676 of Companies Act 2014. This means that the company must be in liquidation, or that a winding-up petition has been filed, or that an extraordinary general meeting (EGM) and creditors meeting to pass a winding-up resolution and appoint a liquidator has been summoned. Of course, if the proposed arrangement is approved, the winding-up need not proceed. A scheme pursuant to Section 676 is less complicated to implement than either an examinership or a scheme under Section 449-455. There is no requirement to distinguish separate classes of creditors or to obtain separate approval from each class. Additionally, an arrangement approved by the requisite majority of creditors becomes binding without the need to be sanctioned by the Court. The Court only becomes involved in the arrangement if an aggrieved creditor applies to have it amended or varied. The major disadvantage of the Section 676 arrangement is that it must be approved by 75% of all of the company’s creditors, and not only by 75% of those represented at the meeting where it is considered. This means that a proposed arrangement could fail through creditor apathy and not because of any opposition by creditors. Conclusion Neither scheme offers a perfect solution, either for companies or their creditors. The requirement in a Section 449 scheme to obtain the agreement of a majority of all classes of creditor means that a class comprising a small fraction of a company’s overall indebtedness can frustrate the wishes of the majority. The requirement in a Section 676 scheme to obtain the agreement of 75% of all creditors, and not only those who choose to make their views known, means that a meritorious proposal could fail due to creditor apathy. In many cases, onerous contracts, including leases, may be the reason for insolvency and the absence of a means to repudiate them is a defect in these schemes. It is not controversial to say that the restructuring options available to SMEs require improvement. As long ago as 2011, the programme for government adopted by Fine Gael and Labour included plans to introduce new restructuring mechanisms for SMEs that did not require court involvement. The Company Law Review Group made recommendations on the matter in 2012. More recently, in 2019, the European Union issued a new directive on restructuring and insolvency, which will require changes to our restructuring law and must be implemented by July 2021. In the meantime, directors of SMEs will need expert guidance if they are to avail of the imperfect restructuring options available to them today. Members of the Institute should be mindful that they must hold an insolvency practising certificate to advise companies in connection with arranging schemes of arrangements. The approach of Revenue and public bodies to schemes of arrangement In most companies, the debt due to the Collector General will represent more than 25% of the debts due to the preferential class of creditors. In such circumstances, Revenue’s agreement will be essential to securing the agreement of 75% of each class of a company’s creditors, as required for a Section 449 arrangement to succeed. Companies Act 2014 explicitly states that State authorities may accept proposals made under a scheme of arrangement that would result in their claim being impaired. This means that debts for taxes, local authority rates, and redundancy payments may be compromised as part of an arrangement. Notwithstanding this, the section of the Revenue Commissioners’ collection manual dealing with Section 449-455 proposals indicates that, where a company “wishes to put forward proposals, Revenue would be prepared to consider them but that they are unlikely to be accepted if they do not provide for full payment of the tax debt”. Interestingly, the section of the same document that deals with examinership indicates that “Revenue’s position will depend on the circumstances of the case (e.g. previous tax collection history, whether there will be a change of directors etc.)”. It therefore seems that Revenue approaches proposed write-downs of tax debts in examinership cases with a more open mind than they would for Section 449 proposals. This suggests that SMEs, for which the cost of examinership is prohibitive, may be treated less favourably by Revenue than larger enterprises, for which examinership is an option. Revenue’s response to the COVID-19 pandemic has been extraordinary and has gone so far as to suspend debt collection procedures entirely. In this context, it might be expected that Revenue will now adopt a more open mind to proposed arrangements in the interest of preserving industry and employment.   Declan de Lacy leads the Advisory and Restructuring Department at PKF O’Connor, Leddy & Holmes.

Conal Kennedy, Head of Practice Consulting, writes: As we are going to print, both the Republic of Ireland and the UK are beginning the process of re-emergence from lockdown. The stages of the process have been published, and businesses are starting to plan for the first steps needed. The COVID-19 pandemic has struck hard at many sectors of business, north and south of the border, and Chartered Accountants in practice are in the forefront of helping business clients to plot a route through and out of the crisis. Some practitioners have found that most of their time since the lockdown in mid-March has been spent firefighting. Clients have needed their expertise in financial planning, accessing finance, restructuring businesses, and applying for state aid. Just as importantly, accountants have been a source of reassurance and trust in uncertain times. A priority for the Institute has been to put in place a range of information for accountants in practice, working with our Advocacy and Voice team to obtain clarifications and highlight inconsistencies on the government supports available. As always, we in Practice Consulting are at the end of the telephone for you and we have been in continuous contact with members since the start of the crisis. Most of the Institute’s online resources specific to the crisis are now to be found in the COVID-19 Hub. The resources range from guidance on taxation and technical issues to health and wellbeing, and most recently, sources of finance. There is a lot of information in the web pages, and more to be found in our webinars, both live and recorded. We are continuing an active programme of live webinars, many of which are free. All of these are recorded and are immediately made available in what is fast becoming an impressive array of COVID-19 related guidance. In our webinar programme, our range of speakers and experts speak with authority and candour, focused on your needs as a member. In Practice Consulting, we have run six webinars on the response of practices to the crisis and the auditing and accounting issues arising from it. The COVID-19 Hub can be found on the Institute’s website at https://www.charteredaccountants.ie/knowledge-centre/covid-19-hub. Most businesses will find a way through the crisis through a combination of perseverance, innovation, and ingenuity. However, most will need finance, and access and availability of adequate and timely finance will be crucial to the economic recovery going forward. Recognising this, we have recently introduced Government Supports pages in the Key Resources area of the COVID-19 Hub. Here, we explain the Temporary Wage Subsidy Scheme and the Corona Virus Job Retention Scheme in ROI and NI respectively. See further information regarding these in the taxation section below. We also provide a guide to the broad and growing range of capital supports available to businesses available to business in both jurisdictions. Of note are the recently introduced schemes whereby businesses can defer or warehouse tax debt, which are further discussed in the tax section. Other schemes offer working capital loans or grants. Some schemes are for industry sectors particularly hard hit by the crisis. Accountants will need to develop an expertise and a familiarity with these resources if they are to help their clients most effectively. A source of finance will effectively meet a client’s needs if the application process is not overly complex or fraught with delays, and it results in timely and targeted funding. What has been your experience of assisting your clients to accesses sources of government funding, or indeed, in accessing these on your own practice’s behalf? We need your feedback so that we can more effectively help you and, where necessary, to lobby on your behalf. Please participate in our surveys, and of course we welcome hearing from you directly. One aspect of many offers of finance is that the application process includes a request for an accountant to report on the financial affairs of the business or person. Confirmation requests often take the form of a standard form for the accountant to complete and sign. Accountants should approach such requests with caution. It may be necessary to obtain a separate engagement letter. The Institute advises members to avoid signing such forms where they incorporate a broad and open ended statement, including such matters as confirmations of the client’s ability to repay borrowings or confirming the impact of the COVID-19 crisis on the client’s business. Also avoid using language such as “we certify”, “correct”, “accurate” or “we have ensured” since it implies a level of certainty which cannot necessarily be given. See Helpsheet E19 Reporting to Third Parties in the Members in Practice area of the website at this link: https://www.charteredaccountants.ie/Members/In-Practice/Helpsheets. See also Technical Release 11/2016 Third Party Letters of Confirmation, available in Chariot, which contains a pro-forma wording for a letter to a third party in connection with a request for confirmation. And of course, sources of finance are of little use unless there are viable businesses to support. There is much that government can do to smooth the path of commerce and industry, and much that you as an adviser can do to guide and support, but the road ahead is still fraught with uncertainty. What is certain to be next for accountants is more change, further challenge, and spurs to innovation. It will be a different profession that emerges from this crisis.

Coronavirus (COVID-19) update At the time of going to print, the situation regarding the Coronavirus (COVID-19) was evolving rapidly. Members and firms that require assistance are advised to consult the Institute’s website, where a special page has been set up containing advice and contact information: https://www.charteredaccountants.ie/about-us/coronavirus-(covid-19)advice-and-information Practising Accountants are key advisers to the business community, which is struggling to respond, to this fast-changing situation. The challenge is to stay ahead of events and stay in a position to give the best advice to clients. In spite of the range of demands facing  you, you should look to your own practice first. Make a plan for your own practice and plan to change it. Run scenarios that assume a progressively more or less restrictive environment going forward. Plan for staff non-availability due to illness or quarantine. Many practitioners and their staff are working from home. You may find that your systems were not designed to cope with the strains now placed on them, but now is the time to formulate new solutions and workarounds. Concentrate on what can be done and do it. Certain tasks may be impossible right now, but development work that had been put off can now be prioritised. Auditing can prove problematic, as in practical terms, it is typically carried out at clients’ premises, but also due to the greater risks and uncertainties to be dealt with. The FRC has issued guidance on this which is on its website. You are focused on cash flow because that is what suffers first in times of uncertainty. Again, start with a plan. Bring your financial information and accounts up to date so that you know where you stand. You may be doing less chargeable work and bringing in less cash. Identify what you can change to improve your own cash flow. Identify what cost can be cut and what expenditure you can defer. Are there sources of cash that can be drawn on? Engage with your lenders.   Clients expect and demand your advice and support right now, and your relationship as trusted adviser has never been so important. Clients should rapidly take stock of their situations, make plans for how to address issues and scenarios, and concentrate on protecting cash flow. The crisis affects clients in different ways and with different levels of severity. Your expertise, experience and judgement are now invaluable to them as your clients take their unique journeys through the crisis.   We will continue to engage and communicate with members in practice, with further and more detailed advice, as the situation develops. In the meantime, remember that your Institute and the Practice Consulting Team are here to help you.

Orla Doyle outlines the job search activities that reap the biggest reward. The Pareto principle states that 80% of outcomes are borne from 20% of the causes. It is one of the cardinal philosophies in business that ultimately guides business leaders in selecting the most productive inputs to drive maximum efficiency. However, this principle can be applied in many settings, including in the job search. See how you can harness the benefits of the 80/20 rule in your job search strategy to target the right company, the right culture, the right management team, and help you get a job you love. Wasted time The job market is a fickle beast, where the amount of effort you put in doesn’t necessarily correlate with the results you get. Working smart rather than working hard is vital. For instance, many people spend a significant amount of time tweaking their CVs and cover letters. While it is important to spend time on this, people often spend too much time, with any subsequent additions unlikely to move the needle. Interestingly, the majority of job seekers choose the job site route to apply for new jobs. Don’t get me wrong; job sites such as LinkedIn and Glassdoor are great tools to use when searching for a new job. However, churning out 10-20 applications per day on one of these sites is a lot of work that won’t necessarily yield the results you want. The truth is, nobody taught us how to look for our dream job. Most people don’t have a real strategy and as a result, everyone ends up doing the same thing. There are better ways to conduct your job search. It may require stepping outside your comfort zone, but it will ultimately raise your chances of making the right next step for your career. Both approaches described above are passive. There are more downsides to this than the time spent sitting back and waiting for an answer. In many cases, applicants later find that the job isn’t what they wanted or that compensation is too low or, in the worst-case scenario, they get no response whatsoever. Over time, this leads applicants to conclude that the job market is unfavourable, and they adopt a negative mindset. If you have been cranking out a large volume of applications daily without much luck, then you need a catalyst – a change in mindset, approach or methodology that places you on the path to career success. The psychology of spending time on inefficient job search tactics When you read the above, a fair question may be: “Why do people choose to put themselves through that?” The most common answer is that it helps people feel productive. Sending out ten applications a day across four job sites may not be the optimal way to land an interview, but at the end of the day, it helps the sender feel that they have done something or that they have put adequate effort into the job search. It’s a flawed perception, but a satisfactory outcome nevertheless for most job seekers. The other reason is that most people love passing the responsibility to someone else. The thought process here may be that if they want you, they will come back to you; if you spoke with a recruiter, they will come back to you when a relevant role comes in. In a competitive and globalised job market, though, this is rare. With the advent of technology, talent is now available across borders and the labour pool is larger than ever. Hence, if candidates are not accountable for their job search, it is an uphill battle to find suitable employment as hiring managers are likely looking at a dozen profiles that are similar or even identical to yours. To achieve success, you must be willing to do what the others won’t to achieve what they can’t. Applying the 80/20 principle So, what are the things that most people don’t do? Below are three things that you can inculcate in your job search. 1. Get specific Do you know what you want to do or, are you merely seeing what you can get? After some rejection, many people throw in the towel too early and start working their way down in terms of the jobs they are willing to accept. To prevent this from happening, get specific about the type of job you want, the size and the culture of the company, and the particular industry in which you would like to work. And then, do not deviate from that. Do you know the types of companies that hire for these jobs, the exact ones for whom you would like to work? Once you have this clarity, you will automatically be inclined to work harder to source those types of jobs and apply accordingly. You will increase your chance of getting results as your whole approach – from your CV to your references – is streamlined for the position you want. This is not to say that you should be rigid in your job search and operate within this one defined box. It is merely a tip to ensure that you are not aborting the search for your dream job before the appropriate efforts have been expended. Second, get specific about the goals of the particular job search tactic you are using. If it doesn’t work, stop and try a different channel. Many people continue to do an activity without ever stopping and asking: is this working? They adopt the attitude of “try harder” rather than analysing the results of a particular method. Set yourself a goal. For example, aim to secure five interviews through a specific channel. This could be achieved by utilising three different recruiters – but if it isn’t working, stop and take a fresh approach. 2. Network Relationships go a long way in the job market. The best jobs are often snapped up before they are even advertised on a public platform because the candidate had a good relationship with the hiring manager (or at least someone that knew them). A CV is a piece of paper that outlines your experiences at a high level. But, if you can have a conversation with someone where you articulate your expertise and ambitions, they now have a ‘face to the name’ on the CV and can understand your value proposition at a more holistic level. Start by developing a networking strategy (i.e. identify who can help you get to where you want to go and go to them directly). Other people won’t even know what they are looking for, making it impossible to know whom they need to talk to, or what they need to ask. As with all things, practice makes perfect – but it all starts with the first step. 3. Show, don’t tell The next time you have an interview, add an additional dimension to your preparation. Try to understand some of the problems the company or unit you are applying to is facing, and formulate a solution. This could involve producing a one-page document at interview, which outlines what you would do in the first 30, 60 and 90 days in the job to remedy the situation. Make no mistake: this is much easier said than done. However, a lot of successful applicants employ presentation materials where they can demonstrate what they bring to the table. Words are easy to say but tough to back up. Hence, if a hiring manager can concurrently see your work along with your words, you are automatically better than almost anyone else competing with you for the same job.   Orla Doyle is Head of Marketing at Lincoln Recruitment Specialists.

Dr Annette Clancy lays the ground rules for a successful spell of remote working. The work restrictions and social distancing introduced by the Government in response to COVID-19 may prove to be a watershed moment for flexible/remote working. The immediate shut-down of many workplaces forced hundreds of companies and thousands of workers to get creative about how to work and deliver services to clients and customers while observing public health protocols. As many are finding out, however, working from home presents a whole new set of challenges. So, how can we make flexible/remote working work? Keep going to work Not everyone has a home office or even their own room. Yet, you must still go to work. First, acknowledge the change in your work situation. It is not the same as going to the office. You may, for example, have to juggle childcare so be realistic about what you can achieve given the current circumstances. Discuss this with your employer and work around it for the time being. Then go to work. This is as much psychological as it is physical. Your home is an obstacle course of exciting activities, which throw themselves into your path before a deadline looms. Laundry, dish-washing, reorganising books (by colour, author or topic?) all seem to take on an urgency previously unheard of as the clock ticks closer to the dreaded deadline. You must defend yourself against this distraction before you begin. Create a workspace at home. This could be as simple as defining part of the kitchen table as the place where you put your laptop, phone charger and papers. Keep this clear of all other personal items. When you sit down at this space, you are at work; when you leave, you are at home. Maintaining this boundary is essential, otherwise work and home will become blurred. This is important when you work from home because it’s easy for work to bleed into your personal (psychological and social) life and before you know it, you are on your computer at 11pm and again at 7.30am. Keep communication channels open People go to work for myriad reasons. Obviously, there is the work itself, but we also develop our sense of identity through work; we make friends and develop relationships (some life-long). These relationships can feel threatened when we are no longer close to our work colleagues. People who work at home (even those who are used to it) can feel isolated and lonely. If your business uses technology such as Slack, Google Hangouts or Skype, for example, these are probably your go-to communication tools. But if not, it’s crucial to build in times when you check-in with your colleagues by phone, text or WhatsApp – whatever method works for your group of colleagues. Managers who have no experience of managing teams remotely will need to take particular care to check-in with their people as it is easy to lose contact in a remote working context. Keep things normal Social distancing can quickly turn into social isolation unless we keep some semblance of normality. We may not be able to go to the pub on a Friday with friends or go out to dinner with colleagues, but we can organise ‘virtual coffee dates’ or ‘remote lunches’ using Skype, Zoom or Facetime. This means organising specific times to be together online, but away from work. Of course, it isn’t the same as being in the same room. And yes, it’s a bit ‘weird’. But the main point here is to maintain social contact to ensure that workers do not succumb to loneliness, and for managers to engage in non-work conversation with their colleagues. Once you crack it, we may look back on this time as the research and development phase of a new way of working. Dr Annette Clancy is Assistant Professor at UCD School of Art, History and Cultural Policy.

Six influential Chartered Accountants in business and politics share their stories. Chartered Accountants are in many ways a driving force in the economy. With more than 16,000 members working in industry, and many in C-suite roles, our colleagues are found in every sector and at every level. In the pages that follow, we meet a number of trailblazing Chartered Accountants at various stages in their career. Each has had a significant influence on Ireland Inc. and continues to exemplify the very best aspects of the profession. From Sharon Cunningham, Co-Founder of Shorla Pharma to Michael Cawley, former Deputy Chief Executive at Ryanair, these profiles offer a snapshot of the talent and influence within the membership – qualities that will be in high demand in these uncertain times. Senan Murphy The CRH Group Finance Director discusses his journey from technical subject matter expert to general manager and leader. CRH Group Finance Director, Senan Murphy, divides his career into five chapters, beginning with his education and training as a Chartered Accountant and culminating in his current role. “I was interested in maths, business and science in school and did a BComm in UCD,” he recalls. “You could take a number of routes after that, but Chartered Accountancy looked the most interesting to me. I did a Diploma in Professional Accounting, which took the first three years out of the accounting exams at the time.” Senan joined Arthur Andersen in 1990 when it was one of the so-called Big 8. “I stayed there for five years and it was a very good place to work. It was a great transition from college into the real world. I moved into industry in 1995.” That saw him move to GE and begin chapter two. “Practice is a great experience, but you are an adviser. I wanted to be part of the execution and implementation; not just give advice and come back the following year to see how it worked out.” His GE career took in finance, acquisitions and business development in Europe and then the US, before moving back to Europe to what became GE Money. But the call of home was loud, and he moved back to Ireland with his wife and children in 2003 to begin the next chapter with Eddie O’Connor in Airtricity. “I stayed and helped grow the business until it was sold to SSE in 2008,” he said. That saw the beginning of chapter four with Senan moving into banking, first with RBS Ulster Bank and then Bank of Ireland. “2008 was an interesting time for the sector,” he noted with at least a hint of humour. “When something is in a crisis, you learn more than when things are going smoothly. It was a tough time for the banking industry but an interesting time to be part of it.” He sees the transition from subject matter expert to general management as quite natural for a Chartered Accountant. “The move from accountancy to financial leader to general management happens naturally. You start off learning about the financial side, but most of the job is about managing people. It’s about collaborating, working in teams and leading teams. As a financial manager, you get more and more involved in the commercial and operational sides of the business. In Airtricity, I became more and more involved in growing the business. “In some ways, it’s good to leave the numbers behind,” he continues. “As you go on, it’s about building good teams around you. The expertise around you comes from them. You become an orchestrator in a way. Accountants all start off the same way, and a lot of Chartered Accountants own their own business or end up running businesses. We don’t all stay in the financial world.” His fifth chapter sees him back in the role of Group Finance Director with CRH. “It’s a large organisation with lots of operating companies around the world. My job is to help drive performance and improve the business, but I also help to recruit, develop and promote talent globally. I also spend a fair amount of time talking to the owners of businesses. We have lots of shareholders around the world who want to hear from us.” For Senan, the people agenda is the most enjoyable. “That’s the part I enjoy most. I’m always pleasantly surprised by the people coming through the system who are more capable than their years might suggest. I also enjoy meeting shareholders. Some are supportive; some are quite challenging. Those two parts are very enjoyable.” He believes Chartered Accountancy has provided a good grounding for his career. “When you come out of college, you have to decide if you want to go into a business or go into practice and train as an accountant there. Practice is a good place to start with people of a similar age. You have to be a team player and learn to work with others. You have a number of clients and you have to build relationships with them. You’re not quite in a sales role, but you are really.” Michael Cawley Michael Cawley recalls his unorthodox path to Chartered Accountancy and life as the second in command at one of the world’s most successful airlines. With the candour we’ve come to expect from people associated with Ryanair, Michael Cawley says his reasons for becoming a Chartered Accountant were mostly materialistic. “My sister had a few boyfriends who were accountants and they had cars,” he says. “That was quite impressive, and it stuck out as most people didn’t have cars at that time.” Having never studied accountancy in school, Michael chose to pursue a commerce degree in UCC. “I liked it, and I went to Coopers & Lybrand afterwards. I spent three years auditing, and I hated it with a passion! The moment I qualified and finished my training contract, I walked out the door.” After a year teaching in UCC, he went into industry with the Cork-based motor dealer, Frank Boland. “I wanted to be in the middle of the action rather than just recording what had happened. I worked there until 1981 when I moved to Dublin to work for Kodak for five years.” His next move was to Athlone Extrusions as Managing Director. He led a management buy-out (MBO) of the company in 1990, the biggest such transaction in Irish corporate history at the time. The company later went on to a public flotation. After that, he moved back to the motor industry with Gowan Group in 1993. “I enjoyed my time there, but it was a family-owned company, so there was no prospect of a stake in the business,” he says. His move to Ryanair in 1997 as CFO and later, Deputy Chief Executive and Chief Operating Officer had its roots in the Athlone Extrusions MBO. “I worked on it with Gerry McEvoy in KPMG and Tony Ryan was one of his clients. I stayed in contact with him and he knew I had ambitions beyond the Gowan Group. I was 42 or 43 at the time and I wanted to really have a good lash at something. Ryanair was about to float at the time.” That connection led him to join the airline at a crucial stage in its history. “Incredible as it may sound, I got on with Michael O’Leary from day one. I had a good few rows with him over the years as well, of course. It was always exciting, sometimes frustrating, but I was extremely lucky to be involved. It suited me from the outset.” He describes it as a phenomenal opportunity. “Low fares were in their infancy back then. We transformed air travel across Europe. I have dealt with more than 300 airports across Europe; lots of them were a bit like Knock back then, small with a few connections. We breathed life into many communities and helped them build up tourism industries. Bergamo in Italy had 130,000 passengers when we started there; that increased to 13 million by 2014. Charleroi grew from 30,000 to 7.5 million.” He stepped down from his executive role with Ryanair in 2014. He took up several non-executive directorships with a wide range of organisations including the Gowan Group, Kingspan plc, Fáilte Ireland and, of course, Ryanair. “I was 60 and grandchildren had started to come along,” he explains. “When I joined, we had 3.5 million passengers, and when I left, we had reached 83 million. It was 142 million last year. I’m delighted to still be on the board. I’m in and out every five or six weeks to catch up, so I haven’t really left. I’ve also been lucky enough to have become involved in a number of very fine businesses.” Michael concludes by   emphasising the need to keep pace with change. “You have to be open to change. Despite the advent of artificial intelligence and so on, accountants will still be able to master their environment. But we have to stay up-to-speed and be flexible and humble about the need to change. You can be top of the pyramid today, and irrelevant in six months’ time.” Ronan Dunne Ronan Dunne, the self-declared “accidental accountant”, has taken opportunities as they arose – and to great effect. A stellar career that has seen Ronan Dunne become Executive Vice President and CEO of Verizon Consumer Group, the largest division of the world’s biggest telecoms company, could have been very different if not for a teachers’ strike back in 1981. “I was all set to do Law in UCD, but there was an examiners’ strike the year I did the Leaving Cert,” he says. “The papers couldn’t be marked and there were no college offers.” And then fate took a hand in the form of intervention by Terry O’Rourke, Managing Partner of Touche Ross, and a past pupil of his school. “He contacted the Dean and said if anyone was interested, they had three to four unfilled slots for trainee accountants. I was one of those kids who was always fascinated by finance. My dad worked for Shell in a finance role and I was always interested in it.” A phone call from the Dean and a chat with O’Rourke sealed the deal. “It sounded like an interesting opportunity, so I decided to give it a go. I am an accidental accountant.” Six years later, the newly qualified Chartered Accountant was about to experience his next encounter with fate. An injury in his final year at school had put paid to a promising rugby career, but he was also an excellent soccer player and went on to play at senior level for the Mount Merrion club in south Dublin. “We were playing in a soccer tournament in Wales, and I visited my brother in London as part of the trip. I was sitting in his apartment when my mother rang, saying a lady had called about a job interview. The job was in London so I borrowed a suit and tie from my brother, went for the interview that afternoon with BNP and by 4.30pm had a job offer. It was 1987 and the markets were on fire. They couldn’t recruit fast enough. I signed a contract, went back home and packed my bags, and returned to London three weeks later.” Rapid promotion followed, and by the age of 25 Ronan had become the chief accountant at the bank. He then switched to the banking side of the operation where he dealt mainly with major US corporates with operations in Europe. And then came a call to jump the fence. That saw him switch to senior finance and treasury roles, first with Waste Management International and then with transport and logistics group, Exel. Dunne’s next move saw him follow his former boss at Exel into BT Mobile, which was about to become O2 and de-merge from its parent. “In 2005, O2 was acquired by Telefónica and I became CEO of Telefónica UK in 2007,” he says. “That was an interesting back story. When I became CFO in 2004, my boss gave me responsibility for legal and regulation, then procurement, and then asked me to take on HR as well. After a while, I pointed out that I was doing all the heavy lifting and doing three jobs instead of one. He said I had missed the point. I clearly had the capability to be a general manager, and he was getting me ready to be a success in such a role. I still thought my future was as a big public company CFO. My boss and my chairman saw my potential before I did.” Dunne’s departure to Verizon followed a blocked sale of the business to Hutchinson in 2015. “I had decided to leave once the deal was closed. I had a fairly extensive non-compete agreement, so I had to move sector or move geography. Verizon is the largest telecoms company in the world and when I got that approach, there was no way I would turn it down. In late 2016, we headed off to New Jersey.” “My training as a Chartered Accountant has been incredibly valuable at every stage in my career,” he adds. “It really is best-in-class, and I don’t think there is a better skillset out there. In my opinion, a good Chartered Accountant is better than any MBA from any business school in the world. It’s the best business qualification out there.” And he has some advice for his fellow accountants. “The biggest challenge and opportunity for accountants is to realise that your success is measured not by what you do, but by what you can make happen and the influence you have on people. Building teams, coaching and developing them, and bringing them on a journey with you is what’s most important.” Sharon Cunningham Ambition and tenacity helped Sharon Cunningham forge a path from practice to the cutting edge of pharmaceutical innovation and entrepreneurship.   Award-winning entrepreneur, Sharon Cunningham, learned about business and accounts literally at the kitchen table. The Shorla Pharma founder was interested in business from a very early age. “Both of my parents owned companies, and it was ingrained in us from a very young age. They did the books on the kitchen table. I used to go to the accountants with my mother and was fascinated by the questions the accountant would ask. My mother was focused on things like sales and cash and had her own goals. The accountant was asking about things like profit margins, inventory management and so on.” That early inspiration led her to a degree in finance in UCC. “I wasn’t 100% sure what I was going to do when I went to college at first, but by the time I finished I knew I wanted to be a Chartered Accountant and wanted to get a training contract, preferably with one of the Big 4.” Sharon went to work with PwC in Waterford initially but soon found herself travelling to Dublin, Chicago, New York and London. “It was fun but difficult; it was lots of hard work, but it was great. I went on an international secondment to an investment fund in Manhattan. That was a great experience.” Her move to industry came about almost by chance. “At the height of the recession in December 2010, I was working on a very challenging audit. A colleague of mine got wind of a job going in a pharmaceutical company I had never heard of in Waterford. I met with the co-founders of EirGen, Tom Brennan and Patsy Carney. They are very inspirational people, and I joined the company.” Having spent seven years with the company, initially as a management accountant and later as Head of Finance, Sharon decided that it was time to start her own venture with her colleague, Orlaith Ryan. “EirGen was sold to a multinational in 2015 for $135 million in a very successful exit,” she explains. “After the takeover, the company started to change and was no longer the entrepreneurial organisation that we knew and loved. The excitement wasn’t there anymore, and both of us knew it was time to move on.” Their idea was to establish a speciality pharmaceutical company based in Clonmel, which would develop a pipeline of innovative oncology drugs for women’s and children’s cancers. “We spent two years planning Shorla at night and in our spare time, and we launched the company in January 2018,” says Cunningham. “Both of us would say that at no point were we scared. We believed in ourselves and our vision for what we wanted to do; we never thought it would fail.” That confidence was well-founded. “We don’t have billions of dollars and 20 years to wait like major pharmaceutical corporations. We are not a major corporation, nor are we a generics company. We are somewhere in between. We take existing active substances and do something novel with them. We put them to different uses and make them less toxic to the patient. The time to market is much quicker. Business is great and we are very busy. We are in the middle of multi-million euro ‘Series A’ funding round and we are growing and scaling up for the US market launch of our first product, a breast and ovarian cancer drug.” It is a bit unusual for a Chartered Accountant to set up a pharmaceutical company, she concedes. “But accountancy is a very useful skill to have in any industry. The Chartered Accountant qualification gives you a certain degree of confidence when you talk about numbers; people listen to you and don’t tend to probe too much. They accept and trust what you say. The profession as a whole has a very positive impact on society.” Sharon’s experience has taught her the value of planning. “It’s much more beneficial to work smarter, not harder,” she says. “Everyone should sit down and decide what they want to do and what they want to be, and then map out a way to get there. Don’t get bogged down in small details; don’t sweat the small stuff.” Michael McGrath Having moved from practice to politics via industry, Michael McGrath has brought his training and experience to bear in his role as Fianna Fáil’s finance spokesperson. One of the most prominent faces in politics in recent years has been that of Fianna Fáil finance spokesperson, Michael McGrath. The Cork South Central deputy has earned plaudits for his work on tracker mortgages and the regulation of so-called vulture funds, among other pressing issues. And he attributes at least part of that success to his training as a Chartered Accountant. “There is no doubt about it, the training I received as a Chartered Accountant has proven to be far more valuable than I ever thought it would,” he says. “It equipped me with the skills to get to grips with the finance portfolio. It also makes you comfortable with numbers and reaching informed decisions. The analytical skills you acquire are hugely valuable when it comes to problem-solving.” He started out on his professional and political journeys at a very young age. “I was the first member of my family to go to college when I went to study Commerce in UCC having just turned 17,” he recalls. “My first election was a contested role in the Commerce and Economics Society, and I won.” Having completed his degree in 1997, he joined KPMG in Cork. “I wanted to stay in Cork and was keen to get a professional qualification. I stayed for four years and was fortunate to work with a number of companies and organisations in a variety of sectors.” Then came the move into industry. “Following the end of the training contract, an excellent opportunity came up to join Red FM, a new start-up commercial radio station in Cork. I joined as Financial Controller in late 2001. The station had yet to go on air, and I was involved in helping set up the processes and systems to run it. It was great working for a station with a youth focus. I was reporting to the CEO and the board, and I enjoyed the diverse range of responsibilities. It was very nice having a company car as a 25-year-old, of course. I didn’t think things could get much better.” He left Red FM for a relatively short stint in the UCC finance function. “It was quite a senior role and a step up for me,” he notes. But the call of politics was loud. “I always had an interest in politics in parallel with my working life,” he explains. “I was fortunate to live in a town that still had a town council. That provided a fantastic platform for a young person to contest an election. A few hundred votes was all you needed to get elected. I ran in 1999 at the age of 22 and managed to get elected. My heart was set on politics after that.” Michael was elected to Cork County Council in 2004 and quickly realised he couldn’t continue working full-time. “I resigned from UCC in 2005 and found some part-time work to tide me through the next year and a half.” Election to the Dáil in 2007 followed. Re-election in 2011 was an altogether more difficult proposition, however. “It was an incredibly tough election. Fianna Fáil lost over 50 seats. At a time when the party vote collapsed, I managed to take the fifth and final seat. I focused on playing my part in rebuilding the party after that. Brian Lenihan passed away in June 2011, and I was appointed spokesperson on finance.” He enjoys his role as a public representative. “It is an enormous privilege to be a member of Dáil Éireann, and I still pinch myself walking in as a member. As a T.D., I am juggling a number of responsibilities. I have the finance portfolio and at a local level, I try to serve people to the best of my ability. What I get most out of it is being able to help people. Very often, people come in with difficult and sensitive issues. Sometimes they need guidance; sometimes they need someone to fight their corner.” Serving in government remains an ambition, of course. “Having spent nine years as finance spokesperson and four years involved in confidence and supply, to present a budget as Minister for Finance would naturally be an ambition,” he says. Fergal O’Dwyer Fergal O’Dwyer is one of the driving forces that helped turn DCC into the industrial powerhouse it is today. DCC is one of those quiet Irish success stories. Since its flotation in 1994, it has grown into a significant force in the energy, electronics and healthcare sectors with a substantial presence in 17 countries. From an investor perspective, the company delivered returns of nearly 7,000% up to the beginning of 2020. One constant throughout that success has been Chief Financial Officer, Fergal O’Dwyer, who joined the company in 1989 when it was still a venture capital firm. “Shortly after I joined, the company decided to change its colours and become an industrial group,” he recalls. “That required a complete transformation. We had a number of minority investments and had to decide which ones fitted in with the new strategy and which did not. Between 1990 and 1994, we spent our time moving out of some of them and moving to ownership positions in the others. I am not aware of other companies that made that strategic change.” He began his accountancy career with Craig Gardner (now PwC) almost straight out of school due to a natural aptitude. “I did maths and accountancy subjects at school and was always going to head towards finance or accountancy. I didn’t have a burning desire to be an accountant or anything, I sort of gravitated towards it.” O’Dwyer qualified as a Chartered Accountant at the age of 21 with a year or so of his training contract remaining. Ireland was in the depths of a recession at the time, and the search for opportunities took him overseas. His search took him and his wife to South Africa. “After we got married in 1983, we headed off to South Africa. I worked for three years there for Thomson McLintock, which represented KPMG at the time, and came back to PwC in 1986.” That move back led him indirectly to DCC. “I had clients who were looking for development capital, and I had worked on a number of deals on their behalf with DCC and they had worked out well for everyone. In 1989, I got a call from the founder and former CEO of DCC, Jim Flavin, who asked me to join the firm.” That was a major change. “I became an associate director of a venture capital company. I was dealing with entrepreneurs and building relationships with them. I learned about the venture capital focus on return on capital employed. That’s still the same mantra in DCC to this day. What is the return we are going to get on every euro? We aim to get a circa 15% return because we want returns well in excess of the cost of capital.” He describes the transformation from venture capitalist to industrial group as “very exciting”, but the flotation in 1994 was not without its challenges. “The flotation was a success, but we didn’t raise any capital, and our share price didn’t perform for quite a long time. We wore out a lot of shoe leather explaining our business and strategy. It has been all about constant delivery over the years, getting investors to listen and building a following. We were growing revenue, growing profits, growing cash flow, but still were having to work hard to sell the story. It was frustrating, but we had to accept that the market is always right.” His advice to other Chartered Accountants starting out on their careers is to keep learning. “The qualification equips you to do much more than just the numbers. You’ve got to interpret and advise on them. I still learn every day and you have to try to learn all the time. And you’ve got to learn from your mistakes. You can find business to be stressful, but if you put in the work and effort, it can be rewarding and fulfilling.”

John Kennedy explains how to turn a casual chat into a steady flow of high-quality clients. A common problem that limits the success of many practices is also one of the most damaging, but happily, it is also one of the easiest to fix. In this article, I will show you how to turn an informal chat into a positive client relationship. When you master this structure, you will be able to manage any conversation so your potential clients will understand how they will benefit from working with you. The self-defeating spiral A typical self-defeating spiral causes significant damage, and it goes something like this: I don’t feel comfortable talking about myself. When I meet potential clients, I often don’t know what to say. I wish I had more clients and more high-quality clients with whom I like to work. I don’t feel successful, so I lack confidence when I talk to potential clients about my practice. For many years, I have focused on identifying what sets high achievers apart. There is overwhelming evidence that the ability to shape and structure a casual conversation is perhaps the single most crucial skill. This skill is not a result of natural talent, charisma or charm – it is a strength that is practised and learned. Successful client conversations It may seem obvious, but a fruitful conversation involves two people taking turns at listening and talking. Yet time and time again, when the pressure of wanting to make a good impression takes over, we make the same mistake. And, odds are, this has happened to you.  It is easy to fall into the trap of believing that your task is to list the many reasons why the other party should become your client. You say more and more about what you think you should tell them until you reach the point – and this can sometimes come frustratingly early – where you run out of things to say or, worse, you keep talking without feeling in control of the conversation as an unwelcome unease inside you begins to grow. Mastering this skill is easier than you think. A fruitful conversation is about listening and talking. You need to understand how to do both effectively and appreciate how each fits together. So, here is the structure of a successful client chat. 1. Prepare The first stage of the conversation takes place when you are on your own. There is no talking or listening, just thinking things through and creating an approach that works. To master the skill of turning casual chats into client contracts, you need to structure your thoughts. You need to understand how best to probe the value your potential client is seeking, the best way to present the value you can offer, and how to propose the next step in what will lead to a long-term, mutually rewarding relationship. 2. Probe The conversation begins here. This stage mostly involves listening and knowing how to guide the other party so that they talk about issues that move the discussion into ‘productive’ territory. Your main task is to keep the conversation casual, interesting to your client, and moving towards an understanding of the value they can achieve by working with you. You do this by asking high-quality questions. As you chat, gently guide the other party through a series of casual questions in a way that helps them clarify their thinking and reach a more valuable understanding of the outcome that is most important to them. The ability to do this effectively is a skill that takes time and practice. However, three fundamental questions form the bedrock of  every successful client conversation: What will success look like? How will you know if we have achieved the success you seek? What is most important to you about achieving that success? You probe your potential client’s thinking by asking these – and related – questions to help them think in a more structured way about their goals. Most clients are unclear as to what they want to achieve, so helping them identify their priorities will encourage them to talk with you more. You don’t do this by telling them how clever you are or by providing all the answers. The real skill and value lie in allowing potential clients to experience your proficiency by helping them structure and organise their thinking. When you master the skill of eliciting the most precise answers possible to these three fundamental questions, you will set yourself apart. By taking this approach, potential clients will experience the value of your expertise, and you will demonstrate that you are focused on helping them define, and then achieve, the success they seek.  These are the firmest possible foundations for a high-value client relationship. 3. Present Only now do you begin to talk more than you listen, and you keep asking questions to maintain focus on the critical issues. In this phase, your task is to help the client see how they will benefit from working with you. You may be inclined to talk about what you will do, but technical considerations are not very motivating for potential clients. Your critical task is to increase their motivation to the point where they decide to work with you. You do this by giving examples, by telling stories of how you helped others facing similar issues, and by focusing on how things will improve. This evidence is already captured in your value menu, where you prepared a store of material that will help your client feel they are in good hands. The stronger they feel about the specific value they will achieve by working with you, the more you will stand out as someone they can trust. 4. Propose In this step, you move the relationship from talk to action. By probing how the other person currently sees things, and how they would like things to be in the future, you are helping them untangle the issues and identify the outcomes about which they feel most strongly. These are the foundations of a strong, trusting relationship. At this point, you may suggest talking further – but before then, you will send a brief note indicating how you can help achieve the success they seek (this is very different to the standard ‘letter of engagement’). The purpose of the note is to confirm that you have fully understood the outcomes your client desires.  A succinct note about the value they will receive will move you from a casual, theoretical chat to a highly practical and highly focused discussion on the specific reasons you should both work together. Like a road journey at night This is likely to be very different to the path you have followed up to now. The traditional, and often ineffective, model tells you that you should outline your expertise at every opportunity; that you should see every conversation as a sales opportunity and sell from the outset. Sometimes this sales “advice” is even more aggressive with outdated jargon that speaks of “closing the deal” or trapping the potential client in the “killing zone”. This is hardly a basis on which to build a high-quality practice with the right clients and high-trust relationships. Instead, the Practice Builder approach outlines the specific steps you should take to help a potential client identify and access the value that is truly important to them. And through a well-structured conversation, you let them experience how you are an essential element in arriving at the outcome they want. It’s like taking a road journey at night. Through your questioning, you help your client identify the destination at which they wish to arrive. You then map out the route and together, you can set off on your conversational journey. You use your questions like headlights, to light up the landmarks and road signs for the next stage of the journey. The critical thing to remember is that you are in the driving seat, choosing the route, and setting the speed – but your client gets to adjust anything that makes the journey comfortable for them, such as opening the window or choosing the music. In this way, the conversation remains a comfortable and stress-free casual chat, but with a clear set of directions, milestones and a destination that you both reach by working together. This approach is fundamentally about helping your client arrive at the success they most value. When you stand out as a master at this, your client will want you on every journey. And they will want to tell all of their friends about you. This is a firm foundation on which to build a successful practice.   John Kennedy is an experienced strategic advisor who has worked with senior management teams in a range of organisations and sectors.

Some of the commercial habits that are already being formed could serve us well once the COVID-19 crisis is over, writes Dr Brian Keegan.  By now, all businesses and institutions have taken some preventative and containment measures against COVID-19 for their staff, but the early adopters of social distancing won headlines and even kudos for so doing. They were the first to tell personnel to work from home, to block staff from hosting or attending large meetings or any type of gathering, and to have placed an embargo on international travel. Those early adopters had much in common. Typically they were large, multinational, and flourished in the online sales and services environment. By contrast, the indigenous SME sector often operates within a market segment where having people work from home is not practicable. The sector is now suffering the most from the collapse in demand caused by the pandemic. We have seen epidemics before, but how well did we remember the lessons of Zika virus a few years on? Or SARS? Or swine flu? How much better are we at defending ourselves? At the time, these were serious crises, but they seem to have faded from the collective memory very quickly. That may be simply because their social and economic impact was far less pronounced than that of the current scourge, but I’m not sure the reason is as straightforward as that. It may instead be because they left no lasting behavioural changes in most of the businesses and societies they affected. Societies that did remember how bad things could get were better prepared for COVID-19. Singapore is not the most open of jurisdictions, but they read the warning signs early. Also the isolation wards built there to tackle SARS in the early years of the century were still available to hold patients ill with COVID-19, and that in turn allowed the authorities to be more prescriptive about quarantining and testing. No business, nor even a country, can (or even should) sustain the kind of “just in case” procedures, buffers and Singaporean-style infrastructure to guard against once-in-a-century pandemics. This, however, is a crisis for all of us, and we should not waste an opportunity to take some insight from it. Some of the commercial habits that are already being formed could serve us well once this crisis is over. Because the situation is changing daily, I am hesitant to be too prescriptive and not all these behaviours will sustain or improve the bottom line. Nevertheless, there is already evidence that businesses are accommodating, and staff are delivering through, more flexible working practices. This is not just about working from home where that is possible, but about varied working hours, role definition and service delivery methods. In days when demand is in decline almost everywhere, the Institute sees an upswing in demand from members for resource materials and online training. This could be down to a desire to fill empty hours, or more positively, it could be down to a broader recognition that additional skills and tools are needed for future survival. Behaviour is the hardest thing to change. The reluctance to lend or borrow, an antipathy towards speculative development, overcautious economic policy and even the rise of the gig economy can be traced back to the downturn a decade ago. The legacy of the 2007/08 recession sometimes lingers less on balance sheets than it does in the collective memory. The businesses that bounce back the fastest could well be those who are the early adopters of the new business behaviours prompted by the crisis. Just like the last recession, COVID-19 is now creating memories of its own. We will need to hang on to the positive ones. Dr Brian Keegan is Director, Advocacy & Voice, at Chartered Accountants Ireland.

It is now time to consider the UK tax relief available on building projects, writes Eugene Moore. To stimulate international investment in the UK, the then-Chancellor, Phillip Hammond, presented his 2018 Autumn Budget to the House of Commons. In it, he announced the introduction of capital allowances for capital expenditure incurred on the construction, renovation or conversion of most UK and overseas buildings and structures. The Structures and Building Allowance (SBA) applies to contracts entered into on or after 29 October 2018. Construction projects that may qualify for the SBA are now starting to be completed, with the structures and buildings coming into use. It is now, therefore, time for the current owners and their advisors to consider the significant tax relief available on such capital projects and how best to mitigate the risks of making an invalid claim. The relief Relief is available for UK and overseas structures and buildings where the claiming business is within the charge to UK tax. The SBA was introduced at a rate of 2% straight-line basis on qualifying expenditure over 50 years. The rate was increased to 3% in the Budget and the change will take effect from 1 April 2020 for UK corporation tax and 6 April 2020 for UK income tax. The relief commences with the later of: The day the building or structure is first brought into non-residential use; or The day the qualifying expenditure is incurred. Once qualifying expenditure is incurred, the first use of the structure or building must be non-residential. Subsequent events, such as change of use to residential or the demolition of the structure or building, will impact the availability of the SBA. A period of non-use immediately after a period of non-residential use is deemed as non-residential use, and the SBA continues to be available. Qualifying activities The structure or building must be for a qualifying activity carried out by the person who holds the relevant interest. Qualifying activities include: trade; an ordinary UK property business; an ordinary overseas property business; a profession or vocation; the carrying on of a concern listed in ITTOIA05/S12(4) or CTA09/S39(4) (mines, quarries and other concerns); or managing the investments of a company with investment business. Qualifying expenditure Capital expenditure incurred on the construction or purchase of a structure or building (including professional fees and site preparation costs) is qualifying expenditure. Excluded expenditure covers: the cost of the land or rights over the land; the cost of obtaining planning permission; financing costs; or the cost of land remediation, drainage and reclamation. Abortive costs, such as architect’s fees associated with a structure or building that is not completed, do not qualify for the SBA. Commencement date As the SBA was introduced to stimulate investment from 29 October 2018, allowances are not available on structures or buildings where the contract for the physical construction work was entered into before 29 October 2018. For projects under a construction contract, the commencement date for the SBA will be the date of that contract. HMRC is of the opinion that contracts can take different forms; it gives the example of email exchanges, which confirm that works will take place. Where no contract is in place, the date of the commencement of physical works represents the commencement date for the SBA. This is also the case where physical works commence, and a contract is subsequently put in place. Site preparation According to HMRC, the cost incurred in preparing land as a site is treated as expenditure on the construction of the structure or building that is then built upon that site. This includes cutting, tunnelling or levelling land. On the plus side, these costs are not excluded as expenditure for the SBA. On the downside, the timing of these costs could drag the entire construction project into an invalid claim position for the SBA if they are incurred before 29 October 2018. HMRC states that the following does not impact the commencement date: separate preparation and construction contracts; replacement of preparation contracts; preparation works ceased then recommenced; and preparation work redone. Demolition or enabling works incurred before 29 October 2018 do not in themselves make the entire claim invalid for the SBA unless explicitly linked to the actual structure or building. Practical issues Before an SBA claim can be made on a UK income tax or UK corporation tax return, the current owner of the relevant interest in a structure or building must create and maintain an allowance statement. Where the current owner incurred the qualifying expenditure in relation to the structure or building, the current owner creates the allowance statement. Where the current owner acquired the relevant interest in the structure or building from another person, they must obtain the allowance statement from the previous owner. An allowance statement means a written statement, which must include the following information: information to identify the building to which it relates; the date of the earliest written contract for the construction of the building; the amount of qualifying expenditure incurred on its construction or purchase; and the date the building is first brought into non-residential use. CPSE.1 (Ver. 3.8) General Pre-Contacts Enquiries for all Commercial Property Transactions now contains questions concerning the SBA and requests explicitly the allowance statement. In summary The SBA may result in significant tax relief for UK businesses that construct or purchase non-residential structures and buildings where previously, there was none on such expenditure. Careful consideration should be given to the commencement date of the project, and detailed evidence must be created and maintained by way of an allowance statement to avoid invalid claims.   Eugene Moore ACA is Corporate Tax Manager at BDO Northern Ireland.

Colm Davitt, CEO at Dental Care Ireland, discusses life at the helm of the five-year-old dental business he founded with his brother. What do you most enjoy about your current role? My role involves acquiring dental practices and helping them achieve their full potential. It combines my background in business and accountancy with a passion for the healthcare sector. I love seeing the practices grow and evolve as we invest in facilities, services and management support structures. Our 15 practices are located all over the country, which means a fair amount of travel, but I enjoy getting out of the office every week to meet with current and potential practice teams. What has been your career highlight thus far? Two career milestones stand out. First, I passed my final admitting exams to become a Chartered Accountant at age 21. My qualification has been the foundation and bedrock of my career achievements to date. Second, a major highlight was the opening of our first branded Dental Care Ireland practice. I first came up with the Dental Care Ireland concept in 2014 with my brother, Dr Kieran Davitt. Our vision was to create a group of established, high-quality dental practices nationwide. It has been a hugely rewarding experience to see that idea become a reality in just five short years. How do you stay productive day in, day out? I am a firm believer in setting goals. We have ambitious growth plans for Dental Care Ireland, so I review our objectives and targets at least every six months. I am also fortunate to have built a highly motivated team around me. Our head office is located beside the sea and close to home, so I can walk to and from work. When I’m not on the road, it gives me some guaranteed fresh air and headspace. I try to balance work with plenty of family time too. I dedicate my weekends to watching my kids in action on the sports field or catching up on GAA.  What changes do you anticipate in your profession in the next five to ten years? I expect to see the large-scale automation of routine accounting and data processing over the next ten years. It will be essential for Chartered Accountants to remain commercial and value-focused. In general, I think the need for flexibility in the workplace will continue to grow, and employers will have to adapt accordingly. In the dental sector, we may see fewer dentists willing to run their own businesses due to increased compliance and administration requirements. What is the best advice you’ve ever received? Stay true to what you really believe in. Being a CEO can be a lonely place, and there are many ups and downs along the way. If you believe in what you are doing, you will gain respect and trust from those around you. Over the years, I have had the privilege of working with several great mentors and CEOs. They all had the ability to create a small but very loyal team, which is probably the most important lesson I have learned. Working with a talented and supportive team makes the days much more enjoyable and fulfilling.

At the time of writing, efforts to contain the spread of coronavirus are undoubtedly the focus of attention for society and business across the island. This is a very serious and fast-evolving situation, and Chartered Accountants Ireland will adhere to the official advice provided by our respective health services and governments. The safety and health of our members, students and staff are paramount, and that principle guides the decisions taken. The Institute is reviewing its programme of activities in respect of members, students and external stakeholders. We will be in contact with everyone concerned to advise them of all decisions made. I would like to take this opportunity to commend businesses across the island for their responsible attitude to their employees and customers in following official guidelines. Such decisive action will, we hope, effectively curtail the spread of the virus. Paschal Donohoe T.D. At the start of March, we were honoured to host Minister for Finance, Public Expenditure and Reform, Paschal Donohoe T.D., who addressed an invited audience of Institute members and guests. Inevitably, coronavirus featured prominently with the Minister predicting that the Irish economy would be impacted by the global slowdown associated with the outbreak. He said: “Many, including the OECD, outline that this outbreak has the potential to slow global growth to its lowest rate since the financial crisis just over a decade ago. To what extent, it is too early to say, but it follows that weaker growth will affect our short-term outlook and my department will update its projects in April”. Turning to Brexit, the Minister argued that while the post-Brexit world will present significant challenges, if managed correctly, Ireland’s reputation as an open, adaptable yet stable economy also presents opportunities.  Engagement with US members and politicians At the time of writing, the Institute’s Director of Advocacy & Voice, Dr Brian Keegan, and myself are currently meeting with members and politicians in the USA. The programme has involved meetings in New York with Northern Ireland Economy Minister, Diane Dodds, and Consul General of Ireland, Ciarán Madden, before moving on to Washington DC for various events including the Irish Business Leaders’ Lunch, the Irish Funds dinner and the NI Bureau breakfast. Throughout the visit, we have had a very warm welcome from members based in the US and some really useful engagement with political representatives from both sides of the Atlantic. Institute signs climate change pledge In February, our Institute announced that it is one of 14 accounting bodies worldwide to become signatories to a call to action on climate change issued by Accounting for Sustainability (A4S). The memorandum of understanding signed by Chartered Accountants Ireland states that signatories will commit to providing the training and infrastructure that accountants need, as well as supporting initiatives and providing the necessary evidence to take action on climate change. In signing the memorandum, Chartered Accountants Ireland recognises that climate change is an economic, social and business risk and that accountants must take action collectively as a profession and individually as professionals working in the public interest. The 14 accounting bodies signed up to the agreement represent a total of 2.5 million accountants and students worldwide. Annual Dinner Finally, this is my first comment section since our Annual Dinner at the end of January. I would like to record my thanks to the 900 guests who supported the event; to our event partners Dublin Airport, Bank of Ireland, PeopleSource and Toyota; to our special guest, Lochlann Quinn FCA; and, most particularly, to the many corporates who supported the event by hosting tables. For me, it was another great demonstration of how Chartered Accountants are at the heart of our economy, driving Irish business. Conall O’Halloran President 

Richard Day and Alannah Comerford explain how Chartered Accountants can enhance their organisations’ data transformation capabilities using Alteryx. With the recent changes to the FAE syllabus, which now includes Tableau, Alteryx and UIPath, the new crop of qualified Chartered Accountants will bring these skills into the workplace. In this article, we will discuss the advantages of using a data processing tool such as Alteryx. The Institute has recognised the value that Alteryx provides, and the onus is now on all of us to leverage the skills and knowledge our bright new crop of young accountants will bring to the workplace. Reflect on the tasks we are required to complete regularly as part of our role as a modern-day Chartered Accountant. Many of us would find that, despite not considering ourselves to be data experts, we cleanse, filter, summarise, append and cross-reference datasets – even if we don’t think of our actions in these terms. We often turn to spreadsheets to do these data-heavy tasks. Many of us have picked up a spreadsheet which has multiple tabs, complex formulae, thousands of rows of data and found it challenging to figure out what is happening. Also, these complex transformations and calculations often have undocumented steps, can be slow to update, require manual effort to repeat, and generally could be better controlled. Alteryx is a data processing tool that facilitates data transformations and calculations in a controlled and repeatable manner and can revolutionise how we process and analyse data.  Given the user-centric design and functionality, all accountants should be able to pick up Alteryx and get started. In Alteryx, steps in a process are represented graphically in a format called a “workflow”. It should, therefore, be far easier for a colleague to view such a workflow and figure out what is happening than if they were to pick up a spreadsheet, as described above.  Repeatable data transformation Take the simple scenario where we need to carry out a task that requires information from two or more systems. We typically export information from each system into separate files and then transfer these files to tabs in a single spreadsheet to carry out the task by summarising information from one tab and looking it up in the other. In an ideal world, with fully integrated systems perfectly tailored to all of our needs, this would be possible to do automatically on the systems themselves. However, this level of integration is not a reality for most of us and as a result, we regularly spend our time on these data transformation tasks. In many cases, data manipulation often represents a significant proportion of the time taken and does not leave much time for the accountant to review and consider the results. Alteryx can help with the data transformation and processing elements of such tasks. It provides the accountant with a way to build a workflow to complete each of the required steps each time such analysis is performed. It would then be a matter of refreshing the input files as needed and running the workflow, eliminating almost all of the time associated with the transformation of the data (see Figure 1). Similarly, Alteryx offers excellent value to an accountant by cleansing the data. In a world with imperfect and unintegrated systems, there may be data quality issues as well as inconsistent data across different systems. We have become used to removing leading zeros in an account or reference number, correcting misspelt names, or translating names of customers or products, so they match across systems. Alteryx allows us to build these data cleansing routines into a workflow to ensure that they are automatically performed the same way any time a file of this type is processed, unlocking real efficiencies. Where we need to perform tasks such as sorting, manipulating or joining files of any reasonable scale, Alteryx comes into its own. Standard steps that are performed regularly are prime targets for Alteryx. This affords excellent opportunities for Chartered Accountants to begin using this tool, as they should have an exceptional understanding of the activity required and the associated inputs and outputs. Robust data processing While many of the functions discussed above would be possible with other tools, Alteryx also has the added advantage of allowing the user to make the data transformation process more robust. While at first, it may be slightly more challenging to use Alteryx rather than filtering, sorting and using copy and paste in a spreadsheet, a Chartered Accountant will quickly become familiar with the tool given its graphical nature. Also, the rigour that is brought to a process by a user deliberately building specific steps into a workflow lends itself to robust processing. In Alteryx, it is also possible and recommended to build in controls to provide comfort over the completeness and accuracy of the information being manipulated at critical stages of the process, assuring that all required data is included and that the result is accurate. The processing is a little more opaque since it generally sits in data files rather than yet another tab on a spreadsheet. You should, therefore, build in the ability to browse the interim data at various stages of your process so you can troubleshoot or review how it looks and check that the different steps are performing as expected. When performing calculations or analysis in a spreadsheet, a small change can cause an error in a set of calculations, and it can be challenging to identify where the error is occurring. There may be hundreds or even thousands of iterations of a formula. As a result, we often see data anomalies fixed with hard-coded values. This is much better in Alteryx as good design will allow errors to be identified and a user cannot revert to hard-coding values, which may not be appropriate for future iterations of a calculation. It is also easier with Alteryx to ensure that inputs are used as provided. It provides a mechanism to revert to the source data when required, which also contributes to the robustness of a process.  Processing at scale In Alteryx, tasks can also be carried out using large volumes of data that would only have been attempted by the bravest of spreadsheet proponents, making tasks that were previously tricky (or in some cases, impossible) more feasible. Some spreadsheets have an outer limit of up to one million lines, but in many cases, the practical limit is much lower since adding formulae to files with only thousands of records can cause them to slow down drastically. Alteryx can handle the bigger datasets we now encounter. In addition, making changes to calculations in spreadsheets can be time-consuming and many have encountered spreadsheet files crashing. Alteryx generally allows changes to be made and re-run quickly. Many workflows will run in seconds while processing simple transformations for millions of records should only take a few minutes. This is a huge advantage when building a workflow, as it enables the user to experiment efficiently and add additional functionality with ease. Documentation The ability to review a workflow and the controls built into it affords management excellent oversight of calculations that may drive critical outputs. Detailed documentation of processes is something that is not always present, especially for data-heavy tasks that began as an ad hoc exercise but are now embedded in everyday activities. Performing data transformation in a tool such as Alteryx and adding annotations to workflows has the added benefit of encouraging the user to define and document what is happening in a process. Outputs The outputs from Alteryx workflows can be produced in a range of formats. It may be that the most convenient output from your Alteryx workflow is a spreadsheet, such as debtors who are over their credit limit. It is also possible for visualisations, such as those covered in previous articles, to be refreshed automatically with data files produced from Alteryx. This can help Chartered Accountants provide significant value to their businesses. Significant value Alteryx may not be required when you are working with easy-to-manipulate data on a once-off basis. In an increasingly regulated and controlled business environment, however, the benefits associated with repeatable, efficient and documented data transformations are of significant value. As we are supported by our soon to be qualified Chartered Accountants on our data analytics journey, we encourage you to share your experiences within your teams. Knowledge-sharing and an open attitude to the improvements technology can bring will breed success.   Richard Day FCA is Partner, Data Analytics & Assurance, at PwC Ireland. Alannah Comerford ACA is Senior Manager, Data Analytics & Assurance, at PwC Ireland.

Eimear McGrath explores some of the key impacts of the European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019 and asks to what extent they will widen the financial reporting and filing obligations for partnerships. Signed into law at the end of November 2019, the European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019 (S.I. No. 597/2019) (the 2019 Regulations) came into operation on 1 January 2020. The effect of these Regulations is to bring the statutory financial reporting and filing obligations of certain “qualifying partnerships” more in line with those of companies formed and registered under the Companies Act 2014 (the 2014 Act), the main aspect being the requirement for qualifying partnerships to file and make public their financial statements. This article explores some of the key impacts of these Regulations on such qualifying partnerships in respect of their financial reporting and filing obligations. It may be of particular interest to professionals that organise their business as a partnership. What were the financial reporting and filing obligations of partnerships until now (under the 1993 Regulations)? Prior to the commencement of the 2019 Regulations, the European Communities (Accounts) Regulations 1993 (as amended) (the 1993 Regulations) set out the scope of partnerships that were subject to requirements for the preparation, audit and filing of financial statements that were generally equivalent to those applying to companies under the 2014 Act. In summary, the requirements of the 1993 Regulations applied to any partnership (both general partnerships established under the Partnership Act 1890 and limited partnerships established under the Limited Partnerships Act 1907), all of whose partners – and, in the case of a limited partnership, all of whose general partners – were limited corporate bodies or other entities whose liability was limited. It also required that such partners or general partners that were limited corporate bodies, or other entities whose liability was limited, were registered in an EU member state. Therefore, for example, such partnerships using limited companies registered in the Isle of Man or the Channel Islands did not have to file their financial statements. These 1993 Regulations are revoked by the 2019 Regulations, except to the extent that they relate to the financial years of a “qualifying partnership” commencing before 1 January 2020. What is a qualifying partnership under the 2019 Regulations? The 2019 Regulations introduce a new definition for a “qualifying partnership”, which is set out in Regulation 5. The definition does not ultimately change the previous requirement in the 1993 Regulations of bringing certain partnerships whose members enjoy the protection of limited liability into scope for the preparation, audit and filing of financial statements. However, it does extend the definition in the 1993 Regulations and has been reworded to address the other entity types as defined in the 2014 Act. It incorporates partnerships (both general, established under the Partnership Act 1890 and limited, established under the Limited Partnerships Act 1907), all of whose partners and, in the case of a limited partnership, all of whose general partners, are: limited companies; designated unlimited companies (designated ULCs); partnerships other than limited partnerships, all of the members of which are limited companies or designated ULCs; limited partnerships, all of the general partners of which are limited companies or designated ULCs; or partnerships including limited partnerships, the direct or indirect members of which include any combination of undertakings referred to above, such that the ultimate beneficial owners of the partnership enjoy the protection of limited liability. Regulation 5(2) also further extends the above list to include any Irish or foreign undertaking that is comparable to such a limited company, designated ULC, partnership or limited partnership. However, the reference to such foreign undertakings having to be registered in an EU member state has been removed. It is worth explaining some of this in further detail. A limited company is any company or body corporate whose members’ liability is limited. Designated ULCs are defined in Section 1274 of the 2014 Act and include, amongst other entity types, unlimited companies that have a limited liability parent. Such designated ULCs are not exempt from the requirement to file financial statements with their annual return. In considering whether an undertaking is “comparable”, Regulation 5(3) sets out certain guiding principles that would suggest comparability while Regulation 5(6) states that in making the assessment, regard should be had to whether the liability of persons holding shares in the undertaking is limited. The reference to shares is cross-referenced to Section 275(3) of the 2014 Act, which sets out the interpretation of the meaning of “shares” and mentions that, in the case of an entity without share capital, the reference to shares is to be interpreted as a reference to a right to share in the profits of the entity. Regulation 5(5) defines “ultimate beneficial owner” as meaning “the natural person or persons who ultimately own or control, directly or indirectly, the partnership or undertaking”. The concept of “ultimate beneficial owner” is also referred to in Section 1274 of the 2014 Act, which provides that certain designated ULCs must prepare and file statutory financial statements with their annual return. The types of entities that fall under the definition of a designated ULC in Section 1274 are clearly set out and the definition specifically includes a guiding principle whereby if the ULC’s ultimate beneficial owners enjoy the protection of limited liability, they will fall under the definition of a designated ULC. There is, however, no definition of “ultimate beneficial owner” provided for in the 2014 Act. It has generally been interpreted to incorporate not only natural persons, but also orphan entities that directly or indirectly enjoy the benefits of ownership. It is clear from the definition in the 2019 Regulations that the “ultimate beneficial owner” must be a natural person. Whether the definition of “ultimate beneficial owner” in the 2019 Regulations carries through to the interpretation of “ultimate beneficial owner” in Section 1274 of the 2014 Act in the context of ULCs will need to be further considered. What are the consequences of being a qualifying partnership in respect of financial reporting and annual return filing obligations? Qualifying partnerships will apply Part 6 of the 2014 Act, which addresses the accompanying documentation, including financial statements, required to be annexed to the annual return. Existing partnerships that fall within the scope of the 1993 Regulations have generally been required to meet such obligations. However, the extension of the definition of qualifying partnerships means that many more partnerships (such as those using limited companies registered in a non-EEA member state, for example) will now be required to file financial statements and make them publicly available. The application of Part 6 of the 2014 Act to qualifying partnerships is addressed in Part 4 of the 2019 Regulations. The general principle of the 2019 Regulations, as stated in Regulation 7, is to apply Part 6 of the 2014 Act to a qualifying partnership as if they were a company formed and registered under that Act, subject of course to any modifications necessary to take account of the fact that the qualifying partnership is unincorporated. Part 4 further goes on to modify or dis-apply certain provisions of Part 6 of the 2014 Act for qualifying partnerships. Some notable modifications and dis-applications are discussed below. Interpretation of terms Regulation 8 outlines certain terms in Part 6 of the 2014 Act pertaining to “companies” that should be construed differently for the purposes of qualifying partnerships. Where Part 6 of the 2014 Act refers to the directors, secretary or officers of a company, it should be construed as a reference to members of a qualifying partnership (i.e. in the case of a partnership, its partners and in the case of a limited partnership, its general partners). Any duties, obligations or discretion imposed on, or granted to, such directors or the secretary of a company should be construed as being imposed on, or granted to, members of the qualifying partnership. Where such duties, obligations etc. are imposed on, or granted to, such directors and the secretary jointly, they shall be deemed to be imposed on, or granted to (i) two members of the qualifying partnership, where it is not a limited partnership; and (ii) in the case of limited partnerships, if there is only one general partner, that partner; or if there is more than one general partner, two such partners. References to the “directors’ report” of a company should be construed as references to the “partners’ report” of a qualifying partnership, unless otherwise provided. The date of a company’s incorporation will be construed as the date on which the qualifying partnership was formed. Any action that is to be, or may be, carried out at a general meeting of the company will be deemed to be any action that is to be, or may be, carried out at a meeting of the partners, or otherwise as determined in accordance with the partnership agreement. Dis-application of certain provisions in Part 6 of the 2014 Act in respect of financial statements The 2019 Regulations dis-apply certain provisions that are contained in Part 6 of the 2014 Act to the financial statements of qualifying partnerships. Amongst these are: the general obligation to maintain and keep adequate accounting records and the statement in the directors’ report pertaining thereto; and the requirement for Companies Act financial statements to comply with applicable accounting standards, to provide a statement of such compliance, and to disclose information in relation to departures from such standards. In reality, these dis-applications arise as a result of a legal technical issue. Regulations brought into law by virtue of a Statutory Instrument are often used to implement EU Directives. Such Statutory Instruments may not include provisions that do not form part of the underlying EU Directive. The purpose of the 2019 Regulations is to give further effect to Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings (the 2013 EU Accounting Directive). The general obligation to maintain and keep adequate accounting records and the requirement for Companies Act financial statements to comply with applicable accounting standards did not derive directly from that 2013 EU Accounting Directive. However, since qualifying partnerships are required to prepare statutory financial statements that give a true and fair view, it stands to reason that they will need to maintain adequate accounting records to support the preparation of such financial statements, and will also need to comply with applicable accounting standards in order for the statutory financial statements to give a true and fair view. There are additional dis-applications arising from the fact that certain provisions will not apply in the case of a qualifying partnership, such as the requirement to provide details of authorised share capital, allotted share capital and movements therein, the requirement to disclose information on financial assistance for purchase of own shares, and the requirements in the directors’ report to disclose directors’ interests in shares and interim/final dividends, among other items. The relevant dis-applications and modifications are set out in detail in Part 4 of the 2019 Regulations. Application of other company law to qualifying partnerships Part 7 of the 2019 Regulations provides for the application of the European Union (Disclosure of Non-financial and Diversity Information by certain large undertakings and groups) Regulations 2017 [as amended by the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) (Amendment) Regulations 2018] to qualifying partnerships as if they were companies formed and registered under the 2014 Act. Part 6 of the 2019 Regulations also imposes the requirements of Part 26 of the 2014 Act in respect of payments made to governments on certain qualifying partnerships.  These are subject to any modifications necessary to take account of the fact that the qualifying partnership is unincorporated. Annual return filing obligations The requirements in relation to the obligation to make an annual return are set out in Regulation 21 of the 2019 Regulations, which state that the annual return of a qualifying partnership is to be in the form prescribed by the Minister for Business, Enterprise and Innovation. Qualifying partnerships will be required to submit to the Companies Registration Office (the CRO) their annual return accompanied by financial statements, and by a partners’ report and auditor’s report, where relevant, for each financial year-end. The CRO notes that the relevant form for filing the annual return is Form P1, which requires details of the partnership name and its principal place of business. The annual return form required to be filed by companies is Form B1, which requires additional information such as authorised and issued share capital, members and their shareholdings, for example. Conclusion So, what actions should members of the Institute take?  Members should familiarise themselves with the requirements of the 2019 Regulations. While this article explores some of the financial reporting and filing provisions in the Regulations, it does not touch on other aspects such as those regarding the audit of financial statements and reporting by auditors. It is clear, for example, given the extension of the definition of qualifying partnerships by the 2019 Regulations, that Institute members should check whether partnerships they are involved with, either in an employment or in an advisory capacity, will now be required to file and make public their financial statements, with effect from financial years commencing on or after 1 January 2020. Failure to comply with this, and other specified provisions of the 2014 Act will result in an offence being committed and therefore, legal or professional advice should be sought where necessary. Eimear McGrath is Associate Director at the Department of Professional Practice  in KPMG.

Kim Doyle considers the best course of action for businesses that are strained financially as a result of the impact of COVID-19. COVID-19, a term that was not part of most members’ vocabulary a mere two months ago, is now the unwanted commandeer of conversations. Self-isolation, social distancing, WFH (working from home) and CC (conference call) have become part of our basic business language. But we must not forget to keep talking about the old reliable, tax. Continue to talk to Revenue, as early as possible, if you are now experiencing timely tax payment difficulties. This is one of their key messages. The other is to get tax returns in on time. At the time of writing, Revenue’s message to businesses strained financially as a result of the impact of COVID-19 is that they will work to resolve tax payment difficulties. Viable businesses that experience cash flow difficulties have long been encouraged by Revenue to engage with them as early as possible. Often, entering a phased payment arrangement is the appropriate practical step to deal with outstanding tax payments. In fact, at the end of 2019, over 6,300 business had such arrangements in place covering €73 million in tax debt, according to Revenue. Revenue will only agree to a phased payment arrangement provided the relevant tax returns are filed with them, the tax due is fully calculated, the business is viable and there is early and honest engagement. Applications for such an arrangement can be made via the Revenue Online Service (ROS). Supporting documents will be required; the volume of documentation depends on the level of outstanding tax payments. A down-payment must be made, which can range from 25-40% of the total tax payment, which may include interest. Agents can apply on behalf of their clients via ROS. Applications are typically responded to within two weeks; in many cases, arrangements are up and running in a matter of days. Responding to the difficulties arising from the impacts of COVID-19, Revenue has implemented specific measures for small- and medium-sized enterprises (SMEs) experiencing trading difficulties. Perhaps the most important being that interest will not be applied to late tax payments of VAT for the January/February period (due by 23 March) or employer PAYE liabilities for the months of February and March. Any future similar suspension will be considered at the relevant time, Revenue say. For other businesses experiencing temporary cash flow or trading difficulties, the advice from Revenue is to contact the Collector-General’s office directly or the appropriate Revenue division. Revenue has also suspended all debt enforcement activity, for now. Current tax clearance status is expected to remain in place for all businesses over the coming months.  And in an effort to ease the burden on households, Revenue also announced the deferral of certain local tax payments (annual Debit Instruction/Single Debit Authority) to 21 May from 21 March. As of now, there is no statement from Revenue on dealing with other taxes such as corporation tax. In this unprecedented turbulent environment, protecting the tax receipts must be one of the priorities for Government. It is hoped that any dip in tax receipts will be confined to 2020. However, as long as we continue to talk about COVID-19 and suffer the impacts, we must also continue to talk to Revenue. Kim Doyle FCA, AITI-CTA, is Tax Manager at Chartered Accountants Ireland.

Economic forecasting can be a difficult business, especially when you consider the ‘unknown uncertainties’ the world is currently facing, writes Annette Hughes.  Businesses do not like uncertainty but, at present, that is the prevailing economic theme. An uncertain political situation, ongoing Brexit negotiations and the recent coronavirus outbreak remind us how vulnerable the economy can be to external shocks. Those in the business of economic forecasting understand this vulnerability very well. The purpose of an economic forecast is to measure the impact of ‘known uncertainties’ on future economic performance, but the future is unpredictable and this is further complicated by the ‘unknown uncertainties’ we now face.  Economists, in making their projections for economic growth in 2020, would not have been aware of the coronavirus outbreak until the first reports of a cluster of cases were identified on 31 December 2019 in Wuhan, China. The rapid and continuing escalation of COVID-19 has led economists to revise their economic forecasts downwards, as the initial output contractions in China begin to be felt around the world. It remains unclear what the full effects will be on the movement of people and goods, and economic activity, while the response of policymakers is evolving on a daily basis. Global economy In early March, the OECD reported on the considerable human suffering and major economic disruption that had resulted from COVID-19. OECD global growth in 2020 was revised downwards, by around 0.5 percentage points to 2.4%, from an already weak forecast of 2.9%. The adverse impacts on confidence, financial markets, the travel sector and disruptions to supply chains were all factors contributing to the downward revision. However, without knowledge of the full impact of the virus, the OECD acknowledged that, should the outbreak be more intense and last longer than predicted, global growth could drop to 1.5%. Economists at Oxford Economics believe that the virus will result in Q1 2020 being the first global contraction since Q1 2009, with overall growth of 2% for the year, the slowest pace in the last decade. Irish economy The OECD forecast for economic growth in the euro area was revised downwards by 0.3 percentage points to 0.8% in 2020, although, given that the spread to Europe did not materialise until February, this forecast is likely to be subject to further downside risks.  Ireland has an open economy reliant on international trade and global markets to support economic growth. Ireland and its economy accounts for just 0.4% of global GDP and 0.06% of the world’s population. However, it still remains vulnerable to the impact of the COVID-19 virus.  Economic growth in Ireland will definitely be weaker than projected should the virus spread for an extended period. The main impacts are likely to be felt through supply chain disruptions, travel and tourism restrictions, and reduced mobility (affecting consumer spending and workers staying at home). There have already been reports of delays in the delivery of imported products in the construction sector, according to the Ulster Bank Construction Confidence Index. It has been acknowledged that Ireland will likely follow a pattern seen in other European countries and the Taoiseach’s measures to minimise the spread of COVID-19 could be significant, but much less than the economic and social consequences of acting too late. The flexibility that Irish businesses have demonstrated in dealing with evolving economic, political and social trends are acknowledged in EY’s February 2020 Economic Eye. EY Chief Economist, Neil Gibson, correctly pointed to the coronavirus outbreak as likely to damage global growth in 2020, but as a rapidly evolving situation, it is difficult to predict the full economic impact on the island of Ireland. The closure of many public institutions and private businesses in the Republic of Ireland will no doubt further slow growth across the island, but the sectoral and regional impact will vary greatly. It important to remember, however, that this is first and foremost a human crisis, and we must think about people first. Moving away from GDP numbers, we must look at what business, governments and individuals can do together to help get us get through this incredibly difficult period.  Clearly, these are unprecedented times and taking such developments into account makes economic forecasting a difficult business.   Annette Hughes is a Director at EY-DKM Economic Advisory.

Cormac Lucey helps you turbo-charge your ability to identify and absorb relevant information in three easy steps. A close friend of mine is a retired journalist. We were in school together for several years in the 1970s. He went into journalism; I went into accountancy. In sixth year, our school won the Leinster Senior Schools cup in rugby for the first time in decades. My pal kept a copy of the following day’s Irish Independent, complete with match coverage. It disappeared under the mountain of detritus we are all at risk of gathering. Then it re-emerged after both parents had died, and the family home was put up for sale. What struck Peter, in the early part of this century, was just how thin that 1978 edition of the Independent was compared to the bulky newspapers we have today. Ironically, our newspapers are bigger and better than ever before, even as they face going down under the online onslaught. In 1978, nobody was at real risk of information overload. If anything, we suffered from information poverty back then. Today, however, we are forced to deal with an abundance of information. Separating the informational wheat from the chaff is critically important today, as each of us could be submerged in the flow of information pouring our way. I read a lot – both online and in print – and have three key rules for managing the information flow I face. Rule 1: Learn to speed read and put it into practice The average best-seller we might take with us on holidays has about 400 words on each page. It is said that President John F. Kennedy could read 2,000 words per minute, equivalent to five pages per minute. I find that hard to believe. But with a disciplined approach, it should be possible to read at speeds of 500-600 words per minute regularly. What are the core elements of speed-reading? Here is a speed speed-reading course: a) Develop the good habit of reading in a smooth rhythm; abandon the bad habit of disrupting that rhythm by occasionally going back to reread a passage; b) Instead of visually absorbing single words, get into the habit of absorbing several (three to five) words with each glance; c) Measure your reading speed when you’re reading a book and focus on getting that speed up; and d) Practice reading some trashy material at an incredibly fast pace. Then, when you read regular content, you’ll find yourself chomping at the bit speed-wise, just like when you come off the motorway and chomp at the bit at the outrageously slow speed limits then imposed. Rule 2: Focus When you read something, you are reading it for a purpose. Be deliberate about that purpose. If I’m reading a newspaper, I want useful information and I want entertainment. I also want to limit the amount of time I devote to reading the paper. I am certainly not going to read all of it. The paper owes you a duty – you owe the paper no duty. Similarly, just because you have started to read a book does not mean you are duty-bound to complete it. Our time and attention are limited. If a book is boring, tedious or just getting you down, discard it and choose another. That book may deserve the dismissive review: “Once I put it down, I couldn’t pick it up!” Rule 3: Discriminate among preferred providers I follow several financial websites closely: RTE.ie – click on “Business”, “Broker Reports” and “Goodbody” and you will be directed to a comprehensive review of the previous day’s business and economic news refracted through the prism of its implications for corporate value. Google “McKinsey on finance” and you will be directed to the website of the management consultants’ quarterly report on corporate finance themes. Each quarter, five or six issues are considered in a succinct and intellectually well-founded manner with a focus on drawing actionable conclusions. Google “Damodaran online”, and you will land at the website of Aswath Damodaran, Professor of Finance at the Stern School of New York University. This site features models, including lots of detailed valuation models; data, including important sectoral cost of capital data; and Damodaran’s blog, where he analytically considers important current financial topics. Cormac Lucey FCA is an economic commentator and lecturer at Chartered Accountants Ireland.

With advice comes responsibility as almost all advice has consequences, writes Des Peelo. As a Chartered Accountant, whether in professional or commercial life, our qualification is relied on by others for knowledge and experience when we provide advice. Advice brings responsibility, as almost all advice has consequences. A course of action undertaken, an investment made, a decision taken, a matter rectified, a risk addressed, and so on. The accountant can sometimes be unaware that somebody has interpreted a comment or course of action as advice. Even responding to a casual enquiry can be an everyday hazard in a complicated and regulatory world. Letter of engagement I, in common with other professional advisers, have experienced clients or circumstances where it is later claimed that advice was wrong or inadequate. Thankfully, none developed into legal claims – though I have acted as an expert witness in many such cases. Common factors in these claims included allegations that the client subsequently raised an issue that was not within the original remit, or did not take the advice, or varied its implementation to suit a different purpose. It may not always be possible in everyday commercial situations, but it is invariably wise to have a clear letter of engagement (LOE) signed as accepted by the client in advance of undertaking the work. The real relevance is that the LOE can avoid any later claim of misunderstanding or ambiguity. The LOE can also state in advance what is to be excluded in the advice, as explained below. Create clarity In my experience, it is increasingly necessary to ensure that the recipient understands what the advice is not, as well as what it is. For example, that it is not legal advice, that it is not tax advice as may arise, or that the advice cannot be taken as reassurance to a third party (such as a bank or fellow investors) as to the standing or validity of the circumstances relating to the advice. The advice is for the recipient alone, and there is no responsibility to third parties. The subsequent written advice to the client may then state: “This advice is provided in accordance with the signed letter of engagement (LOE), dated 1 April 2020. For good order, a copy of the LOE is attached to this letter”. Chinese walls Experience suggests that most professional indemnity claims for negligence arise through allegations of omission. In other words, some aspect was overlooked or understated by the adviser and should have been appropriately addressed. This, of course, enters into the grey area of opinion of which there is little legal definition beyond a simplistic analysis as to what your peer group would have done in the circumstances. In the ordinary course of events, a Chartered Accountant is unlikely to face a conflict of interest in giving advice – although a wary eye is necessary for Ireland’s relatively small business network. Others may, however, experience conflicts of interest in a different way, as explained by a straight-faced story from the rarefied world of high art dealings. In a frank memoir, a retired director of a major auction house in London explained  ‘Chinese walls’ as follows: on one side of the auction house, the potential seller of a painting is reassured as to this being the best time to sell a painting. On the other side, in the same auction house, the potential purchaser is reassured as to the wisdom of investing to future advantage in the same painting. Be brave Good advice is always worth it, but the advice might be unexpected. A senior politician, for example, battered by the vagaries of the world, remarked to me that if you are ‘being an eejit’, the best advice sometimes comes when the adviser tells you so in plain terms. And how much should one charge for all this great advice? A wise PR lady, not entirely tongue-in-cheek, once told me that advice should always be reassuringly expensive. Des Peelo FCA is the author of The Valuation of Businesses and Shares, which is published by Chartered Accountants Ireland and now in its second edition.

Joan Curry, who recently joined the first female majority board of IFAC, discusses her varied career in the public sector. Joan Curry is Head of Finance at the Department of Transport, Tourism & Sport; ex-chair of the Chartered Accountants Ireland Public Sector Interest Group; member of Council at Chartered Accountants Ireland; and a board member of the International Federation of Accountants. Add to that six children and a keen golfing interest, and one could reasonably say that Joan leads a hectic life. In terms of her professional career, Joan had an interest in figures and accountancy from an early age. “I was the eldest of five children, and my mother and father both worked outside the home,” she recalled. “We swam and my father was treasurer of the swimming club. I helped him with the money, so it was a subliminal introduction really.” At school, Joan and three friends were the first pupils of Mercy College in Coolock to do higher-level maths. “It didn’t occur to us that we were trailblazers or anything like that,” she said. We just did what we did. I got an honour in maths in the Leaving Cert, so I suppose I always had a head for figures.” No college fun Joan planned to do a commerce degree in university when fate took a hand. “My brother’s football coach was an accountant and he called to the house one evening and convinced me to become a Chartered Accountant by working for an accountancy firm,” Joan said. “I took that advice and qualified with Smith Lawlor & Co., now JPA Brenson Lawlor in 1988.” Joan completed her training contract and qualified in 1988 when she moved into industry with Nokia with a desire to gain commercial experience. Nokia was a tissue paper manufacturer, and Kittensoft was its major brand. The company was a big player in the Irish retail FMCG scene at that time. As a financial accountant, Joan was responsible for budget and financial management including the preparation of accounts for consolidation into the European group headquarters and, subsequently, for the United States when it became part of the James River and Georgia Pacific corporations. Looking back, Joan reflected: “In practice, you are engaging with clients annually. There is more continuity in industry; you are part of decisions and can see their cause and effect and results.” It wasn’t all work in Nokia, however. Joan made up for the lack of fun at college as she met her husband in Nokia. “I married the site engineer after he left the company,” she said. A wide and varied career Joan has spent the past 18 years in the civil service in several roles that have broadened her capacities. She gained extensive experience in multi-disciplinary environments and brings all of that to bear in her current financial role with the Department of Transport, Tourism & Sport. Joan’s career in the public sector began with a contract role as a project accountant for the Department of Finance, as it implemented the JD Edwards financial management system. This was later extended into a contract of indefinite duration. In 2011, Joan moved to the Department of Public Expenditure & Reform on its formation to work in the Government Accounting unit, the standard-setter for government accounts in Ireland. There, she built relationships with colleagues in both finance and internal audit in each government department. Joan also spent three years as Head of Corporate Services for the National Shared Services Office. A role that Joan particularly enjoyed while working in the Department of Public Expenditure & Reform was a secondment as Secretary to the Public Service Pay Commission. This was a non-financial role, utterly different to anything she had done before, and involved supporting the Commission in its examination of recruitment and retention matters in specific areas of the public service. Joan managed the research, contribution and report-writing phases of the Commission’s work and engaged with the public sector employer, union and other stakeholders in the process. Current role Joan joined the Department of Transport, Tourism and Sport as Head of Finance in August 2019 and her role covers “vote and expenditure management, financial management, risk management, and responsibility for the procurement framework”. The use of the term “vote” serves to highlight the differences between the public sector and private sector accounting practices. This refers to the financial allocation made to a department or public body by the government, which is approved by a vote of the Oireachtas. The differences run deeper than mere terminology, however. The State doesn’t utilise private sector financial reporting standards, nor does it prepare its accounts on an accrual basis. Joan is a firm believer that the State’s move to re-examine this area and consider the use of accrual accounting is the right one. A change in policy here would be consistent with OECD guidance on the matter Joan stressed. Joan reflects that, in contrast to government accounting, local authorities have been engaged in an advanced form of accrual accounting since 2002. They prepare their accounts in accordance with an accounting code of practice, which complies with FRS102 where applicable. The Department of Transport, Tourism and Sport has an oversight role in various bodies under its aegis and at times, Joan’s expertise is called on by departmental colleagues directly involved in the oversight function. “It extends into the transport sector – public transport, roads, local authorities, and then we have the tourism industry and Fáilte Ireland and Tourism Ireland and the breadth of activity they are involved in to attract tourists. It goes right down to sport and grants to local clubs. I didn’t realise the breadth of services involved until I started working in the department.” And unsurprisingly, there is no such thing as a typical workday for Joan. “There is a huge variety on any given day,” she said. “I try to look at it in its different compartments – vote management, financial management, risk management, and procurement. Those are the four key areas I try to interface with every day.” At the time of writing, the COVID-19 pandemic was taking up much of Joan’s time. “We have been engaged in emergency planning and contingency planning and arranging for staff to work remotely and so on. The staff here have been really fantastic,” Joan said.  Joan is also working daily with critical stakeholders on liquidity funding strategies to keep key transport systems and supply chains going – getting people and goods to where they are needed in light of COVID-19. Volunteer work Joan is a Fellow of the Institute and a Member of Council at Chartered Accountants Ireland. She is also a member and former Chair of the Public Sector Interest Group and recently became a member of the International Federation of Accountants (IFAC). Joan describes her initial introduction to the Institute’s Council as the result of ‘a tap on the shoulder’. “I was approached to run for Council and I agreed. It all goes back to networks. I play in the Chartered Accountants Golf Society and have made some great contacts there. Within an hour of seeking nominations, I had ten nominations and I only needed seven.” Joan’s next step came when she was asked to go forward for the IFAC board. “I was nominated by Chartered Accountants Ireland and was short-listed. I went for the interview and was fortunate enough to be invited to join the board. Being there for Ireland is an immense honour, and being able to contribute that public service perspective is also very important to me.” The 23-member board includes 12 males and 13 females. “It’s gender-balanced, and the overall diversity is great,” she said. “I have four girls and two boys, and I have always stressed to them the importance of equality.” Life outside the office In Joan’s view, one of the best things about working in the public service is the scope offered to do other things. “The support I have received over the years has been invaluable,” she said. “I got better at managing my time and learned that I don’t need to be involved in everything that’s going on. I have improved at delegating and saying no. I have also learned that the time you spend on yourself is good for you and your employer. If you’re not feeling good, you won’t perform at your best.” When her children – Aisling, Ciara, Dearbhla, Shane, Sonia and Karl – are not keeping Joan busy with various college, school and extracurricular activities, she can be found on the golf course. “It’s the perfect place for headspace for me,” she concludes. “And a little competition as well!”

David Duffy discusses recent Irish, EU and UK VAT developments. Irish VAT updates VAT compensation scheme for charities eBrief 21/20 contains updated guidance in respect of the VAT compensation scheme for charities. This scheme is now open in respect of VAT incurred by charities in 2019. The deadline for submitting such claims is 30 June 2020. Charities must satisfy various conditions to make a valid claim and there is a formula for calculating the claim. The total fund available for all claims is capped at €5 million and, if exceeded, this amount will be allocated between valid claims on a pro rata basis. There have been no changes to the scheme, but the guidance provides further details on the terms “total income” and “qualifying income”, which are relevant to the calculation of claims under the scheme. VAT on telecom services On 31 January 2020, the Tax Appeals Commission (TAC) published a determination in a case (16TACD2020) involving a mobile telephone operator (the appellant). The case considered the VAT treatment of the appellant’s cancellation charges, unused data, and non-EU roaming on bill-pay mobile phone services, as well as the time limit for making VAT reclaims. The appellant was unsuccessful in arguing for a VAT refund on three counts but did succeed in a claim for a VAT refund on non-EU roaming services. The key points of TAC’s determination were as follows: The appellant was liable for VAT on cancellation charges to bill-pay customers for early termination of their contracts. This followed a similar decision by the Court of Justice of the EU (CJEU) in MEO (C-295/17). The appellant was also liable for VAT in respect of customers’ unused data included in the price of their bundle. The appellant’s argument that VAT refunds should extend back further than four years was also rejected. The appellant had sought to argue that it should be equivalent to the five-year refund period available for other taxes, but this was rejected. The appellant was successful in arguing for a VAT refund to the extent that its bill-pay customers used its telecom services outside the EU. Revenue had sought to argue that refunds for non-EU roaming should only be available for pre-pay customers, but this was rejected by the TAC. While the case is principally relevant to the telecoms sector, some of the principles regarding cancellation charges and equal treatment could have wider application. The determination (which is available on the TAC’s website) is, therefore, a useful read. Time limits The question of time limits for VAT refunds was also the subject of a TAC determination (03TACD2020). The taxpayer was engaged in a VAT-exempt business but was entitled to partial VAT recovery on its dual-use input costs to the extent that its services were to non-EU recipients. However, during 2009, the taxpayer had not been aware of its entitlement to partial VAT recovery and therefore had not taken any VAT recovery on its costs. Upon becoming aware of this entitlement, the taxpayer submitted a claim on 31 December 2013, which included VAT incurred before 1 November 2009, which would ordinarily be outside the four-year time limit. The taxpayer sought to argue that this VAT was still within the four-year time limit because, in the taxpayer’s view, it was an adjustment of its partial exemption VAT recovery rate review for 2009 (which fell due after 31 December 2009). However, the TAC disagreed as the taxpayer had not applied any VAT recovery rate to dual-use inputs during 2009. The TAC concluded that only VAT incurred from 1 November 2009 onwards was correctly included in the claim submitted on 31 December 2013. While the facts of the case are quite specific, it emphasises the importance of following the appropriate procedures and paying close attention to time limits when submitting a claim for any historic VAT. EU VAT updates VAT treatment of boat moorings Segler (C-715/18) was a German non-profit-making association whose objective was to promote sailing and motorised water sports. It maintained boat moorings, some of which were used by members of the association and others were used by guests. Segler applied the reduced rate of German VAT as it believed the letting of the moorings fell within the meaning of “accommodation provided in hotels and similar establishments, including the provision of holiday accommodation and the letting of places on camping or caravan sites”. The German tax authorities argued that the standard rate of VAT should instead apply. The CJEU concluded that the reduced rate could not apply, as the letting of the boat mooring was not intrinsically linked to the concept of “accommodation”. UK VAT updates Budget 2020 The UK’s Chancellor of the Exchequer announced several VAT measures in Budget 2020, which was presented to the UK parliament on 11 March 2020. The key updates are summarised below: The 0% rate of VAT will apply to e-books and online newspapers, magazines and journals with effect from 1 December 2020, bringing them in line with the rate applying in the UK to physical books and publications. The standard 20% rate has applied heretofore. Interestingly, however, the UK Upper Tribunal had already held that the 0% rate correctly applied to such publications in the Newscorp decision, but HMRC has indicated an intention to appeal that decision. Consequently, the position applying before 1 December 2020 remains to be clarified. As a cash flow-relieving measure following the implementation of Brexit, postponed accounting for import VAT will be introduced for all goods imported into the UK with effect from 1 January 2021. Postponed VAT accounting will enable UK VAT-registered businesses to self-account for import VAT under the reverse charge mechanism. From January 2021, 0% VAT will apply to women’s sanitary products. David Duffy FCA, AITI Chartered Tax Advisor, is Indirect Tax Partner at KPMG.

Raymond Donegan and Ted Webb outline the four steps to a successful sale. As a business owner, selling up is probably the most significant decision you will make in your working life. It is a difficult and often emotional process. However, with the right guidance, it can be navigated over a period of roughly six to eight months to everyone’s satisfaction. Four steps, if followed, will maximise the potential for a successful sale. Step 1: Preparation  The preparation stage sets the tone for the sale. At this point, your corporate finance adviser will draft an information memorandum with your assistance. This should be a compelling document, which will generally contain an executive summary and details of: business history; products or services offered; customers and market; future opportunities; overview of management, staff and facilities; and recent and forecast financial information. In addition to drafting the information memorandum, a comprehensive list of potential buyers should be drawn up by you and your corporate finance adviser. It is better to sell a business that is enjoying a period of growth with some suggestion of future growth remaining for the next owner. Also, if you want or need to retire by a specific date, it is best not to leave the sale too late. Specific areas of preparation to address include financial items such as fixed assets, working capital such as debtors and creditors, operating expenses, and shareholder costs. It is also crucial to assess the status of non-financial items, including management structure, intellectual property, tax status, and the business’ online presence. Step 2: Value the business and make initial contact with potential buyers The key drivers of value from a potential buyer’s perspective are the ability of your business to generate cash and its future risk and growth prospects. Several valuation methodologies can be used, including EBITDA (earnings before interest, tax, depreciation and amortisation) multiples, EBIT (earnings before interest and tax) multiples, and discounted cash flow. Once value has been established, it is time to contact potential buyers. The decision on which parties to approach will depend on the nature of your business and the type of sale process you are planning. Generally, the best result comes from a controlled auction process where several potential buyers are contacted. The benefit of this process is that, by the time the sale goes through, you will definitively know the market value of the business. Your corporate finance adviser will ensure that interested potential buyers receive an information memorandum after signing a confidentiality agreement. Prospective buyers then have approximately four weeks to respond with non-binding indicative offers, and once the offers are received, you and your adviser will decide whom to meet. Step 3: Management presentations and preferred buyer selection There is no substitute for face-to-face meetings; this is arguably the most critical stage of the entire sales process. Afterwards, your corporate finance adviser will request revised offers from interested parties. Now, you and your corporate finance adviser will decide on the preferred party. The price will play a large part in that decision, but other vital factors may include the structure of the deal and bidders’ plans for the future. You will naturally prefer to be paid in full immediately, whereas the buyer will prefer to pay over time. Ways to reach a compromise include: Deferred consideration: when an element of the consideration is paid after an agreed period; and Earnout: when the payment of deferred consideration is conditional on achieving specific financial targets such as an agreed level of sales or profits, or non-financial milestones such as renewing a contract. Once a preferred party is chosen, the heads of terms will be negotiated. This is a short document, which details the key financial and commercial terms of the deal. Step 4: Due diligence and negotiations The final stage of the process involves the preferred party undertaking due diligence on the target business, and all parties negotiating the necessary legal documents to conclude the transaction. Due diligence is akin to an invasive audit, but it is a necessary evil. It usually lasts six to eight weeks and covers several areas including financial and tax, commercial, products/services, legal/intellectual property, human resources and pensions, environmental, technical and property. Remember, the potential buyer’s view of your business can be positively reinforced if you can provide the information promptly. After three to four weeks of due diligence, the buyer’s lawyer will produce the first draft of the legal documents that will give effect to the sale. Assuming you are selling a company, these documents will include a share purchase agreement and a tax deed but may also feature other documents.  Conclusion  Selling a business is a complicated, lengthy exercise that most business owners will only do once in their lifetime. There can be a significant difference between a well-run, competitive sale process and a poorly executed transaction. An experienced team of advisers will know the best techniques to enhance value and mitigate risk for you and your business. Only by engaging with such a team can you expect to maximise your position.   Raymond Donegan is Director and Head of Family Businesses at IBI Corporate Finance. Ted Webb FCA is Managing Director at IBI Corporate Finance.