Institute reacts to Autumn Statement announcements  17 November 2022 – Today’s Autumn Statement did little to support businesses and their employees through the tough times ahead, according to Chartered Accountants Ireland. The Institute, which represents over 5,200 members working in businesses and practices across Northern Ireland, commented as the Government announced its ‘Autumn Statement’ in Westminster, with the Chancellor acknowledging that the UK is in recession after the biggest monthly increase in inflation in over 40 years.  Commenting, Dr Brian Keegan, Director of Public Affairs, Chartered Accountants Ireland said,  “Businesses in Northern Ireland are feeling the effects of this inflationary crisis particularly acutely. These businesses are also dealing with continued uncertainty over trading arrangements in the context of the ongoing Protocol negotiations along with the absence of devolved government.  “We saw during the COVID-19 pandemic that the Government can react speedily at a time of crisis. As this crisis deepens, more needs to be done by the Government to develop and deliver much needed supports through the tax system. For many businesses, these could be a vital lifeline for survival and, ultimately, job protection.  “For example, the Government could reintroduce extended relief for trading losses, as it did during the pandemic. This would enable businesses to claim relief for losses much earlier which would generate vital tax refunds and improved cash flow. “Tax policy and the tax system can, and must, be used to not only build strong and sustainable economies but to provide crucial support via targeted interventions.” ENDS     

Despite the tough current climate, Budget 2023 made clear that action against climate change remains a priority for the government. Deirdre Hogan explains The Minister for Finance, Paschal Donohoe TD, delivered his Budget 2023 speech against a contrasting backdrop: the trilemma facing Irish businesses and individuals of energy, inflation and supply chains versus the recent positive reports on the exchequer finances. While the Budget’s focus was on solving the short-term cost of living crisis, the Minister noted that “climate change is one of the key challenges of our time”, indicating that the climate crisis remains a priority for the Government. Carbon tax As expected, carbon tax was increased by €7.50 from €41 to €48.50 per tonne of CO2. The carbon tax increase applies from 12 October 2022 for auto fuels but will be offset by a levy reduction, so we will not see a price increase. For all other fuels, carbon tax will increase from 1 May 2023.   Due to the current energy crisis, the government opted to extend the nine percent reduced rate applicable to electricity to February 2023 and maintain the excise reduction introduced last spring on marked gas oil, petrol, and diesel of five, 16 and 21 cents respectively, providing for costs in the winter months when energy usage will be at its highest.   The receipts from carbon tax are ringfenced to support wider sustainability initiatives and to support the costs of society and businesses in their transition from high carbon-emitting practices to more sustainable alternatives. Carbon tax is expected to generate €623 million in 2023, and almost 50 percent of that is earmarked to go into improving the energy efficiency of houses. Certain social welfare measures, such as Qualified Child Payment and the Fuel Allowance, will also be funded by the carbon tax. The Fuel Allowance is set to increase to €200 above the relevant State Pension Contributory, while those over 70 will see an increase in the Fuel Allowance to €500 for a single person and €1000 for a couple. Agriculture Farmers are set to receive €81 million to finance a new agri-climate rural environment scheme that will support up to 50,000 farmers who take action to improve biodiversity, climate, air, and water quality. Individuals Every household in Ireland will receive €600 in electricity credits over three €200 payments commencing pre-Christmas 2022. Businesses For businesses, a Temporary Business Energy Support Scheme is being introduced to assist businesses with their energy cost over the winter months. Other sustainability-related measures Other sustainability measures introduced include the announcement that €850 million will be spent on capital investment by the Department of the Environment, Climate and Communications in 2023 with over €337 million going towards grants for improved energy efficiency. This should fund over 37,000 home energy upgrades. In transport, the reduction of fares by 20 percent and the 50 percent reduction in the Youth Travel Card will both be extended until the end of 2023. Considering the current sustainability skills shortages in the labour market, the government provided for more than 2,000 apprenticeship places in areas around sustainable finance, green technology, and climate change. The above measures are all welcome and positive. However, there is more work to be done to help increase the pace of our climate or sustainability ambitions. Deirdre Hogan is Partner, Tax and Law from EY Ireland

  In this week’s sustainability/ESG bulletin, read about the climate and environmental aspects of Ireland’s Budget 2023, a new grant for Irish businesses to switch to renewable energy, a proposed EC ban on products made with forced labour, biodiversity and the EU’s calls for Ireland to halt peat cutting, and the UK Government’s independent review of its Net Zero Strategy, as well as articles and upcoming events.  Budget 2023 - climate and environmental impact Budget 2023 was announced on 27 September, with Minster for Finance, Pashcal Donohoe T.D., describing climate change as the one of the key challenges of our times. Read about the climate and environmental impacts of Budget 2023 here. Energy Update A Temporary Business Energy Support Scheme has been announced in Budget 2023 to assist businesses with their energy cost over the winter months. The Scheme will be open to businesses that carry on a Case I trade, are tax compliant and have experienced a significant increase (more than 50 percent) in their natural gas and electricity costs. Read more from our Tax Team here. New grant for businesses to switch to renewable energy Businesses looking to switch to renewable energy and reduce their energy bills can now apply to the Sustainable Energy Authority of Ireland (SEAI) for a grant for solar photovoltaic (pv) modules. The Non-Domestic Microgen Scheme (NDMS) provides financial assistance of up to €2,400 to help businesses and other sectors to install solar PV panels to generate electricity on site. BEIS commissions independent review of Net Zero The Business, Energy and Industrial Strategy (BEIS) Secretary of State has commissioned an independent review of the UK Government’s approach to delivering its net zero target. Reporting by the end of 2022, the review will ensure that delivering the net zero target does not place ‘undue burdens’ on businesses or consumers. EU, Ireland and biodiversity The EU Commission is calling on Ireland to take action to halt the continued cutting of peat in Special Areas of Conservation (SACs), designated to conserve raised bogs and blanket bogs under the Habitats Directive (Directive 1992/43/EEC). Their protection and restoration assist Ireland in meeting its climate change goals not only in keeping the peat in the ground, but also by avoiding the very high carbon and other air pollution emissions which are caused when peat is burnt as a fuel. Ireland has two months to respond and take necessary measures or the Commission may decide to refer Ireland to the Court of Justice of the European Union. Director General of the Environmental Protection Agency (EPA) Laura Burke reportedly described peatland restoration was a win-win for Ireland due to the many unique species on peatlands that can be protected. Ms Burke made the comments at the first meeting of Ireland’s Citizens' Assembly on Biodiversity Loss, which took place between 24 and 25 September in Dublin. The citizen’s assembly is the first such anywhere in the world focusing specifically on biodiversity loss. It is made up of 99 randomly selected Irish citizens who participate in the assembly's six-month programme of work. You can find out more on accountants and biodiversity in the Chartered Accountants Ireland Sustainability Hub. EC proposes banning products made with forced labour The European Commission has proposed to ban products made with forced labour on the EU market. The regulation is proposed to apply the ban to all products, including their components, all economic operators, economic sectors, stages of production or steps of value chains. Commenting, Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, said: “This proposal will make a real difference in tackling modern-day slavery, which affects millions of people around the globe.” You can read more about how accountants can join the fight against modern slavery on the Chartered Accountants Ireland Sustainability Hub.  Articles How to stop expensive heat leaking out your walls, windows and roof (Irish Times) Total funding for nature and biodiversity increased to more than €90m (Irish Times) Budget 2023 and Climate (Irish Independent) EU countries to back energy windfall levies, lock horns over gas price cap (RTE) Upcoming events Practical online workshop to help businesses understand and measure their carbon footprint (Carbon Footprinting – The Essentials) 5 October, 09.30-12.00pm. European Business & Nature Summit, 18-19 Oct The Business Case for Social and Circular (Register) 18 October, 12.00-1.00:  free, interactive webinar, experts Claire Downey, Chris MM Gordon and Kate van der Merwe discussing the social and circular economies, and how these alternative economic models are sources of innovation for mainstream business. Ireland Climate Finance Week, 17-21 Oct Ecosystems Knowledge Network, Natural Capital Finance & Investment Conference, 19 Oct (London) 20 Oct (Edinburgh)  Accountancy Europe, Sustainability Tax Systems, 25 Oct 9-11 GMT (10-12 CEST) You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our online Sustainability Centre.