Institute publishes new position paper “The Next Financial Year: Making Irish Business More Competitive”

Jul 17, 2020

Liquidity and cashflow are key concerns for one third of businesses in a post-Covid economy according to new data released today by Chartered Accountants Ireland from almost 2,000 members surveyed by the Institute on the island of Ireland.

With 33 percent of respondents reporting a need to overhaul their business model post-pandemic, businesses, in particular SMEs, have highlighted specific measures that can help in the period ahead, including:

  • One in four called for changes to company law to give businesses greater flexibility to navigate unprecedented circumstances like a pandemic
  • Almost half of those working in practice called for greater leniency on filing deadlines, interest and penalties
  • Digital transformation is a priority for 1 in 4 businesses post-Covid, with calls for accompanying digitalisation of government services
  • Longer term business supports post-Covid and the use of VAT rate decreases as short-term stimulus were raised by 28 percent of members, rising to 39 percent of those in practice.

The findings are released as the Institute publishes “The Next Financial Year: Making Irish Business More Competitive”, a new position paper which identifies pathways to a better business environment post-pandemic. Informed by extensive engagement with members working in practice, industry, SMEs and the public sector, the paper sets out proposals to create workable solutions and alternatives across a range of areas, including digitalisation, tax measures and business supports now open to Government / policymakers to consider. [Details below]

Commenting, Dr Brian Keegan, Director of Public Policy, Chartered Accountants Ireland said

“SMEs are fighting to stay afloat and post-pandemic, many will reimagine how they function or will pivot into new activities. Supports are currently based on the way that business has always been done, but with this changing, “The Next Financial Year” outlines a simplified, more flexible approach. 

“Now is not the time to rely on dogged and uncommercial approaches. Government policy must be focussed on providing maximum support and flexibility to businesses.” 

The proposals include an emphasis on digitalisation and ensuring government services and supports keep pace with changing business models post-pandemic, and the realities of operating as an SME at this time. These include: -

Digitalisation

Remote working has been one of the most visible signs of change since March. Many workers are now trusted to work productively from home where possible; and it is now acceptable to hold significant business meetings online. Chartered Accountants Ireland calls for the momentum to be maintained by increased support for the education and adoption of digital competencies across the business community through increased grant-funded programmes.

Government must also play its part in supporting digitalisation, namely:

  • full digitalisation of CRO services including the acceptance of electronic signatures and the electronic filing of documents to relieve the administrative burden and speed up processing,
  • changes to the Companies Act to allow all companies to hold virtual AGMs,
  • changes to the Companies Act to allow creditors meetings to be held by telephone and/or video conferencing,
  • full automation of the professional services withholding tax system so that the record of the tax withheld is generated in electronic format and automatically issued to Revenue,
  • pledge by Revenue to provide a MyEnquiries query response rate of five working days. 

Other key proposals include

  • extension of filing deadline for accounts due for 31 October to 31 December 2020 to 31 January 2021,
  • increase of the examinership period to 150 days,
  • simplification of existing support and funding schemes, especially those aimed at the SME sector, which are too onerous and complex to administer,
  • push by Government for increased share of the €750 billion EU Recovery and Resilience Fund to deliver grant support to the hospitality, tourism, leisure and retail sectors.

ENDS

Read Next Financial Year

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