Businesses need clever strategies to counter the cyber security challenges arising from the emergence of artificial intelligence, writes Puneet Kukreja The enormous power of generative artificial intelligence (GenAI) and large language models (LLMs) is just beginning to be understood. Its capacity to automate and accelerate business processes is only starting to be explored fully. As is the case with the deployment of any new technology, however, GenAI brings with it new cyber vulnerabilities. Cyber security matters are emerging as a key concern for technology leaders in Ireland amid the surge of AI-enabled cyber attacks. According to the EY Ireland Tech Leaders Outlook Survey 2024, the percentage of respondents who identified elevated cyber risks and the management of data protection and data flows as critical challenges has risen to 61 percent, up from 53 percent in 2023. Like the move to the cloud over a decade ago, the technology will create new cyber exposures and increase the attack surface for cyber criminals. For example, consideration needs to be given to securing the LLMs that gather and analyse data from various departments within the organisation. Ensuring the secure collection and transmission of this data is paramount, as is the fortification and security of the model itself. Monitoring emerging vulnerabilities closely This is not a reason to shy away from the technology. It is simply a reminder that it must be treated in the same way as any new IT investment from a cyber security point of view. Few organisations would risk connecting an unsecured PC or laptop to their network and the same approach should apply to AI. AI in cyber security is a double-edged sword. Where it empowers organisations with enhanced security capabilities, it also equips cyber criminals with similar tools by enabling individuals lacking advanced coding skills to leverage GenAI and create malicious code efficiently. With just a few prompts, GenAI can quickly generate code to identify and exploit vulnerabilities within an organisation's network, a task achievable within minutes. Change approach, not budget The good news for organisations and for Chief Information Security Officers (CISOs) is that they do not necessarily have to make significant new cyber security investments to restore the balance. The first step is to focus on what you already have. It is not a question of a new investment in cyber security, rather a new approach. In the same way as the cloud changed the shape of organisations’ networks and cyber defences had to be extended to cover the new expanded perimeter, existing defence systems will need modification to bring GenAI models within their orbit. Stolen credentials present a grave peril to organisations. To bolster security beyond passwords and multi-factor authentication (MFA), organisations can deploy AI-driven solutions that monitor user behaviour for unusual login patterns or atypical actions. These systems scrutinise user interactions with critical infrastructure and can swiftly detect unauthorised access attempts or transactions. Adopting this strategy enhances cyber security defences by integrating AI technology that can strengthen existing measures and counter new threats with speed and efficacy. Procurement processes will also play an important role. Organisations must ensure that they are not buying trouble when they invest in GenAI. They need to interrogate vendors very closely to ensure that the systems they are acquiring are secure and do not bring increased vulnerabilities with them. Of course, organisations will need to invest in upgrades to guard against the AI-driven increased sophistication of phishing and other cyberattacks, but this can be accommodated within normal cyber budgets. Finally, it cannot be emphasised enough that GenAI will not offer a silver bullet to organisations seeking to bolster their cyber defences. Humans: the last line of defence While organisations exploit the potential of advanced AI, they need to be mindful of the advent of new cyber vulnerabilities. Using existing cyber security measures to protect AI systems and applying rigorous due diligence to the purchase of such systems will help deal with the heightened threat, as will increased awareness of the new environment. While it undoubtedly offers the ability to further automate certain elements of cyber defence and to enhance threat detection, this will not replace any of the existing cyber security systems in place or the human as the last line of defence. Puneet Kukreja is Cyber Security Leader at EY

Check out the North West Society summer newsletter for details of upcoming events. Don't forget to book your space at our social evening on Tuesday, 2 July at 6pm in the Glasshouse Hotel, Sligo. This is a free member event but booking is essential.

In Irish news, Revenue has published statistics on the Debt Warehousing Scheme, and the Department of Finance and the Department of Public Expenditure, NDP Delivery and Reform report robust tax revenues in May’s Fiscal Monitor. In UK news, HMRC has launched a mailbox which can be used by members of recognised professional bodies to report concerns about potential rogue R&D tax relief advisers, and in this week’s miscellaneous updates, HMRC has published guidance on how in-scope multinational groups can register for the UK’s Pillar Two regime. In International news, the European Commission will continue to support the work of the Platform for Tax Good Governance.  Ireland Revenue has published a detailed statistical report on the Debt Warehousing Scheme. Department of Finance and the Department of Public Expenditure, NDP Delivery and Reform report robust tax revenues in May’s Fiscal Monitor. UK Read about the process which should be followed by members of recognised professional bodies to report concerns about potential rogue R&D tax relief advisers. In this week’s miscellaneous updates, HMRC has published guidance on how in-scope multinational groups can register for the UK’s Pillar Two regime. International European Commission will continue to support the work of the Platform for Tax Good Governance. Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax News by updating your preferences in MyAccount. You can also read this week’s EU exit corner here.

Institute highlights significant value AI will still add to the work of chartered accountants as automation is embraced   Chartered Accountants Ireland has been transforming its ACA qualification since 2017 using AI powered technologies to produce accountants of the future Institute notes today’s reports from Government on impact of AI on the Irish economy and workforce Chartered Accountants Ireland has highlighted how the profession is embracing the opportunities provided by automation and the critical role that AI is playing in moving its members’ work up the value chain. As businesses grapple with increased data volumes, complex regulations and a growing need for real-time information, AI is a game-changer for accountants by enabling them to focus on critical tasks such as analytics and advisory work.  Recent research from Chartered Accountants Worldwide shows that 75% of Irish financial decision makers surveyed do not ultimately believe that the value that chartered accountants provide could be replaced by automated systems, noting the importance of human judgement and decision making in their work.  The Institute’s comments come as the Department of Enterprise Trade and Employment and the Department of Finance launch new reports today on the impact of AI on the Irish economy and workforce.  Futureproofing education for the next generation  Since 2017, Chartered Accountants Ireland has been transforming the content and delivery of its ACA qualification, using AI powered technologies such as adaptive learning, robotic process automation (RPA), and data analytics. This transformation will continue to evolve.  Crona Clohisey, Director of Public Affairs at Chartered Accountants Ireland said:  “Over the past several years, our education team has carried out extensive research on the learning and training needs of the next generation to ensure that we are producing accountants of the future. The outputs have already been put into practice with students accessing the latest advances in technology and emerging accounting practices using a blend of the most up-to-date technology and teaching methods.  “These initiatives underscore the profession’s early adoption of the benefits AI can bring, and our members’ desire to adopt it in their work. By using AI to prepare accounts and to tackle and streamline more routine tasks, chartered accountants are embracing the positive disruption brought about by AI to focus more on providing strategic business insights for informed decision-making. Accountants who do so will thrive, so our curriculum fully recognises and embraces this reality. “We note the Government’s new reports in this important area, and we look forward to continuing the journey our profession has been on to date.” Chartered Accountants Ireland is Ireland’s leading professional accountancy body, representing almost 33,000 members and educating 7,000 students. Institute members provide leadership in business, the public sector and professional practice, bringing experience, expertise, and strict standards to their work for, and with, businesses in every sector.  Commenting, Barry Doyle, President of Chartered Accountants Ireland said:  “As with every technological development over the Institute’s 136-year history, the profession has always adapted and integrated innovations, with AI being just the latest. Moving from the traditional paper ledger to automated bookkeeping for example was transformative in the services that chartered accountants were able to offer. AI will ease the administrative burden on accountants and equip them with reliable data and insights to better serve their industries. “AI will not replace human judgement or strategic decision making, but critically it will throw up a series of ethical dilemmas for organisations in the coming months and years. Our members, bound by strict codes of ethics, are well positioned to navigate these; indeed, this goes to the heart of our dual mandate, working in the interests of both the economy and society.”  ENDS  Research referenced was commissioned by Chartered Accountants Worldwide and conducted by Edelman Data & Intelligence.

After discussions with the Northern Ireland Tax Committee about concerning behaviours of certain R&D tax relief advisers, the Institute contacted HMRC to suggest that a process could be developed to enable reporting of these concerns. In a recent meeting with HMRC, we were advised that a process is now available via what HMRC refer to as the Professional Bodies mailbox. The mailbox should only be used by members of a recognised tax or accountancy Professional Body to report concerns about a potential rogue R&D adviser and should not be used for any other purpose. As yet, HMRC has not specifically defined ‘recognised body’ for this purpose but has advised that Chartered Accountants Ireland falls within this.  When using this mailbox, please provide information about the potential breach only and not details of specific claims. HMRC will use this in their compliance strategy for R&D agents. Following receipt of the email, if HMRC requires any further information they will make contact with the person who made the initial report. The email address to use to make a report is wmbciandrprofessionalbodies@hmrc.gov.uk.   To date HMRC has not formally publicised this and is not planning to undertake any activity at the minute due to the pre-election period.  

In this week’s miscellaneous updates, HMRC is encouraging students to use the HMRC app to speed up student loan applications and the latest list of non-compliant employers under National Minimum Wage legislation has been published. HMRC’s latest schedule of live and recorded webinars for tax agents is available for booking. Spaces are limited, so take a look now and save your place. HMRC has also published meeting notes from the most recent Guidance Strategy Forum and guidance has now been issued on how in-scope multinational groups can register for the UK’s Pillar Two regime.  Use the HMRC app for student loan applications  HMRC is encouraging students to use the HMRC app to speed up student loan applications. With many students planning their next steps in life, those starting university in September can ‘tap the app’ to get National Insurance and tax information they need to complete their student finance applications, HMRC has said.  Anyone applying for a student loan for the 2024/25 academic year is encouraged to start their application now to get the essential details they need via the app. HMRC has produced a video to encourage students to save time by downloading the app.  Non-compliant employers named in latest National Minimum Wage list  The Department for Business and Trade has published its annual list of employers who failed to pay the National Minimum Wage (“NMW”). This year marks 25 years since the introduction of the NMW which was increased from 1 April 2024, as was the National Living Wage.   The press release accompanying the annual report explains that if workers suspect they are being underpaid, they can visit www.gov.uk/checkyourpay to find out more about what they can do. Workers can also call the acas helpline on 0300 123 1100 or visit their website for free, impartial and confidential advice or complain to HMRC at Pay and work rights helpline and complaints.  Registration for UK’s Pillar Two regime  HMRC has issued guidance on how in-scope multinational groups can register for the UK’s Pillar Two regime. Broadly, registration via HMRC’s online service is required within six months from the end of the first accounting period beginning on or after 31 December 2023 for in scope groups. This is the first phase of HMRC’s plans to ‘go live’ with the Pillar Two Top-up Taxes online service.  

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The most recent Trader Support Service Bulletin is also available, and the Windsor Framework Democratic Scrutiny Committee has published its first report.  Windsor Framework Democratic Scrutiny Committee publishes first report  The Windsor Framework Democratic Scrutiny Committee has published its first report which sets out the conclusions of its inquiry into a published replacement EU act on geographical indications for wine, spirit drinks and agricultural products. The main focus of the Committee’s inquiry was on the two conditions to be satisfied for the Stormont Brake to be used. You can read more about the contents of the report in the Brexit and Beyond 3 June 2024 newsletter published by the by the Northern Ireland Assembly’s EU Affairs Team.  The Windsor Framework Democratic Scrutiny Committee is a standing committee of the Northern Ireland Assembly. The Committee’s functions include:-  Examining and considering new EU acts and replacement EU acts;  Conducting inquiries and publishing reports in relation to replacement EU acts;  Engaging with businesses, civil society, and others in relation to replacement EU acts;  Engaging with the UK Government in relation to replacement EU acts;  Engaging with Ministers of Northern Ireland departments and the NI Executive in relation to replacement EU acts; and Dealing with other matters such as legislative proposals which may become new EU acts or replacement EU acts.  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:- Attending an inland border facility;  Data Element 2/3: Documents and Other Reference Codes (Union) of the Customs Declaration Service;  CDS Declaration Completion Instructions for Imports;  CDS BIRDS Declarations and Customs Clearance Request completion instructions;  Customs declarants and declaration volumes for international trade in 2023; and  Data Element 2/3 Documents and Other Reference Codes (National) of the Customs Declaration Service (CDS) 

This month’s tidbits cover an updated HMRC organisation chart and the latest fuel advisory rates. HM Revenue and Customs' organisation chart;  Advisory fuel rates;  Check genuine HMRC contact that uses more than one communication method;  Set up as a sole trader: step by step;  List of approved professional organisations and learned societies (List 3);  Disability, mental health and wellbeing at HM Revenue and Customs;  Compliance checks: Corresponding with HMRC electronically — CC/FS83;  Authorise a tax agent (64-8);  Apply for a refund of Class 2 National Insurance contributions (CA8480);  Updating your tax agent contact details with HMRC;  Register your limited company as a subcontractor or apply for gross payment status, or both;  Complaints from External Customers about the Conduct of HMRC staff Guidance;  Claim a refund of Income Tax deducted from savings and investments (R40);  Tell HMRC your company is dormant for Corporation Tax;  Named tax avoidance schemes, promoters, enablers, and suppliers;  Tell HMRC about your Employment Related Securities schemes;  Give temporary authorisation to allow HMRC to deal with your tax adviser (COMP1);  Claim to reduce payments on account;  Apply for a certificate confirming you will pay UK National Insurance when working temporarily abroad (CA3822);  Construction Industry Scheme: CIS 340;  Double Taxation Treaty Passport Scheme register;  Completing your Company Tax Return;  National Minimum Wage information for employers;  Tax-free savings newsletter 11; and  Employment Related Securities Bulletin 54 (February 2024). 

Effective dialogue between stakeholders enables informed and evidence-based policy-making. The Platform for Tax Good Governance was established in 2013 to bring together non-government and government stakeholders to tackle issues arising in the field of taxation, such as cross-border taxation, aggressive tax planning, double taxation, and double non-taxation. The Commission has decided to establish a new expert group to continue the work of the Platform for Tax Good Governance.

Revenue has updated the Tax and Duty Manual which provides guidance on the particulars to be supplied by new companies. The guidance has been updated in paragraph 1 to include information on the National Registrations Unit (formerly the National Companies Unit).

Section 124 SDCA 1999 provides for a charge to stamp duty on credit cards and charge cards. Revenue has updated the Stamp Duty Manual to provide further guidance on charge cards, specifically on company charge cards (paragraph 4.3).

Section 83DA SDCA 1999 provides for a full repayment of stamp duty paid on the acquisition of a residential property where, within 12 months of acquiring the property, the accountable person sells it to an eligible applicant within the meaning of the Affordable Housing Act 2021. Revenue has updated the Stamp Duty Manual which provides guidance on how to make a repayment claim under section 83DA SDCA 1999. The guidance has been updated to clarify that: Only those persons that are directly involved in the provision of affordable housing are eligible to claim a repayment under section 83DA Eligibility for a repayment will only arise if the sale of the property to an eligible applicant is charged to stamp duty under the CONVEYANCE or TRANSFER on sale head of charge.