In this week’s Sustainability/ESG bulletin read about the ESRI report on collective climate action, Ireland’s commitments to improve the sustainability of ICT procurement, and a report on Ireland’s recycling rates. Also covered is the 2027 cap on ETS2, responses to the EU-Mercosur trade deal, news from Europe on SME sustainability reporting, as well as a podcast, a new resource for finance professionals on building the business case for nature, articles, and updates to the Chartered Accountants Ireland Sustainability Centre.   Ireland news ESRI report finds cooperation in collective climate action key The ESRI has published a research bulletin, How to Encourage Collective Climate Action, including a review of 272 studies on how people behave in collective action problems specifically concerned with climate change. Some of these challenges are ‘multi-level coordination’ (i.e. that local action is needed to achieve national or international goals), uncertainty about which actions will be effective, the fact that consequences of today’s decisions will be most strongly felt by future generations, and the need to overcome psychological biases (e.g., status quo bias – a preference for things to stay as they are, even if the alternative is better).  The bulletin recommends showcasing success stories to inspire action, and using multiple, smaller-scale initiatives instead of one large strategy to help foster cooperation by aligning goals with local identities and benefits. Ireland joins international partnership aimed at promoting sustainable ICT procurement practices Ireland has entered into a voluntary agreement to co-operate with other bodies, internationally, to improve the sustainability of ICT procurement. The initiative – the Circular and Fair ICT Pact (CFIT) – is an international procurement-led partnership with a remit to accelerate circularity, fairness, and sustainability in the ICT sector. Joining the CFIT Pact fulfils a commitment in Buying Greener: Green Public Procurement Strategy and Action Plan 2024-2027, which aims drive the implementation of green and circular procurement practices across the public sector. Ireland shows no improvement in recycling rates in 10 years The Environmental Protection Agency (EPA) has published the Circular Economy and Waste Statistics Highlights Report 2022, which states that Ireland generated 15.7 million tonnes of waste in 2022. Although a decrease on 2021 figures, this still shows a growth of over 20% in the last decade, with construction activities accounting for half of all waste generated. Ireland is now almost certain to miss EU municipal and packaging recycling targets for 2025. Europe news The EU-Mercosur trade The EU-Mercosur trade deal has been signed by the EU and four Mercosur countries — Argentina, Brazil, Paraguay and Uruguay – following 25 years of negotiations. While the annex to the trade and sustainable development chapter of the deal commits parties to “prevent further deforestation and enhance efforts to stabilise or increase forest cover from 2030”, trade experts and environmental experts disagree, citing deforestation risks, among other negative impacts. Cap adopted for 2027 Emissions Trading System for buildings, road transport and small industry (ETS2) The EU Commission has adopted a decision establishing the EU-wide quantity of allowances issued under Emissions Trading System for buildings, road transport and small industries (ETS2) in 2027. The ETS2 is a new emissions trading system created as part of the 2023 revisions of the ETS Directive. It is separate from the existing EU ETS and will cover and address the CO2 emissions from fuel combustion in buildings, roadtransport and additional sectors (mainly small industries not covered by the existing EU ETS). This cap will amount to 1,036,288,784 allowances for 2027 and aims to contribute to the EU achieving its 2030 climate targets. Sustainability reporting for SMEs - update The European Financial Reporting Advisory Group (EFRAG) has delivered the Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME) to the European Commission. Based on market acceptance, the VSME has been designed to provide a standardised set of information in order to support ESG reporting for SMEs and boost access to finance. In 2025 EFRAG will issue support guides and educational material, among other initiatives. Accountancy Europe’s Sustainability update – December Covered in the recently published Accountancy Europe’s December Sustainability update are the EU Taxonomy FAQs on the usability of the  EU sustainable finance frameworks; updates on the Green Claims Directive; approval of ESG rating activities regulation; updates on the Deforestation Regulation, and ESMA’s proposal to phase in ESRS digital tagging requirements. World news The International Federation of Accountants (IFAC) and We Mean Business Coalition (WMBC), in partnership with the Global Accounting Alliance (GAA) have published Building Trust in Sustainability Reporting and Preparing for Assurance: Governance and Controls for Sustainability Information. The guide aims to provide a roadmap for organising and enhancing governance and control systems, and outlines steps to align sustainability and financial reporting in terms of quality, timing, and connectivity, and addresses challenges in sustainability reporting. The new guidance can be applied to the adoption of the IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board (ISSB) and jurisdictional requirements, including the European Sustainability Reporting Standards (ESRS). Articles In this blog post, Fergus Sharkey, Head of Business at the Sustainable Energy Authority of Ireland (SEAI), discusses the new suite of business energy grants available to SMEs to reduce costs, cut carbon emissions, and remain competitive (SEAI) Goldman Sachs’ Exit from the Climate Alliance: What’s Behind the Move? (Climate Action for Associations) Biodiversity hit to economies estimated at up to $25tn a year in landmark report (Financial Times) Paris to Replace Parking Spaces With Trees (Bloomberg) Podcast The financial case for sustainability: In this episode of Behind the Numbers from ICEAW, Philippa Lamb is joined by Richard Spencer, ICAEW Director of Sustainability and others  to discuss the challenge for accountants in ensuring that the quality of non-financial information matches that of financial information. New resource – The Business Case for Nature A4S (Accounting for Sustainability) has published The Business Case for Nature,  a guide explaining why nature is vital to business and offering clear steps and practical tips for developing the business case for organisations. The guide is part of the ‘A4S’s nature guidance series’, currently being created to give finance teams the practical guidance and tools to understand their nature-related impacts and dependencies, and to take steps to integrate nature-related risks and opportunities into business strategy and decision-making processes. Sustainability Centre Our Sustainability Centre has been updated to include links to sustainability webinars run by Chartered Accountants Ireland on the topic of sustainability.

The Financial Reporting Council (FRC) has published FRED 86 “Draft amendments to FRS 101 Reduced Disclosure Framework”, which has proposed some amendments to the FRS 101 standard. FRS 101 Reduced Disclosure Framework sets out an optional reduced disclosure framework that is available for the individual financial statements of subsidiaries and ultimate parents that otherwise apply the recognition, measurement and disclosure requirements of adopted IFRS. The standard is intended to enable cost effective financial reporting within groups to reduce reporting burdens, particularly for those applying IFRS Accounting Standards in their consolidated financial statements. Each year, the FRC carry out a review of the standard to decide whether FRS 101 should provide exemptions from new disclosure requirements or whether other consequential amendments are required. In FRED 86, the FRC have proposed some amendments to the standard, including; Amendments to exempt most qualifying entities from the disclosure requirements in IFRS 18 related to management-defined performance measures Amendments to exempt qualifying entities from the disclosure of a disaggregation of specified expenses classified by nature (as set out in paragraph 83(b) of IFRS 18), and An amendment to prevent entities from applying both FRS 101 and IFRS 19 The proposed amendments will now be subject to a consultation period, with comments welcomed by the FRC until 7 March 2025.

In Irish news, we bring you Revenue’s opening arrangements for the holiday period, and Revenue has published new guidance on leasing arrangements where the lessee can claim capital allowances on plant and machinery. In UK news, HMRC has advised of a delay in processing postal applications to register for an agent services account and we signpost readers to a new joint report on HMRC services which the Institute contributed a quote to. In International news, the Council has agreed on the directive proposal to introduce an electronic VAT exemption certificate.  Ireland See Revenue’s opening arrangements for the holiday period. Revenue has published new guidance on scenarios where lessees may claim capital allowances. UK HMRC has advised of a delay in processing postal applications to register for an agent services account. Read about the new joint report launched on HMRC services. International The Council has agreed on the directive proposal to introduce an electronic VAT exemption certificate. 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.          

Chartered Accountants Ireland North West Society raised an impressive €4,750 for Mary’s Meals at their annual Christmas lunch, held on Friday, 13th December, at the Glasshouse Hotel, Sligo. This generous donation will provide food for 251 children for a full year, demonstrating the extraordinary goodwill of the regional members and guests. The lunch brought together over 100 members and guests from the Society, which represents more than 850 chartered accountants across Sligo, Leitrim, Donegal, Roscommon, and Mayo. The event was generously supported by Finbarr Filan, Centra, Sligo and Vice Chair of the Irish Small and Medium Enterprise Association. Dolores Kiernan, Managing Director of Kiernan Steel—an award-winning multinational SME—was the special guest. She shared her inspiring journey of building her company out of economic necessity to support her family and growing it into a thriving global business. In his address, Finbarr Filan, Vice Chair of ISME, emphasised the critical role of the Accounting profession in helping business owners navigate an ever-changing operating environment. He highlighted the importance of Accountants ensuring clients are fully informed of developments, including policy and tax changes, to safeguard business success. Joan Curry, Vice President of Chartered Accountants Ireland, extended a warm welcome to members, both longstanding and new. She praised the North West Society for its vibrant community, exceptional engagement, and diverse events. She noted the presence of notable members, such as former National President Joe Gannon and Chartered Accountants Ireland Student Society Chair Caelainn McGonigle, as evidence of the Society’s strength and vitality. Chartered Accountants Ireland North West Society continues to foster a strong, supportive network for professionals across the region, organising events that inspire, educate, and bring the community together.

The European Commission has adopted an amendment of the 'de minimis' Regulation for the agricultural sector which exempts small amounts of support in the agricultural sector from State aid control. The revised Regulation includes an increase in the maximum de minimis ceiling and will apply until 31 December 2032.

The OECD has published a report which provides insights on public perceptions on tax, and public trust in tax systems from twenty-six countries, primarily in Latin America, but also from Africa and Asia.

The OECD has published a report on revenue statistics in Africa 2024. This annual publication compiles comparable tax revenue and non-tax revenue statistics for 36 African countries. This edition includes a special feature on facilitation and trust as drivers of voluntary tax compliance.

The European Council has agreed on the new directive proposal from the EU Commission to introduce an electronic tax certificate for VAT exemptions. 

Read our update on publications in this area since October 2023. Belarus: tax treaties, New Zealand: tax treaties, 2023 UK-New Zealand Memorandum of Arrangement — in force, Luxembourg: tax treaties, International Tax: UK Real Estate Investment Trusts (REIT) property income dividends — UK-Japan Double Taxation Convention, San Marino: tax treaties, Norway: tax treaties, Peru: tax treaties, Liechtenstein: tax treaties, and Romania: tax treaties.

The latest tidbits features updated guidance across a wide range of areas. Capital Gains Tax relief on gifts and similar transactions (Self Assessment helpsheet HS295), Tell HMRC that Inheritance Tax is due on a gift or trust (IHT100), Avoid and report internet scams and phishing, Check genuine HMRC contact that uses more than one communication method, Claim the residence nil rate band, HMRC email updates, videos and webinars for Self Assessment, Complain about HMRC, Tell HMRC your employment related securities scheme has ended, Submit your employment related securities return, Late registrations for employment related securities, Register your employment related securities scheme, Submit an Enterprise Management Incentives notification, How employment related securities work if you're an employer, Set up as a sole trader: step by step, Corporation Tax: penalty determinations (CT211 Notes), Tax when you get a pension, Apply for a certificate to confirm you will pay UK National Insurance while self-employed abroad temporarily (CA3837), Tax-Free Childcare, How Inheritance Tax works: thresholds, rules and allowances, Economic Crime Supervision Handbook, Pay voluntary Class 3 National Insurance, Redundancy: your rights, Tax on your private pension contributions, National Insurance rates and categories, Tax if you come to the UK, Tax on termination payments, Company Tax Returns, Check you're eligible for free childcare if you're working, Applying for probate, Business Leasing Manual, Collection of Student Loans Manual, and Tell HMRC that Inheritance Tax is due on the 10 year anniversary of a trust (IHT100d).

In this week’s post EU exit corner, we bring you the latest guidance updates and publications relevant in the post EU exit environment. The most recent Trader Support Service bulletin is also available as is the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs team. Miscellaneous guidance updates and publications Regulated aerodrome location codes for Data Element 5/23 of the Customs Declaration Service, Remote internal temporary storage facilities codes for Data Element 5/23 of the Customs Declaration Service, Maritime ports and wharves location codes for Data Element 5/23 of the Customs Declaration Service, Authorised Consignee Temporary Storage (ACTS) location codes for Data Element 5/23 of the Customs Declaration Service, and Lit of customs training providers.

In this week’s miscellaneous updates, HMRC has published a new Spotlight on using managed service company (MSC) products and the Government has published a new article which aims to provide more information on the controversial changes announced in the Budget to agricultural property relief (APR) for inheritance tax which will commence from April 2026. A new ‘side hustle’ tool has recently been published which aims to help individuals decide if income from online platforms needs to be declared to HMRC. The latest schedule of HMRC Talking Points live and recorded webinars for tax agents are available also for booking. Spaces are limited, so take a look now and save your place. And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected. Spotlight on using managed service companies In this Spotlight, HMRC is warning individuals against using MSC products. The Spotlight also explain the difference between MSC providers and traditional accountants. By way of reminder, the MSC rules aim to prevent an individual securing a tax advantage by providing their services to end clients through an intermediary, for example a company. A number of conditions must be met for a company to be treated as an MSC, including that an MSC provider is involved with the company.  The Spotlight also provides guidance on the meaning of ‘MSC’ and ‘MSC provider,’ contains an example and sets out the following features of a common MSC product:  advertisements, for example, internet ‘pop-ups,’ which promise to maximise the person’s take-home pay, marketing which encourages the person to work using a company by becoming a shareholder, taking a small salary and receiving dividends, services are standardised and are not tailored to the person’s circumstances, fees are variable, going up when the person is working and down when they are not, and software, which usually includes ‘suggestive navigation,’ directs the person to the most tax advantageous result.  Budget change to APR The Government has published an article intended to explain the changes to APR announced at the Autumn Budget 2024. The article sets out how the changes are expected to work and includes  examples. It also contains the government’s latest figures for how many estates will be affected. Last week the Institute released a Press Release with comments from the NI Tax Committee Chair Janette Burns that sets out the disproportionate and damaging impact that the Budget’s employment and capital taxes changes will have for businesses in Northern Ireland. New HMRC online ‘side hustle’ guidance and tool Ahead of the 2023/24 online self-assessment filing deadline, a new range of resources has recently been published by HMRC to assist taxpayers with income from what is often referred to as a ‘side-hustle’ in deciding if this income needs to be reported to HMRC. Firstly, HMRC has published a new online tool which individuals can use to check if they need to declare income from using an online marketplace or social media to: sell personal possessions, goods or services, create online content, or rent out property. This includes step-by-step questions to help individuals work out if they need to tell HMRC about this type of income. A new guidance page is also available which discusses a number of common examples. HMRC is keen to stress that the rules about what is taxable income are unchanged. From 1 January 2024, digital platform operators are required to collect and report to HMRC certain details about sellers on their platforms. The first reports are due by 31 January 2025.