Revenue has updated the Tax and Duty Manual which provides guidance on the operation of Ireland’s bilateral Advance Pricing Agreement (APA) programme. The programme provides certainty to taxpayers regarding the process involved in applying for a bilateral APA and the ongoing reporting and administrative requirements once an APA has been entered into. The updated Guidelines take into account international best practice in relation to bilateral APAs as identified by the OECD Forum on Tax Administration (September 2022).  The main changes to the guidelines are as follows:  Including prospective years in an APA term in situations where most of the years proposed to be covered by an APA have passed by the time an agreement is reached between the competent authorities (Part 3.3).  Position to be adopted by a taxpayer in corporation tax returns filed in the period from when an APA application is submitted to Revenue until the APA is concluded (Part 4).  Electronic submission of APA applications (Part 4.2 and Part 8).  Timeframe for Revenue to make a decision in relation to the acceptance of an APA application into the APA programme (Part 4.2).  Annual reporting requirements (Part 4.5).  Timeframe for a taxpayer to notify Revenue in situations where it ceases to apply the terms of an APA (Part 4.5).  Amendment by a taxpayer, where necessary, of previously filed tax returns following the revision, revocation or cancellation of an APA (Part 5).  Relationship between transfer pricing audit and the APA process (Part 6). 

After a decade of little change, the tax regime for research and development in the UK has undergone a ‘credit style’ revamp, writes Liam McHenry  New research and development (R&D) rules for businesses in the UK with an accounting period beginning on or after 1 April 2024 have commenced. These entities are within the remit of the newly merged, research and development expenditure credit (REDC) expenditure scheme – with the exception of “highly R&D-intensive companies”. Companies with over 30 percent of their yearly expenditure qualifying for R&D tax relief can still claim under a restricted version of the SME scheme. Given this high bar, however, it is likely that only small technology start-ups will qualify.  For everyone else, the new rate will provide a benefit worth about 15p per £1 of qualifying expenditure, so not all is lost for those exiting the SME scheme, as a generous tax incentive remains for potential claimants. Reduced complexity? The stated aim of the merged scheme is to reduce complexity for claimants and their advisors. With two schemes remaining post-merger, however, the new scheme is actually more complex than its predecessor.  Subcontracted expenditure had previously been excluded under the RDEC scheme in any meaningful way. Under the new merged scheme, a new system has been put in place with the aim of rewarding whichever party decides to undertake the R&D activity. This adds a new dimension to determining the eligibility of qualifying R&D expenditure insofar as a subcontractor will now need to determine whether they believe their customer knew in advance that a project would require R&D activity. The theory is that this approach will remove the potential for both parties to claim on the same project, but it is easy to see how ambiguity might arise. When agreeing the terms of contracts with customers, claimants must pay additional attention to any clauses relating to intellectual property (IP) generation and whether they indicate that R&D will be required. Taking care at this stage could help claimants identify and preserve their right to claim the corresponding tax relief. Overseas expenditure A restriction on overseas expenditure was also introduced on 1 April 2024. Unless there is a compelling reason why the expenditure could not reasonably have been incurred in the UK, it will not be eligible for inclusion in the claim. However, recognising the unique position of Northern Ireland and its significant integration with the neighbouring Republic of Ireland, claimants can bypass this new restriction. By doing so, they could gain up to a maximum additional benefit of £250,000 every three years. This may require some additional administration, but it is still a welcome reprieve from the restriction, which would have been costly. Increased scrutiny This article offers a summary of the main rule changes coming into effect this month. In reality, there are more of which claimants should be aware. His Majesty's Revenue & Customs (HMRC) has dramatically increased its compliance efforts, with recent revelations from the Public Affairs Committee indicating that upwards of 20 percent of new R&D claims are now under scrutiny. While this fact alone should not be a major concern, it is worth noting that this increased scrutiny often comes with an aggressive stance, beginning with the assumption that R&D claims should be disallowed. The experience of one claimant to another can dramatically vary depending on which caseworker is allocated to the enquiry. Regardless, opening an enquiry can be a prolonged process before a conclusion can be reached. In the event of an unsuccessful enquiry defence, HMRC will be obligated to consider whether any penalties should be levied, depending on whether they determine that the claim was prepared carelessly. In addition, depending on the level of disclosure provided in previous claims made in recent years, HMRC can (and is actively encouraged to) look into these previous claims beyond the normal enquiry window. Planning ahead The implementation of the new R&D tax rules marks a significant shift for businesses heavily reliant on R&D activities for growth and innovation. As businesses adapt to the new regime, strategic planning and collaboration with tax advisors will be essential in maximising the benefits. Liam McHenry is Director of Tax at Grant Thornton

Recent comments by the CEO of America’s biggest bank suggest AGMs are losing power and relevance. David W Duffy delves into the details Annual general meetings (AGMs) are crucial in corporate governance. They are a legal necessity and provide a valuable opportunity for shareholders to speak to leaders. These days, however, criticism is surfacing in some companies that AGMs are becoming a nuisance. Activist pressure So, what exactly is turning the tide on AGMs and their perceived value? In short, the activist pressure exerted recently at some very high profile AGMs.  At Disney’s most recent AGM in early April, for example, shareholders were encouraged to vote in favour of a proposal that would see the entertainment giant pay for services for people choosing to detransition. The Disney proposition had no material impact on the company’s strategy, and JPMorgan Chase Chief Executive Jamie Dimon took issue.  According to Fortune, Dimon claimed that AGMs were falling victim to “spiralling frivolousness”, dominated by lobbyists, activists and interest groups, which bear little relation to the company’s strategic direction.  There’s no “right or wrong” for a statement like this; it is really just a measure of whether or not other corporate leaders agree.  The leaders of some companies could easily agree with Dimon, especially those at the helm of companies whose AGMs are rife with debate. In companies where AGMs are quieter – sometimes to the point of formality – leaders may not need to worry. Importantly, board members and other stakeholders must remember that anything is possible at an AGM. They could, for example: serve as a hotbed for debate; become a forum for topics considered politically charged (anything from geopolitics to religion to social issues to climate change); feature shareholder proposals put forward solely to make a point, win support or express anger; or seem like a waste of time to corporate leaders because of all the above.  None of this is a given, however. It is far more likely in bigger, global companies – household names consumers feel are so big that their impact stretches beyond their mission statement. In these scenarios, stakeholders generally want the company to take a stance on every political issue, and shareholder proposals at AGMs are part of this. Are AGMs fit for purpose? The threat of any of the above scenarios may mean that some companies’ AGMs are not fit for purpose. It depends on the goals of the people who attend. Companies can’t just get rid of AGMs, however.  AGMs are a cornerstone of business. They often serve as the one opportunity many small shareholders have to speak to the company’s leaders – and, by law, this chance must always be available.  An organisation considering changing its AGM must first examine its articles of association. These are usually where AGM rules like voting procedures and scheduling are found. Beyond this, there may be wiggle room. AGM options It is advisable that leaders and participants accept that the AGM will be active, full of differing opinions and multiple proposals that go nowhere, making it feel like a distraction. If you approach the situation with this prepared mindset, you might find it easier to register the elements of impactful processes beneath the noise.  It’s also advisable to get proactive about issues. You may be better prepared if you anticipate the problems that shareholders are likely to raise and discuss them at the executive and board levels. In the process, you could gain critical insights that shape your understanding of shareholder opinions and frame a more robust conversation. However, if an organisation still wants to change their AGM – and the articles of association allow it – boards can change things like length, the requirement for in-person attendance and the time balance between corporate leaders and shareholders. It must be noted, though, that if a board changes any of these elements, it may appear to be attempting to be creating barriers to debate and shareholders might not respond well. The bright side Many companies have seen their AGMs dominated by activist noise in recent years. While this issue can be addressed by making changes, the bottom line is that the AGM as a concept is here to stay. Organisations should view the “noise” as an invitation to develop relationship management skills and stay on top of emerging trends. These are hugely important for good corporate leaders, and a busy AGM could be the time to flex those muscles. David W Duffy is a founder of the Corporate Governance Institute

Following constructive engagement with Government departments, the Institute has secured a change which should make the process of hiring non-EEA accountants by way of a Critical Skills Employment Permit (CSEP) less burdensome. In recent months, member firms have reported to us a significant increase in the need to apply for bridging CSEP visas for their workers while their residency status is being processed.  New rules announced this week should substantially reduce this requirement. CSEP’s are valid for a period of two years, after which employees holding this permit can typically go on to apply for continued residence in Ireland under what is known as a Stamp 4. Since November 2023, in order to secure a Stamp 4, the holder of a CSEP was required to complete a minimum of 21-months' work following the issuance of a Stamp 1 (a permission to work visa). Delays in issuing a Stamp 1 meant that member firms have had to apply for bridging CSEPs because the 2-year CSEP would expire before accountants could meet the 21-month work requirement. Amplifying our members concerns, we called for a reinstatement of the previous system whereby a Stamp 4 could be secured 21 months from the commencement of employment in the State - rather than from the commencement of a Stamp 1. Following a sustained period of engagement with department officials, this suggestion was formally adopted by the Department of Justice with immediate effect – details of the changes can be found here. Chartered accountants are currently listed on the Government’s Critical Skills Occupations List – meaning that due to capacity shortages in the industry, suitable candidates from non-EEA jurisdictions are eligible to apply for a Critical Skills Employment Permit (CSEP) to come and work in the profession here. The Department of Enterprise, Trade and Employment and the Department of Justice have jurisdiction over the issuance of CSEP’s and Stamp 4 residence permits. Further information on CSEPs can be found here on gov.ie. The previous changes announced by the Department of Enterprise, Trade and Employment (DETE) on November 15 2023 can be found here. Should you have an issue which you would like to bring to the attention of the public policy team, please reach out via our email publicpolicy@charteredaccountants.ie

From the Institute's  Professional Accounting team : Introduction On 15 March 2024, the Irish Department of Enterprise, Trade and Employment (DETE ) published the General Scheme of Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 (“General Scheme”) to make amendments to Companies Act 2014 (CA 2014).Please click here for the press release on the General Scheme. Click here for the text of the publication and the regulatory impact analysis of the General Scheme. Readers may recall that DETE conducted a public consultation on proposals to enhance the CA 2014 (“Consultation”) last year. The Institute responded to that consultation and you can click here to see the response. The General Scheme is wide ranging, and we set out below some of the proposed provisions which if enacted may be of interest to members. Please also refer to the Corporate Enforcement Authority’s press release and accompanying note dated 15 March 2024 which provides detailed information on proposed enhancements to the CEA’s powers and some proposed new offences. Electronic meetings There are proposals to put electronic participation in meetings on a permanent statutory footing and to include provisions for notices, quorum and proceedings and virtual voting at such meetings. Readers may recall that in December 2023 these provisions which were introduced during the pandemic were temporarily extended to 31 December 2024. Audit exemption A change to the rules regarding the loss of audit exemption for companies which fail to file their annual return on time is proposed. It is proposed that if a small company fails to file its annual return with the Companies Registration Office for a second or subsequent time within a period of 5 consecutive years, then the company will lose its ability to claim audit exemption. The current legal position is that the exemption is lost after one failure to file. This proposal is welcomed by the Institute which has lobbied for some time for the change. The Institute recognises the importance of companies complying with legal obligations as regards the publication of financial information. However, it considers that the loss of audit exemption for two years for a late filing to be an overly punitive sanction. Provisions relating to receivers Some changes relating to receivers are proposed. New provisions are proposed requiring the provision of further information on Form E8 which is filed upon the receiver’s appointment. The further information includes details of nature of assets, date and nature of appointment, information regarding future trading where practicable, and other prescribed information. Also, it is proposed that the time limits for filing the receiver’s abstract (Form E9) upon cessation of acting as receiver and notice of cessation of receiver (Form E11) will now be 7 days. Provisions concerning entitlement to remuneration of receivers are proposed in line with existing provisions in the CA 2014 concerning entitlement of liquidators to remuneration. Members, creditors, and prescribed persons can request information regarding receivers’ terms and fees, and requests must be dealt with within 7 days. It is proposed to extend the existing power of the court to fix remuneration of a receiver. Matters to be taken into account for receivers under these proposals include time spent, complexity of the case, exceptional responsibility on receiver, effectiveness of receiver, value, and nature of the property. This mirrors existing provisions for remuneration for liquidators in the CA 2014. DETE had suggested in the Consultation last year that there is merit in amending the CA 2014 to provide that receivers are subject to minimum qualifications along the lines of the qualification requirements for liquidators as set out in the CA 2014. However, there are no such proposals in the General Scheme. Provisions relating to SCARP The provisions relating to SCARP are largely technical amendments and corrections of the Companies (Rescue Process for Small and Micro Companies) Act 2021. Much of the amendment is also to make provision to give notifications “in prescribed form” to the Registrar of Companies and court.  An amendment to the section on the process adviser’s (PA) remuneration costs and expenses proposes that the court can ask the PA for a written report where the PA did not make use of the services of the staff and facilities of the company to which they were appointed where the court is considering any matter relating to the PA’s costs, expenses, and remuneration. Winding up Most of the amendments are to make provision to give notifications “in prescribed form” to the Registrar of Companies. The only proposal of note is an amendment to the section of the CA 2014 which imposes an obligation on a liquidator to apply to the Court for the restriction of a director or directors of an insolvent company. The liquidator may be relieved of this obligation by the CEA. The proposed amendment is to make explicit that the obligation on liquidators endures all the way through to the end, which includes to the end of all appeals proceedings against restriction orders. Strike off and restoration Three new grounds for involuntary strike off are proposed, failure to notify of a change in registered office, no current company secretary recorded and failure to deliver beneficial ownership information. There are some consequential amendments proposed on foot of the three new proposed strike off grounds. These three new proposed grounds will not give rise to disqualification of the directors and the new proposals include the steps to be taken to avert continuation of the strike off under the three new grounds. Provisions relating to the Corporate Enforcement Authority Changes include for example mechanisms for the CEA to receive details of restriction and disqualification orders and reliefs to restricted persons more quickly than at present. An amendment is proposed to section 393 of the CA 2014. This section requires an auditor to notify the CEA if during the course of an audit the auditor comes into possession of information leading them to form the opinion that there are reasonable grounds to believe a category 1 or 2 offence under the CA 2014 has been committed. The amendment requires the auditor to furnish the CEA with copy books and documents or extracts (the current provisions require grant of access to books and documents) and a signed assurance from the audit partner that they are exact copies. New offences of obstruction and intimidation are proposed. Please see the CEA press statement issued 15 March 2024 and accompanying note for a fuller summary of the proposals of the General Scheme which relate to the CEA. Provisions relating to IAASA It is proposed that IAASA will have power to issue an interim notice imposing restrictions on a statutory auditor that a possible relevant contravention has been committed and that it is appropriate in the public interest to do so .Relevant contraventions could be but are not limited to failure to obtain sufficient evidence to support an issued audited opinion, repeated significant deficiencies in standards of audit work or significant breach(es) of independence or ethics rules. IAASA will invite and consider submissions received from the restricted person and will within 21 days either confirm vary or revoke the interim notice. The restrictions remain in place until the investigation is complete. An interim notice will be reviewed every 6 months or a shorter period and automatically expires after 18 months unless a further interim notice is issued. IAASA will be required to make regulations regarding procedures to be followed under this proposal. Other Other miscellaneous proposals which might be of interest is a section whereby a company can provide voluntary information in its annual return on gender balance of its board of directors. The information would be collected for statistical purposes only. There are also proposals for multi located execution of documents and a proposed amendment so that weekends and public holidays are excluded from the time counted towards the minimum 48 hour notice required to appoint proxies. This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.  

In Irish news, we bring you an update from the recent meeting of the main Tax Administration Liaison Committee (TALC) and Revenue has provided an important update regarding R&D claims for 2022 and 2023. In UK news, HMRC has halted the changes and restrictions to various helplines that were announced earlier this week, and today is your last opportunity to provide information to us on VAT margin scheme vehicles brought into Northern Ireland from Great Britain before 1 May 2023 which remain unsold. In International news, the European Commission has commenced a public consultation seeking feedback on the Directive on Tax Dispute Resolution.  Ireland Read our update from the recent meeting of the main Tax Administration Liaison Committee (TALC). Revenue has provided an important update regarding R&D claims for 2022 and 2023. UK The changes and restrictions announced by HMRC earlier this week in respect of various helplines will now not go ahead. Today is your last opportunity to provide information to us on VAT margin scheme vehicles brought into Northern Ireland from Great Britain before 1 May 2023 which remain unsold. International The European Commission has commenced a public consultation seeking feedback on the Directive on Tax Dispute Resolution. 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 Ulster Society says reduced Corporation Tax rate plus renewed FDI interest could kick start local economy The Chairman of Chartered Accountants Ulster Society has said that Northern Ireland’s unique post-Brexit trading position could be Northern Ireland’s key economic advantage in the year ahead. Speaking to 400 guests at the Ulster Society’s Annual Dinner, sponsored by Danske Bank and MCS Group tonight (20 March), Paul Millar said that chartered accountants across Northern Ireland had identified the key opportunities for the economy, with dual market access to the UK and EU rating highly. Another key opportunity identified by Ulster Society members was the potential to attract investment and boost job creation through a reduced Corporation Tax rate. Paul Millar said: “Two-thirds of our members believe that Northern Ireland can benefit from devolved Corporation Tax powers and a lower rate to match that of the Republic of Ireland.  “If we can combine dual UK/EU market access, a competitive Corporation Tax rate, plus take advantage of the renewed interest in investment into Northern Ireland from the USA and elsewhere, it could be a game changer. The talent is here, the success stories are here, and the potential is right here. “With the right approach, an entrepreneurial mindset and everyone pulling in the right direction we have a tremendous opportunity to be a unique business hub. If we can take that opportunity, it means a better standard of living for everyone with better job, public services and better prospects. “We live in straitened times, but we need to find solutions. We need to focus on opportunities because they are there. Strategic initiatives could have a big part to play.” Mr Millar’s speech also highlighted the role of political leadership and the need to build on the confidence generated by the restoration of the Northern Ireland Assembly: “It’s really positive that we now have restored political leadership back at Stormont, ready to face the challenge. We also have a great opportunity to create a resurgence in economic optimism and determination, spurred on by renewed leadership and a clear vision for the future. “Encouraging entrepreneurship is not just about financial gains. It's about empowering individuals, revitalising communities, and shaping a brighter future for generations to come. “Northern Ireland is a great place to live and a great place to do business. There is so much potential and much to be positive about. We need to work together, with the right mindset, to take the opportunity that is in front of us.” Providing entertainment for guests at the Ulster Society Annual Dinner were adventurer, entrepreneur and author Debra Searle MVO MBE, and one of Northern Ireland’s most highly regarded performers Peter Corry MBE. The Chartered Accountants Ulster Society’s Annual Dinner took place at Titanic Belfast and was attended by 400 members and their business guests.  

In this month’s public policy update, our policy team outlines its ongoing lobbying efforts on the issue of childcare, its representations to Government on how a change in process is impacting Critical Skills Employment Permit holders and the Institute’s recent submission to the Department of Social Protection on pensions auto enrolment. Advocating for improved childcare in the Republic of Ireland and Northern Ireland Following the publication of our recent policy paper Supporting Working Parents – The case for better childcare policy in the Republic of Ireland and Northern Ireland, efforts have been ongoing to engage with policymakers across the island of Ireland on this important issue. Last week, our public policy team met with officials from the Department of Children, Equality, Disability, Integration and Youth to discuss our members feedback on the issue and in particular to emphasise the need to improve capacity across the sector. Meetings have also been held with opposition parties on the issue including Sinn Fein so as to ensure our members voice is heard across the political spectrum. Following the restoration of the Northern Ireland Assembly, meetings have also been held with legislators from all political parties as work toward developing a new childcare strategy for the region advances. As part of these discussions, our policy team have emphasised the cost pressures our Northern Ireland members are facing with respect to obtaining adequate childcare and in particular the need to abolish the £10,000 cap on tax-free childcare. Our policy team will continue to advocate on the issue of childcare throughout the year and welcome members feedback on the issue which can be sent to publicpolicy@charteredaccountants.ie. Changes with Critical Skills Employment Permit / Stamp 4 process causing issues for member firms Following recent changes announced by the Department of Enterprise, Trade and Employment (DETE) on November 15 2023, holders of Critical Skills Employment Permits (CSEP) must now apply directly to the Department of Justice or their local immigration office (if living outside Dublin) for a Stamp 4 permission to continue to reside and work in Ireland following the expiration of their CSEP. To obtain a Stamp 4 on or after the 30 November 2023, CSEP holders must complete a minimum of 21-months' work following the issuance of a Stamp 1. In effect, this means that the eligibility to meet the 21-month test does not start from the day the worker started to work physically in Ireland (which was the case under the previous system); instead, the clock starts from the date the Stamp 1 is issued (which could be several weeks later). These changes have had an enormous impact on CSEP holders and their employers, who in many cases bear the financial cost of the visa application process on behalf of their employees. Specifically, given that the 21-month period required to apply for a Stamp 4 is now only deemed to have commenced after the CSEP holder obtains a Stamp 1, many CSEP holders are finding that their 2-year CSEP expires before they have met the 21-month period needed to obtain a Stamp 4. This is the result of extensive processing times, with some employees reporting up to 18 weeks wait for Stamp 1 applications, particularly in regional areas. Such employees cannot possibly meet the 21-month period before their CSEP expires, as they are not able to obtain their Stamp 1 within the parameters of their CSEP. As a result,  many member firms have reported the need to apply for a ‘bridging’ CSEP to cover these employees until they can meet the necessary 21-month residency period, which in turn has created additional financial and administration costs.   Our policy team have written to officials in both the Department of Justice and DETE to highlight this issue and to request a meeting to discuss how the new system may be adjusted to reduce the financial and administrative burden it has placed on our members. Representations to Government on Pensions Auto Enrolment The Institute’s policy team have also recently written to the Department of Social Protection on the need to allow businesses adequate time to plan for the introduction of pensions auto-enrolment. While the Institute has long been clear in our support for the introduction of auto-enrolment as a mechanism for increasing private pension coverage in the State, payroll services providers tell us that a lead-in time of at least 18 months would be required to properly adapt to this significant change. In order for auto enrolment to be a success, we are calling on the Government to adopt the recommendation of the Joint Committee on Social Protection (in its pre-legislative scrutiny report) that there be a two-year lead-in period, following the relevant legislation being signed into law, that allows businesses time to adequately prepare for the implementation of auto enrolment. In addition to the above, the policy team re-emphasised the Institute’s position that any new scheme of auto-enrolment should facilitate the existing and well established model of tax relief at both standard and marginal rates for pension contributions, rather than introduce a new scheme of tax relief, as proposed.

Chartered Accountants Ireland has today outlined a series of concrete steps aimed at making the provision of childcare across the island of Ireland work for both providers and parents, which could leave working parents up to €4,500 a year better off and free up vital working capacity in the economy. Last month, the Institute published data underscoring the challenge that the costs and availability of childcare is presenting to businesses and working parents.  Today, its paper ‘Supporting Working Parents – The case for better childcare policy’ sets out the core economic arguments for improved childcare provision as well as shining a light on the experiences of working parents seeking childcare.  Currently places for children with unregistered childminders do not attract the same National Childcare Scheme (NCS) funding for parents as creche places, which are highly limited and often difficult to secure. This means a mother-of-two on an average annual wage of €45,000, and paying €24,000 per year for childcare, is left with just €235 per week after paying taxes and childcare fees – an amount which makes returning to the workforce a difficult economic proposition. Expediting the Government’s plans to enable parents who use childminders that are not registered with Tusla to access the NCS would give parents of up to 80,000 children easier access to subsidised childcare. Commenting, Tax & Public Policy Lead, Chartered Accountants Ireland, Cróna Clohisey said  “We know what the challenges are for providers and parents and we welcome the upcoming increases to NCS subsidies. But as a mother of two young children, I’ve seen first-hand the difficulties in securing creche places, the scramble to find a childminder, and the quest to make full-time employment viable for parents. The policy tools to address these are already largely in place, so it is time to move to solutions mode. “Implementation and awareness are the two major hurdles that need to be overcome, and bolder interventions are now required if effective change is to be achieved in the childcare space. That is where we are now focusing our attention in our proposals to the Government.”  Chartered Accountants Ireland is calling on the Government to: Expedite plans to enable parents who use childminders that are not registered with Tusla, to access the National Childcare Scheme, giving parents of up to 80,000 children easier access to subsidised childcare. Streamline Core Funding. The introduction of Core Funding represented a new and different way of providing funding to the sector, but it could be greatly streamlined by: Increase funding, capital investment and grant support to the sector to more adequately reflect the true cost of providing childcare services. Importantly, these funding levels should not be static but regularly reviewed and updated in line with economic and inflationary changes. Increase awareness: engagement across the Institute’s membership has pointed to a lack of awareness of supports already in place. The Institute is calling on the government to launch an improved campaign of awareness to working parents that is integrated into and promoted by the public health system. Commenting, President of Chartered Accountants Ireland, Sinead Donovan said  “Allowing childcare challenges to persist constricts labour market capacity, narrows the tax base through lower labour market participation, and maintains the gender pay gap by making it more difficult for parents, proven to be predominantly women, to return to the workforce full time. This is a generational issue, it’s hitting men and women in different but equally real ways. “Currently, Chartered Accountants Ireland members are being asked to vote on a proposal to amalgamate with CPA Ireland which, if passed, would create the largest single accountancy body on the island of Ireland. Issues such as childcare can only truly be solved through a whole-of-government strategy, which is why a single, strong voice for the profession will be crucial in the years to come.” ENDS  Notes to editors Chartered Accountants Ireland’s paper, Supporting Working Parents – The case for better childcare policy, will be published on the Chartered Accountants website on Tuesday 13 February. Chartered Accountants Ireland members are currently being asked to vote on a proposal to amalgamate with CPA Ireland which, if passed, would create the largest single accountancy body on the island of Ireland. An online vote closes at 1pm on Wednesday 14 February with a final, in-person opportunity to vote at the Chartered Accountants Ireland SGM on Wednesday 21 February. More information on the proposal and how to vote is available on the Chartered Accountants Ireland website.

Chartered Accountants Ireland has outlined a series of concrete steps aimed at making the provision of childcare across the island of Ireland work for both providers and parents, which could leave working parents financially better off and free up vital working capacity in the economy. Our paper ‘Supporting Working Parents – The case for better childcare policy’ sets out the core economic arguments for improved childcare provision as well as shining a light on the experiences of working parents seeking childcare. 

Earlier this year the FRC published an update to its Ethical Standard for auditors, effective from 15 December 2024. The updated ethical standard simplifies the existing ethical standard and provided additional clarity in a limited number of areas. the new standard takes into account recent revisions made to the international IESBA Code of Ethics. there is a new targeted restriction on fees from entities related by a single controlling party. Following feedback to their consultation, the FRC have amended the proposals to ensure that the requirements in the standard are better targeted and proportionate. For example, additional requirements in respect of ethical breach reporting by audit firms to the regulator have been removed. With regard to tax services provided to the controlling shareholders of unlisted companies the FRC is enhancing the independence risk assessment around these services rather than specifically prohibiting them. Alongside the revised Ethical Standard, the FRC has also released guidance for auditors on the application of the Objective, Reasonable and Informed Third Party test, which forms a key part of many requirements in the Ethical Standard. Read the updated Ethical Standard. Read the feedback statement and impact statement. CAI responded to the FRC consultation and you can read our response here.  

Childcare reform key to greater female participation in workforce: two-thirds of members pay up to €2,000/ month for childcare Workers need certainty in tax system to reflect hybrid working norms and bring an end to pandemic experimentation period.    5 January 2024 – Stronger government action to improve childcare costs and availability would boost capacity in the workforce, according to a new policy paper published today by Chartered Accountants Ireland. The Next Financial Year: Building Capacity is the first of several policy papers that the Institute will publish this year on priority areas identified by Institute members which would support the economy.  The Institute is the largest and longest-established professional accountancy body on the island of Ireland.  It has 33,000 members, two-thirds of whom work in business. Published as an open letter to policymakers and legislators, the policy paper sets out recommendations on how Government can build capacity in the economy by: Enabling greater female participation in the workforce through targeted childcare reforms  Easing cost pressures for developers & landlords to stimulate housing supply  Giving certainty to workers on place of work & commuter costs in the tax system  Building digital capabilities & resilience for businesses to succeed  Childcare reform can unlock economic contribution of female professionals Institute members identified the steep cost and lack of availability of childcare as the biggest challenge facing working parents in the profession today, with two thirds of members currently paying up to €2,000 per month in childcare costs, and 16%, mostly female members, having to reduce their working hours to care for a child. Chartered Accountants Ireland highlights solutions available to Government to increase female labour market participation such as: Increased funding, capital investment and grant support to the sector to better match the cost of providing childcare services, to meet surging demand for places & to encourage providers to grow. Reform of National Childcare Subsidies (NCS) to encourage childminders to register with Tusla, giving parents of up to 80,000 children easier access to subsidised childcare. Sinead Donovan, President of Chartered Accountants Ireland, said: “For too long, policymakers have framed childcare policy as a social issue, not an economic one. Our evidence shows that affordable, quality childcare drives more sustainable, inclusive economic growth and competitiveness. Government’s ambition to tackle the provision of childcare is welcome for businesses in today’s tight labour market. Paving the way for greater female participation in the workforce should be a priority for policymakers in 2024.”  On housing, the policy paper identifies specific measures to ease cost pressures for developers and landlords to stimulate supply, including: A deferral of PAYE and VAT payments for developers and builders on salary, material, and other costs incurred during construction, to be payable as the units are sold. This would reduce development costs, ease cash-flow concerns and make investment more appealing.  Further encouraging private landlords to remain or move into the Irish market through the taxation system. Allowing Local Property Tax as a deduction against rental income and allowing non-resident landlords to collect rents directly from tenants, rather than through Revenue or a collection agent, could provide such an incentive. In the workplace, giving certainty to workers on how their place of work and commuter costs are to be treated in the tax system would put Ireland’s employment environment on a more progressive footing, and bring to an end the pandemic experimentation period. Measures proposed include:   Introducing a more flexible version of the TaxSaver Commuter Ticket Scheme, to offer tax relief on season tickets to commuters who only use public transport 2-3 days a week, reflecting new norms around hybrid working, while promoting public transport use.  Rules to establish a normal place of work, fundamental to the tax treatment of employee travel and subsistence reimbursements, should be updated to reflect the changed circumstances that hybrid working has created.  Digital skills are essential to meet current and future workforce needs. Building digital capabilities & resilience for businesses to succeed requires Government to do more to meet its target of 80% of adults having at least basic digital skills by 2030. The Institute recommends that the digital transformation of education and training focuses on schools, equipping children with the skills needed for the jobs of the future, underpinned by the Digital Strategy for Schools to 2027. Dr Brian Keegan, Director of Public Policy for Chartered Accountants Ireland, said: “In Building Capacity, Chartered Accountants Ireland has put forward practical recommendations to help our economy thrive. Our members have once again provided vital insights into the major societal and economic challenges that both businesses and employees are facing. Our recommendations reflect their experiences and realities.  “We welcome Government engagement with many of our policy proposals in the last year, but more needs to be done. Building capacity in our economy does not stop at the bricks and mortar of much-needed housing supply. It must include targeted measures that actively facilitate women who want to work, and reflect the reality of a more dispersed, and digital-first workplace if businesses are to succeed long-term. It is within Government’s gift to put in place measures to increase economic capacity across the board, and futureproof jobs for generations to come.” ENDS