Derarca Dennis explains how CFOs and finance functions are evolving and how organisations need to concentrate on talent management and diverse skillsets for sustained growth The EY Ireland CFO Survey 2023 has found that CFOs are playing an increasingly strategic role in their organisations. The role of the CFO has expanded, as has that of the finance function. It has evolved to become much more engaged with other areas of the business. This has brought with it a requirement for new skills as well as an increased focus on talent management. That need is reflected in the survey results, with developing future leaders, people management and talent retention continuing to be key areas of focus for the next two years for 60 percent of respondents. Reducing costs and compliance with sustainability regulations are also high on the agenda for most CFOs. While technology in the form of automation and advanced data analytics capabilities will undoubtedly be critically important in supporting the evolving role of the finance function, talent must remain a key area of focus if it is to fulfil its potential. Forty percent of the respondents said their priority for driving growth in the coming year is investing in upskilling existing talent in their organisations, while a further 34 percent said investing in new talent would be a priority. CFOs are focused on optimising the skillsets and talent they already have. This is particularly important in a very tight talent market where organisations of all sizes are experiencing significant levels of talent churn. That, in turn, leads to a loss of knowledge and skills, which are not easily replaced. A continuous learning curve A culture of continuous learning that empowers employees to work at their best and realise their potential is a proven talent retention strategy. Not only does it deliver increased job satisfaction, but it also opens new career opportunities within the organisation. However, organisations must also seek to automate the dull, repetitive tasks that have traditionally been undertaken by the finance function. Some of those tasks can also be shared with other areas of the organisation, such as treasury. Closer interaction between the treasury and finance functions can allow certain tasks to be shared, allowing finance professionals to focus on more value-added work. That work includes preparation for upcoming regulations and reporting requirements in areas such as sustainability. Finance leaders may also need to look at hybrid models to access the capability required to meet the finance function’s expanded role. One option is to fill capability gaps by co-sourcing the required skillsets through professional services partners. These organisations can offer a range of services from basic accounting activities, record-to-report activities, control monitoring and testing, through to day-to-day treasury operations, typically on a managed service basis. Need to invest in diverse talent At a higher level, the changing nature of finance reporting requires CFOs to master a diversity of skills, especially a deep understanding of non-financial factors. It is also leading to profound changes in the composition of finance teams. Future finance teams will be very different from those of today. Finance professionals will, of course, be at their core, but  finance teams will also draw upon a diverse talent pool to enable the function to play its full role as a strategic partner in the overall business and to embrace the potential of technology and data. Future finance teams will augment the traditional skills of finance professions with those of environmental, social and governance (ESG), and have data analysts, supply chain experts and process engineers. Having that wider expertise within the team will make it much more effective when it comes to creating greater efficiencies across the business and delivering long-term value to the organisation. Continued investment in diverse talent will, therefore, be imperative given the evolving and increasingly business-critical role of the finance function. Future-fit CFOs need to focus on: rethinking current operating models and mapping future touch points with other parts of the business, such as the treasury and ESG teams; talent management strategies aimed at upskilling existing employees and attracting and retaining new recruits; acquiring the diverse skills that will make the finance function fit for its increasingly strategic role in the organisation; leveraging existing capability within other departments to support the finance function; outsourcing or co-sourcing elements of the finance function to external partners on a managed service basis; and stemming employee turnover by ensuring that processes are future-ready and efficient enough to retain talent interest and engagement. The evolving role of CFOs and finance leaders in Ireland and of the teams they lead makes it imperative to focus on people management and the acquisition and retention of diverse skillsets. To ensure success, acquiring and retaining talent from both internal and external sources is crucial. Finance functions of the future will encompass a wide array of professionals whose skillsets will contribute to the organisation’s strategic growth. Ultimately, driving greater value for the organisation hinges upon empowering talented individuals with efficient, automated and data-driven processes across both financial and non-financial domains. Derarca Dennis is Assurance Partner at EY Ireland

In this week’s Sustainability/ESG bulletin, read about Chartered Accountants Ireland’s response to the call for expert evidence on the Climate Action Plan 2024. Also covered is Institute representation at the Commercial Built Environment Roadmap Working Group, the recent increase to the Non-Domestic Microgen Grant to install Solar PV panels, the launch of the first Biodiversity Leaders Programme for Irish Industry, sustainability-related updates from Europe, as well as the usual roundup of articles, resources and events. Chartered Accountants Ireland - Climate Action Plan 2024 Chartered Accountants Ireland has responded to the call for expert evidence by the Department of the Environment, Communications and Climate Action (DECC) to support and inform the preparation of the Climate Action Plan 2024. This plan is due for publication later this year. In the Institute’s response, Chartered Accountants Ireland identified challenges facing businesses - particularly SMEs -  in decarbonising, and recommended that the Government further investigates barriers to businesses wishing to take climate action. Also included in the response was a recommendation the Government highlights the risks and opportunities that climate change presents for businesses, as well as tax measures to support climate action. For more details on tax measures  see the Pre Budget Submission 2024 – Supporting Ireland’s Transition to a Sustainable Future of the Consultative Committee of Accounting Bodies – Ireland (CCAB-I). Chartered Accountants Ireland attends Commercial Built Environment Roadmap Working Group Institute representatives Stephen Lowry, Public Policy Manager and Joey Hayden, Conferencing & Facilities Manager, attended a meeting of the Government’s Commercial Built Environment Roadmap Working Group under the Heat and Built Environment Taskforce. This Taskforce was established to accelerate and drive delivery in relation to retrofitting, renewable heat, district heat and decarbonisation of the building stock. The meeting was to help inform the development of a Commercial Built Environment Roadmap as it relates to office users and the commercial landlord sector. The roadmap, which will set out the key existing and new policy interventions to achieve the objectives set out to reach Ireland’s targets in relation to the commercial buildings sector, is due to be published in September. Increased financial support for businesses – solar panels The Irish Government has announced an increase to the Non-Domestic Microgen Grant. This grant provides financial support for businesses, farms, schools, community centres or other non-profit organisations to install Solar PV panels to generate electricity on site. New funding ranges from €2,700 to €162,600, typically supporting 20-30 percent of the investment cost and reducing payback periods. The grant is administered by the Sustainable Energy Authority of Ireland (SEAI). Separately, the Department of the Environment, Climate and Communications has published its Policy Statement on Geothermal Energy for a Circular Economy, to raise awareness of the potential of geothermal energy, and its National Hydrogen Strategy, which sets out the strategic vision on the role that hydrogen will play in Ireland’s energy system. Summer Economic Statement – Climate Action Fund An additional €2¼ billion to spend over the period 2024-2026 has been announced in the Irish Government’s Summer Economic Statement 2023. The additional finance, from windfall corporation tax receipts, will be made available to boost delivery of critical capital infrastructure projects and make a contribution to the existing Climate Action Fund. New Retrofit Collection of Standards launched A new collection of standard recommendations has been published, compiled by the National Standards Authority of Ireland (NSAI). The Retrofit Collection aims to guide the delivery of high-quality, sustainable, and efficient building upgrades. Launching the collection at a Department of Enterprise Trade and Employment’s ‘Building Better Business’ event, Minister of State with responsibility for Employment Affairs and Retail Business, Neale Richmond TD stated that “[t]his collection of standards from NSAI provides a clear and reliable pathway for businesses in the construction sector, enabling them to confidently deliver high-quality retrofit installations to their customers.”  First Biodiversity Leaders Programme for Irish Industry launches   A new programme has launched that will facilitate professionals across all sectors to implement effective Biodiversity Action Plans. An eight-week course, led by Anja Murray, Broadcaster, Ecologist, and Programme Lead at Climate Ready Academy, the Biodiversity Leaders Programme was launched by the Climate Ready Academy (an initiative of Skillnet Ireland). It aims to guide and empower businesses to adopt responsible and sustainable practices that can promote and enhance biodiversity within their field. In the Corporate Sustainability Reporting Directive (CSRD), the European Sustainability Reporting Standards (ESRS) ‘E4 standard’ specifically addresses corporate sustainability relating to biodiversity and ecosystems (see Business for Biodiversity Ireland). Department of Enterprise Trade and Employment encourages businesses to engage with sustainability reporting The Minister of State with responsibility for Company Regulation at the Department of Enterprise, Trade and Employment, Dara Calleary TD has encouraged businesses to engage on new Corporate Sustainability Reporting Directive, the CSRD. Read more. Northern Ireland’s 10X Delivery Plan publishes Northern Ireland’s Department for the Economy has published the 10x Delivery Plan for 2023/24. The plan aims to be a step-change for growth for Northern Ireland’s economy. It outlines a work schedule to help deliver the 10x Economic Vision and its objectives and represents a ‘transformative approach to supporting innovative economic growth in a way that is inclusive and sustainable’. Among the sustainability areas of focus are Northern Ireland’s use of renewable energy and reduction of greenhouse gas emissions, and a planned doubling in the size of the low carbon and renewable energy economy. EU Nature Restoration Law passes The European Parliament has adopted its position on the EU Nature Restoration Law. This law proposes to restore at least 20 percent of the EU’s land and sea areas by 2030 and repair all ecosystems in need of restoration by 2050. The package reportedly aims to set specific targets for the first time on nature restoration. Measures will include rewetting some peatlands that had previously been drained, increasing green spaces in urban areas, and improving biodiversity in land used for agriculture and forestry. The European Commission has also adopted a package of measures for a sustainable use of key natural resources. Measures include a soil monitoring law, proposals to boost innovation and sustainability, and new measures to reduce food and textile waste. The proposals are to be discussed by the European Parliament and the Council in the ordinary legislative procedure. ‘Unprecedented’ sustainability commitments in EU/New Zealand free trade agreement A new landmark free trade agreement between the EU and New Zealand includes ‘unprecedented’ sustainability commitments, including in respect of the Paris Climate Agreement and core labour rights. For the first time ever in an EU free trade agreement the deal has a dedicated sustainable food systems chapter, a dedicated trade and gender equality article and a specific provision on trade and fossil fuel subsidies reform. It also liberalises environmental goods and services at entry into force. Following the ratification process in both the EU and New Zealand, the deal will enter into force. International Federation of Accountants feedback on Sustainability Reporting Standards The International Federation of Accountants (IFAC) has submitted  feedback in response to the European Commission’s European Sustainability Reporting Standards (ESRS). In its response, IFAC welcomed the standards while noting significant concerns regarding the need for interoperability that supports a global system for reporting. IFAC has also welcomed the International Sustainability Standards Board’s (ISSB) new standards and other important jurisdiction or regional initiatives, notably the U.S. SEC’s proposed climate disclosure rule. However, these approaches, it says, must align key concepts, terminologies, and metrics to avoid regulatory fragmentation, especially on matters of materiality. Glossary update The Chartered Accountants Ireland sustainability glossary has been updated to include carbon sinks and geothermal energy. Did you know? 15 July has been inaugurated as the EU Day for the Victims of the Global Climate Crisis. The annual day will serve to commemorate victims in Europe as well as worldwide and to raise awareness of concrete steps that people can take to help prevent - and be better prepared for and respond to - climate disasters.   The International Sustainability Standards Board (ISSB) has opened a new office in Beijing. The office’s work will focus on executing the ISSB’s strategy for emerging and developing economies, developing countries and SMEs, and will serve as a hub for stakeholder engagement in Asia. Resources A recording of Davy Horizon’s recent ESG Peer Network event on Decarbonisation and Responsible Sourcing in Value Chains is now available, along with digital versions of our new whitepaper and service information sheets. A free sustainability advisory service is now available from the Enterprise Europe Network at Dublin Chamber. The new EEN Sustainability Advisory Service focuses on improving business’ sustainability strategy. It is suitable for SMEs and companies at any stage in their sustainability strategy journey. Articles and newsletters Accountancy Europe’s Sustainability Update covers the European Commission’s sustainable finance package, the European Supervisory Authorities sharing a common understanding of greenwashing, the start of the CSDDD trilogue negotiations and the publication by the ISSB of its two inaugural standards.   Five tips for easier climate reporting – British luxury brand Burberry shares the five things that would have been good to know right from the start (ICAEW Insights)   Accounting firms accused of missing climate risks in company audits (Financial Times)   Irish businesses demonstrate confidence and pursue sustainability (Accountancy Ireland – Briefly)   The NewERA Climate Action Framework- a guide (Accountancy Ireland – The Bottom Line)   Four pathways to sustainable Irish cities (Accountancy Ireland – Briefly)   Upcoming events   SMEs and Your Finance for Energy Projects – Webinar – 25 July, 13:00 – 14.00 Is energy a business significant cost? If so, join next week’s webinar about SMEs and Your Finance for Energy Projects. The webinar will focus on SMEs that rent/own buildings for office, retail, warehouse, hotel, pub or leisure services, and landlords that lease/rent buildings to SMEs. The panel discussion will address key topics, including financial supports and where should an SME start. Register here. Dublin 2050 - the Future of Sustainable Finance – In-person event – 5 Sept, 8.30 – 10.00 The latest in the ‘Dublin 2050 series’ this expert panel-led event aims to contribute to knowledge sharing, collaboration, and innovation within the business community on advancing sustainable finance practices and attracting investments aligned with ESG principles. Dublin Chamber, 7 Clare Street, Dublin 2 Dublin Chamber – Sustainability Academy Workshops Dublin Chamber has announced it will offer Sustainability Academy workshops in Autumn. Beginning with a workshop on Sustainability/ESG 101 in September, the 3-hour Zoom workshops includes a free one-hour, post-workshop one-on-one advisory consultation per company with an expert advisor. Find out more here. Network for Chartered Accountants working on ESG projects Are you a Chartered Accountant working in ESG or working on ESG-related projects? Would you like an opportunity to engage with other Chartered Accountants working in this space to share insights, challenges and opportunities? Chartered Accountant now has a network to allow members working in sustainability/ESG to meet and discuss all matters of interest re ESG and accounting. 3rd or 4th Wednesday of every month Next: 26 July, 2023  14.00-15.00/30 Chartered Accountant House/Teams If you would like to attend please email sustainability@charteredaccountants.ie   You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.  

The Minister of State with responsibility for Company Regulation at the Department of Enterprise, Trade and Employment, Dara Calleary TD has encouraged businesses to engage on new Corporate Sustainability Reporting Directive, the CSRD. Read more. Speaking at a recent webinar, Minister Calleary stated “The new rules for sustainability reporting may be challenging at the outset, however, the requirements have been sequenced, whilst still maintaining ambition, to allow companies, and the accounting and audit industry time to understand the new standards, start measuring the relevant data, and deepen the knowledge and skills necessary.” Minister Calleary went on to state his intention to establish and chair a new sub-group of the Enterprise Forum on Responsible Business that will act as a link with industry and relevant stakeholders and will provide a platform for regular interaction between the Department and its agencies on these important matters. A total of 34 responses were submitted by stakeholders and interested parties on the Member State options contained within the CSRD, ahead of its transposition into Irish law. (The response from Chartered Accountants Ireland can be found here and the Department’s published proposed policy response to the public consultation is here.)

In Irish news, representatives from the Institute met with the Minister for Finance to discuss the CCAB-I's Pre-Budget Submission 2024 and also engaged with Revenue to discuss the new Enhanced Reporting Requirements for Employers. In UK news, read about how agents can action post that they have sent to HMRC which is more than a year old and anyone authorised under the UK Trader Scheme should apply to the new UK Internal Market Scheme by the end of this month. In International news, the OECD agrees an Outcome Statement on the Two-Pillar Solution. Ireland The Minister for Finance met with Institute representatives to discuss the CCAB-I’s Pre-Budget Submission 2024. Institute representatives, under the auspices of the CCAB-I, engaged with Revenue to discuss the implementation of the new enhanced reporting requirements for employers. UK Read in our miscellaneous HMRC updates about the approach to be taken by agents to ask HMRC to action agent post which is more than a year old. HMRC is recommending that anyone signed up to the UK Trader Scheme apply to the new UK Internal Market Scheme by the end of this month International The OECD has agreed an Outcome Statement on the Two-Pillar Solution. 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.

Representatives from the Institute, under the auspices of the CCAB-I, met with the Minister for Finance, Michael McGrath T.D and his team last week to discuss CCAB-I’s Pre-Budget Submission 2024. The need to simplify the tax system and reduce the administrative burden on businesses was discussed, as were the complexities experienced by small businesses, in particular, when availing of the R&D tax credit, EIIS and SURE. The importance of long-term investment in critical infrastructure, not least housing, in order to maintain Ireland’s position as a competitive place to do businesses was also highlighted. The need to reform the personal tax system to retain and attract talent was also discussed.  

Representatives from the Institute, under the auspices of the CCAB-I, attended the first meeting of the Tax Administration Liaison Committee (TALC) Enhanced Reporting Requirements Subgroup last week to discuss the implementation of enhanced reporting requirements provided for in section 897C TCA 1997. The new legislation, which will be effective from 1 January 2024, requires that employers report certain non-taxable payments made to employees. The ‘reportable benefits’ are travel and subsistence payments, the remote working allowance and the exempt small benefits. Revenue informed the group that it has been engaging with the Payroll Software Developers Association (PSDA) and other software providers to assist in the development of software to enable taxpayers to make the necessary submissions under the new regime. Revenue advised that it identified the various providers following a survey it commenced in January. Revenue is now encouraging employers to contact their software providers to ensure their software will integrate with Revenue Systems. For employers that will not be using software, Revenue is in the process of developing its own reporting platform on ROS, separate to its payroll reporting platform. It is Revenue’s intention that reporting will be done on a real-time basis. At the subgroup meeting, practitioners raised their concerns with the additional costs associated with the new measures as well as concerns around the practicality of real-time reporting. Revenue is planning to engage with employers from September to provide webinars and information sessions on the new system, following distribution of the attached leaflet in the coming weeks. Noting Revenue’s intention to implement the new reporting system from 1 January 2024, our representatives expressed concern at the minimal preparatory time to be given employers and their agents to comply with the new requirements. The Institute has been highlighting to Revenue the onerous and costly administrative burden that this new reporting requirement will cause for all businesses.  Cróna Clohisey, Tax and Policy Lead in the Institute also raised concerns about the system in a piece in the Sunday Independent Business at the weekend. We will keep members updated of developments in this area.  

Revenue has updated paragraphs 11.2 and 11.3 of its Tax and Duty Manual regarding the Universal Social Charge.  The updated guidance clarifies that as employer Personal Retirement Savings Account (PRSA) contributions and employer Pan – European Personal Pension Product (PEPPP) contributions are not subject to PAYE, they are not chargeable to PRSI.

Revenue has updated the Tax and Duty Manual to reflect the Finance Act 2022 amendments for PEPP providers. Now, where a declaration under section 263F TCA 1997 has been provided to the deposit-taker, interest on a deposit of a PEPP provider that is an asset of a PEPP can be paid gross (i.e. without deduction of DIRT).

This week we bring you information on HMRC’s plans for dealing with post from agents which is more than a year old and how you can get this actioned. Updated guidance for full expensing has been published and a reminder has been issued for the new alcohol duty system which commences next month. We also feature key updates for employers and news that from next month any agent claiming a PAYE income tax refund for a client must have an Agent Services Account. HMRC has also sent an email updating agents on the correction of national insurance records and state pension entitlement. HMRC’s plans for dealing with agent post more than a year old On 10 July, HMRC began to implement its plans for dealing with agent post which is more than one year old. Essentially this involves an extension to the work of the Agent Account Manager Service on a trial basis. Read more about how you can contact HMRC to action post which has not been responded to and which is more than a year old. HMRC’s plan is in response to continued feedback from this Institute and the other Professional Bodies on unacceptable service levels including long post and phone waiting times.  Alcohol duty reform and full expensing for capital allowances HMRC has issued a reminder that the new alcohol duty system commences next month from 1 August 2023, and a reminder email is also available. The guidance on full expensing (capital allowances) for companies has been updated. Employer updates The June 2023 issue of Employer Bulletin has been published which contains articles, amongst others, on:- paying PAYE and Class 1A in July; an update on the National Minimum Wage for interns and work experience; and employer direct debits. Agents making PAYE repayment claims need an Agent Services Account From 2 August 2023, agents that claim PAYE income tax repayments on behalf of clients must have an Agent Services Account. (“ASA”). Note that this change does not affect repayments claimed through Self-Assessment. HMRC is currently updating any relevant forms for such repayments which will include a box for the ASA account reference to be added. As it can take time to set up an ASA, agents who do not currently have one are recommended to apply for one as soon as possible.

Revenue has updated its Tax and Duty Manual to reflect amendments introduced in Finance Act 2022 regarding the filing obligation of EUTs.

Tomorrow, Tuesday 18 July has been announced as “Legislation Day” when the Government will publish draft legislation for inclusion in Finance Bill 2024. Also published will be explanatory notes, tax information and impact notes, responses to consultations and other supporting documents. It is expected that the draft clauses will largely cover pre-announced policy changes. We will be reporting on the key announcements made in next Monday’s Chartered Accountants Tax News.

The UK’s new mandatory disclosure rules which took effect from 28 March 2023 require arrangements caught by the rules and entered into on or after this date to be reported to HMRC. Since 1 June 2023, reportable arrangements should be notified to HMRC via the Mandatory Disclosure Rules service. Taxpayers and agents were still able to use the DAC6 service until 31 May 2023 to tell HMRC about arrangements reportable before 28 March 2023, or to send additional information, replacements or deletions for previously submitted disclosures.