Welcome to this week’s Technical Roundup. In developments this week, as part of its ongoing engagement activities in relation to the periodic review of FRS 102 and other FRSs, the Financial Reporting Council hosted a webinar on 19 January which gave an overview of the proposals and provided further context in relation to the decisions made; the Chairperson of the European Banking Authority recently gave a speech on Financing transition to sustainability? What is the role of banking regulation? He said that the financial sector has an important role to play, both in terms of financing the transition to sustainability and for managing financial risks stemming from ESG factors. Read more on these and other developments that may be of interest to members below. Financial Reporting IAASA has published a compendium of financial reporting decisions. These decisions relate to accounting treatments applied by three companies in their 2021 annual financial reports. This compendium, for the first time, includes decisions covering accounting for climate change and sustainability initiatives. As part of its ongoing engagement activities in relation to the periodic review of FRS 102 and other FRSs, the FRC hosted a webinar on 19 January which gave an overview of the proposals and provided further context in relation to the decisions made. The Financial Reporting Council (FRC) are hosting a webinar on 31 January entitled “ESG – what we’ve achieved so far and what’s next” The IASB have released a webcast which addresses the proposals on financial instruments contained in the recent Exposure Draft on the Third Edition of the IFRS for SMEs Accounting Standard. In its Q4 2022 podcast the IFRS Interpretations Committee discussed a recent submission in relation to IFRS 16 relating to whether a contract including a substitution right contains a lease. The tentative agenda decision in relation to this is open for comment until 6 February 2023. In its sixth episode of “The Fast Future with IFAC” podcast series, some issues relevant to small and medium practitioners are discussed, including cybersecurity, cloud computing, client relationship-building, attracting and retaining talent and firm innovation. Auditing The IAASB has opened its public consultation for a group audit-specific section of the proposed auditing standard for less complex entities. This is open for public comment until 2 May. Sustainability The Chairperson of the European Banking Authority recently gave a speech on Financing transition to sustainability? What is the role of banking regulation? He said that the financial sector has an important role to play, both in terms of financing the transition to sustainability and for managing financial risks stemming from ESG factors. There was some discussion on the EBA roadmap which was adopted in December 2022 and that EBA are going to continue working to embed ESG considerations into their risk analysis and stress testing. Professional Accountancy Education Europe (PAEE), which is a collaboration between European accountancy bodies striving to provide a high-quality education framework at international level have issued some Q&As which explain why it is vital to further develop sustainability awareness among accountancy and auditing professionals. The International Sustainability Standards Board (ISSB) have issued their January 2023 update and podcast. This discusses recent developments including the rollout and adoption of Sustainability Standards S1 and S2. Insolvency The Institute is hosting a webinar on Options for directors’ in financial difficulty on Thursday, 9 February 2023. We will outline directors’ duties and obligations when a business is in financial difficulty, and possible consequences for directors for not adhering to those duties and obligations. There will be discussion on the recent insolvency related changes to Companies Act 2014 on the expansion of directors’ duties. Anti-money laundering The Irish Minister for Justice, with the consent of the Minister for Finance recently issued Guidelines under section 37(12) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (as amended) (Act) giving a bit more detail of  those functions in the State that may be considered to be prominent public functions for the purposes of the Act. This will assist firms to identify domestic Politically Exposed Persons (PEPs) when conducting their AML risk assessment. The UKFIU recently published the 2022 Suspicious Activity Reports (SARs) Annual Report and annexes which features statistics covering the years 2020-21 and 2021-22.SARs are submitted to the NCA by individuals working in regulated sectors such as banking, legal and financial services, where they suspect that transactions are being used to launder money or conceal criminal activity. Other Areas of Interest The Irish Central Bank recently issued a Dear CEO letter concerning its supervisory findings and expectations for payment and electronic money (E-Money) firms. The purpose of the letter is to reaffirm supervisory expectations of CBI with the CBI stating that the supervision of all financial services sectors is risk-based. The letter also sets out a requirement that all payment and e-money firms who are required to safeguard users’ funds obtain a specific audit of their compliance with the safeguarding requirements under EU regulations and the letter sets out what CBI expects the audit opinion to contain. Read the full letter at the link above . Also, in CBI news the Governor recently issued a letter setting out his financial regulation priorities 2023.Among other items it includes continuing progress on actions on the systemic risks generated by non -banks and ensuring that the EU’s Anti Money Laundering Action Plan including the establishment of a single supervisory authority results in  a consistent and robust EU wide framework. The DETE webinar on the Corporate Sustainability Reporting Directive (CSRD)was held on 26 January 2023.The purpose of the webinar was to introduce CSRD and the European Sustainability Reporting Standards arising out of it, to Irish businesses so that they can begin their preparations. DETE reported that next week will see the launch of a public consultation on member state options contained within the CSRD. Further news on the webinar can be found here. For further technical information and updates please visit the Technical Hub on the Institute website.  

The deadline for making an Unprompted Qualifying Disclosure in relation to previously undisclosed Period 1 liabilities under the Debt Warehousing Scheme (DWS) is 31 January 2023. Revenue has updated its Tax and Duty Manual on the process for taxpayers making an Unprompted Qualifying Disclosure of previously undisclosed Period 1 liabilities. Such taxpayers have an opportunity to have those additional liabilities warehoused under the terms of the DWS. The updated guidance sets out the period within which taxpayers availing of Debt Warehousing must agree a Phased Payment Arrangement (PPA) for their warehoused liabilities.  

Revenue policy is that opinions/confirmations provided by Revenue are valid for a maximum period of 5 years. Revenue has updated its Tax and Duty Manual providing guidance to taxpayers who wish to continue to rely on an opinion or confirmation issued by Revenue in the period between 1 January and 31 December 2017 on or after 1 January 2023.   A taxpayer who wishes to continue to rely on an opinion/confirmation is required to make an application for its renewal or extension on or before 31 March 2023.

Revenue has updated the Income Tax (Employments) Regulations 2018 Tax and Duty Manual reflecting the changes made as a result of the Income Tax (Employments) Regulations 2022 S.I. No. 690 of 2022. These changes are operational since 1 January 2023 and amend the Income Tax (Employments) Regulations 2018 that prescribe the manner in which the deduction of tax from salaries and wages under the “Pay As You Earn” system operates. Further information is available in eBrief no.011/23.

Revenue has updated its Tax and Duty Manual for PAYE reviews where Week 53 applies to reflect the Finance Act 2022 changes:  Amendment to section 480B TCA 1997, to provide that the Week 53 provisions apply to the Sea-going Naval Personnel Tax Credit with effect from 1 January 2023. Application of the Week 53 provisions to the income threshold applicable when determining if an individual qualifies for the Home Carer Tax Credit. However, as this treatment was applied previously by Revenue on an administrative basis, claimants will not see any difference in the tax treatment applicable to them on foot of this change.

Revenue has updated its Stamp Duty Tax and Duty Manual to provide information on how section 31C SDCA 1999 (shares deriving value from immovable property situated in the State) interacts with section 31E SDCA 1999 (stamp duty on certain acquisitions of residential property).

Revenue has updated the Stamp Duties Consolidation Act 1999 - Notes for Guidance  to include all amendments to the 1999 Act by subsequent Acts up to and including Finance Act 2022.

Revenue has updated several chapters of the Stamp Duty Tax and Duty Manuals. Further information is available in eBrief no. 016/23.

Revenue has updated the Stamp Duty Tax and Duty Manual to provide information on how section 31D SDCA 1999 (cancellation schemes of arrangement) interacts with section 31E SDCA 1999 (stamp duty on certain acquisitions of residential property).

Revenue will allow the application of the zero rate of VAT to the supply of Covid-19 in-vitro diagnostic medical devices (testing kits) following a request from the Minister for Finance, Michael McGrath. The Covid-19 test kits must conform with the essential requirements of all relevant European Medical Device Directives. For example, a Covid-19 test kit product which has a CE marking is proof that it meets those requirements. This temporary measure applies from 1 January 2023 on an administrative basis pending enactment of the appropriate legislative provisions.

Members are reminded that, effective 1 January 2023, there have been changes to the rules for calculating benefit-in-kind (BIK) on company vehicles under section 121 TCA 1997 & section 121A TCA 1997. From that date: The BIK on all company cars, including electric vehicles, will be calculated with reference to CO2 emissions. The cash equivalent for vans will increase from 5 percent to 8 percent of the original market value (OMV). In addition, for the years 2023 to 2025, the cash equivalent of an electric vehicle made available for an employee’s private use will be calculated based on the actual OMV reduced by: €35,000 for the year 2023, €20,000 for the year 2024, and €10,000 for the year 2025. The changes are largely driven by the government’s Climate Action Plan 2021.

Welcome to this week’s Technical Roundup.  In developments this week, the IDA in Ireland has issued its monthly e-zine which includes a report of ‘green talent’ on the rise and seven offshore renewables projects given a boost by the Irish Government; the Financial Reporting Council held a webinar on 19 January setting out the proposals contained in FRED 82 Draft amendments to FRS 102 The Financial reporting Standard applicable in the UK and Republic of Ireland and other FRSs – Periodic Review. Read more on these and other developments that may be of interest to members below. Financial Reporting The International Sustainability Standards Board (ISSB) are planning to hold a series of webinars on corporate reporting. The series, which commences on 24 January, will offer a deep dive into the ISSB proposed standards and will consist of three parts as follows. Part 1: Better information for better decisions—Introduction to investor-focused sustainability disclosure Part 2: Any size or stage—Getting started on climate disclosure Part 3: Connectivity and controls—the path to investor-grade disclosure The FRC held a webinar on 19 January setting out the proposals contained in FRED 82 Draft amendments to FRS 102 The Financial reporting Standard applicable in the UK and Republic of Ireland and other FRSs – Periodic Review. Auditing A new publication from Accountancy Europe builds on the factsheet published last year and offers constructive recommendations based on the discussions with their members’ audit experts as well as external stakeholders involved in developing AQI initiatives in their respective jurisdictions. Sustainability The IDA in Ireland has issued its monthly e-zine which you can click here to read. It includes a report of ‘green talent’ on the rise and seven offshore renewables projects given a boost by the Irish Government. Insolvency In December 2022, the Bankruptcy Master for Northern Ireland advised that the restriction on filing new creditors' winding up petitions is likely to be lifted in the new term. The court has advised that further information will be issued in advance of the new guidance. The court noted that lifting the restrictions may bring about some logistical challenges which is further hampered by the absence of the new proposed Insolvency (Amendment) Rules (Northern Ireland) 2022 and has encouraged a collaborative approach between all practitioners and the court. The Institute is hosting a webinar on Options for directors’ in financial difficulty on Thursday, 9 February 2023. We will outline directors’ duties and obligations when a business is in financial difficulty, and possible consequences for directors for not adhering to those duties and obligations. There will be discussion on the recent insolvency related changes to Companies Act 2014 on the expansion of directors’ duties. Other Areas of Interest The Irish Dept of Enterprise Trade and Employment (DETE) recently published its January 2023 Enterprise newsletter. It includes information on topics such as the webinar DETE are hosting on Thursday 26 January 2022 between 10am - 12pm to explain the new Corporate Sustainability Reporting Directive and accompanying standards in more detail. It also includes information on tariff suspension/quota schemes with the deadline for applications at 5.30pm on Tuesday, 31 January 2023. It also gives information on changes to the employment permit system to address skills shortages in Ireland’s Dairy, Transport and Home Care sectors. DETE has advertised that there will be presentations from the officials heading up the transposition of the directive within the Department of Enterprise, Trade & Employment, the European Financial Reporting Advisory Group (EFRAG) and the EU Commission on the day of the webinar. The Irish government has recently published its legislation programme for Spring 2023. Click here for the press release and to access the spring legislative programme. Some particular items of interest are as follows: In the programme pre legislative scrutiny has taken place on the Charities (Amendment) Bill and it is now on the priority publication list. There is a heads in preparation of an Equality Acts (Amendment) Bill 2023 stated to make provision for proposed amendments to the equality legislation arising from the review of the Equality Acts. Readers may recall previous government agenda where a limited partnership Bill was proposed to modernise the Limited Partnership Act 1907.In the spring 2023 programme there is a heads in preparation of a Miscellaneous Provisions (Transparency and Registration of Limited Partnerships and Business Names) Bill 2023. This is stated to be to reform the Limited Partnerships Act 1907 and the Registration of Business Names Act 1963, strengthening Ireland’s regulatory framework and responding to concerns raised in relation to the transparency of limited partnerships. The Co-operative Societies bill is on the agenda as heads in preparation. Readers may recall that earlier this year, the Institute, as part of CCAB-I, responded to a public consultation from the Dept of Enterprise, Trade and Employment on new legislation for the co-operative sector and in November 2022 we brought you a news item that the Government had approved the drafting of what is billed as ground-breaking legislation for the sector. Here is the link to page giving details of the General Scheme of the Co-operative Societies Bill 2022. On this quarter’s legislative agenda work is still underway on the Companies (Administrative, Governance & Insolvency Amendment) Bill and it is stated to give effect to outstanding Programme for Government commitments on rights of workers as creditors; trading entities splitting operations; and transactional avoidance. One last bill which might be of interest is the Licencing of Construction Activity Bill which is stated to be to provide for the establishment of a statutory licensing system for construction and related activities. The Dept of Justice has recently published its 2021 Annual Report. They report that publication of  a Justice Climate Policy Statement setting out how the justice sector will reach its ambitious climate and energy efficiency targets, including by the adoption of green public procurement has been carried over to Justice Plan 2022. On the anti-money laundering front it is reported for example that 2021 inspections comprised 106 inspections of High Value Goods Dealers; 138 inspections of Trust or Company Service Providers; 23 inspections of notaries; 8 inspections of gambling providers and 5 inspections of Tax Advisors/ External Accountants. For further technical information and updates please visit the Technical Hub on the Institute website.