Nicola Flannery outlines how organisations can navigate the expanding landscape of AI by focusing on ethical deployment, regulatory compliance, and building consumer trust for sustainable growth and innovation The true societal impact of Artificial Intelligence (AI) systems is yet to be fully realised. However, many already see AI as an engine for productivity and economic growth. As organisations compete to be the first to unlock and realise AI's full potential, governments and regulators worldwide have started the challenging task of creating legislation and regulatory frameworks around a constantly evolving technology. While there is still uncertainty around the risks due to AI technologies, some caution must be displayed to truly understand these, particularly where risks and harms to individuals may arise. In addition, privacy and security concerns are still the leading causes of limiting investments in AI-based solutions. However, with the current buzz around AI, even an organisation not currently considering it will be inclined to do so as the technologies evolve and mature. From this perspective, it is important to start thinking about AI use cases for your business and be ready to implement such solutions in a manner that builds customer confidence and aligns with the regulatory requirements. There is no doubt that companies that have an issue with how and where they deploy AI technologies will suffer from significant reputational damage. Trustworthy AI While the risks of AI technology do exist, there is also no doubt about the benefits that can be realised. However, the social and economic opportunities of AI may not be fully gained if the public’s concerns about the risks of AI outweigh their perception of the benefits. Therefore, it is crucial to ensure that AI technologies evolve and are deployed in ways that consumers and users can reasonably trust. Trustworthy AI, also known as ethical or responsible AI, has been proposed to mitigate the risks and enhance consumer/user trust in such systems. This is an umbrella term that consolidates several components which, according to the independent high-level expert group on AI established by the European Commission, consist of the premise that Trustworthy AI must be: lawful, respecting all applicable laws and regulations; ethical, respecting ethical principles and values; and robust, from a technical perspective, but also considering the social environment. Applying a human-centric, trustworthy AI-by-design approach will go a long way towards propelling innovative AI efforts while being aware of the risks that must be mitigated. Six dimensions for trustworthy AI Fair and impartial AI systems should make decisions that follow a consistent process and apply rules fairly. They should also incorporate internal and external checks to remove biases that might lead to discriminatory or differential outcomes, helping ensure results that are not merely technically correct but considerate of the social good. Transparent, documented and explainable AI systems may not operate as “black boxes”; all parties engaging with an AI should be informed that they are doing so and be able to inquire how and why the system is making decisions. Responsible and accountable The increasing complexity and autonomy of AI systems may obscure the ultimate responsibility and accountability of companies and people behind the decisions and actions of these systems; policies should be in place to clearly assign liability and help ensure that parties impacted by AI can seek appropriate recourse. Safe and secure Just as we currently depend on the consistent performance of professionals to help ensure that our daily activities are safe and healthy, we should be able to depend on equivalent or even greater reliability as we merge our systems with AI. Respectful of privacy As AI systems often rely on gathering large amounts of data to accomplish their tasks effectively, we should ensure that all data is collected appropriately, with full awareness and consent, and then securely deleted or otherwise protected from unsanctioned use. Robust and reliable As AI systems take greater control over more critical processes, the danger of cyberattacks and other harms expands significantly. Appropriate security measures should be implemented to help ensure the integrity and safety of the data and algorithms that drive AI. Nicola Flannery is Director of Data Privacy & Internet Regulation at Deloitte

CEOs are leveraging M&A for tech-driven growth and market expansion, embodying innovation and sustainability in a dynamic business landscape, explains Fergal McAleavey In the rapidly evolving business landscape of 2024, global CEOs continue to use mergers and acquisitions (M&A) to navigate innovation and transformation across their businesses.  The latest CEO Outlook Pulse Survey from EY shows businesses are engaging in M&A activity with renewed vigour, considering it a strategic support for addressing key priorities. The survey found that acquiring technology, new production capabilities and innovative startups, growing market share and accessing new geographies stood out as the top three strategic drivers for CEOs pursuing M&A. Irish M&A: growth and innovation In Ireland, the M&A landscape is particularly vibrant, with CEOs and investors showing a keen interest in a variety of transaction opportunities, from trade sales to private equity investment to strategic alliances. Ireland's thriving tech sector and business-friendly climate have fuelled a boom in deal-making, outpacing the UK and EU. This is likely to continue as companies pursue innovative technologies and seek to capitalise on the entrepreneurial energy of startups that have scaled. The strategic imperatives for Irish M&A are expected to align with global patterns, emphasising the acquisition of larger market shares, expansion into new markets, and the integration of advanced technology into existing operations. This is especially pertinent for Ireland, given its status as a European tech hub.  Ensuring strategic objectives are met CEOs are also signalling their readiness to streamline their portfolios, shedding assets to address ESG goals and refine their focus for the challenges ahead. Sustainability due diligence is playing an ever-increasing role in M&A transactions to assist buyers and sellers to ensure that those deals are aligned with their own corporate sustainability objectives. This strategic deal-making is not merely a short-term solution but is part of a broader, long-term vision to build resilience and adaptability for an unpredictable future. Irish CEOs' strategy With global funding markets more receptive in 2024, Irish acquirers may find it easier to secure financing for deals and may be the target of larger companies seeking to expand their geographic footprint or product offering. However, they must remain cautious of potential market tightening as political events unfold. For those looking to divest, the market's increasing appetite for acquisitions and the continued resurgence of private equity (PE) could provide favourable conditions. Nonetheless, the timing of PE's full-fledged return to the M&A space remains a little uncertain for large transactions as they await potential interest rate decreases, particularly in the Eurozone and the UK. Irish companies must stay attuned to shifts in monetary policy that could influence the M&A landscape.  To provide corporate sellers with more control over M&A transactions, particularly as a counter-measure to lengthy deal timelines that have become a feature of the M&A market in the last few years, time is well spent by those sellers preparing potential divestment assets for sale, including anticipating issues of particular relevance to likely buyers of those assets and identifying potential regulatory approval requirements that may add to longer deal timelines. Sell-side due diligence of prospective buyers can also be warranted to help flush out any potential roadblocks or delays that may arise from ever-increasing competition law, foreign direct investment and foreign state aid regime requirements.  The M&A momentum for the remaining months of 2024 is characterised by strategic foresight, adaptability, and a commitment to sustainability, as both global and Irish corporate leaders and investors navigate the complexities of a rapidly evolving business world. Fergal McAleavey is Partner of Corporate Finance – Strategy and Transactions at EY

The topic of whether a strong labour market delivers a good labour market is gaining significant attention, particularly since the Economy Minister has underscored the importance of ‘good jobs’ , says Martha Sargent The latest labour market statistics reveal a positive trend: between December and February 2024, unemployment stood at record lows (2.2%), and employment rates reached 71.7 percent, the highest level since the pandemic, indicating a potential improvement in job quality. For the first time since 2001, Northern Ireland did not have the highest level of economically inactive (26.7%) in the UK, with higher rates across Wales (28.1%) and the northeast (26.9%). The strength of the labour market creates a context in which we can challenge ourselves on whether the jobs we have are ‘good’. This has not always been the case. Since the pandemic and the Great Financial Crash, Northern Ireland’s focus has been the retention and recovery of jobs through downturns. In total, Northern Ireland lost over 40,000 jobs following these economic shocks. Encouragingly, as the recovery has taken hold, Northern Ireland reached peak levels of employment with over 904,000 jobs in 2022. So, what does this tell us about the quality of jobs available? Building a resilient economy, one that’s focused on jobs that suit the individual and promotes the overall economy, is a pressing need. This requires a strong emphasis on good, quality jobs—a concept that has now become a cornerstone of the Department for Economy's policy following the Economy Minister Conor Murphy’s  ‘economic vision’, which states “the promotion of good jobs” as one of four key objectives, along with promoting regional balance, raising productivity and reducing carbon emissions. This idea of ‘good jobs’ has also been promoted in the Resolution Foundation’s Creating a Good-Jobs Economy in the UK, in which it found that the British economy falls short on inequality metrics and that regional patterns in productivity play out in job quality. What makes a “good job”? For now, Northern Ireland does not have a clearly defined position on what a ‘good’ job is. What is clear is that it is a mix of areas such as pay, job satisfaction, HR policies, inclusivity, etc., and as such, is debated among policymakers, academics, and economists. In fact, the Department for Economy is currently debating such concepts as part of its measure for the ‘good jobs’ objective announced in the Minister’s economic vision. The Resolution Foundation has provided some insight into what makes a ‘good job’, such as work that pays well enough to allow for a reasonable living standard, stability and security, and opportunities for career progression. Northern Ireland’s New Decade New Approach 2020 includes decent working conditions, security of tenure and a worker's level of autonomy in the analysis, and more recently, the Nevin Economic Research Institute labelled ‘good jobs’ as being secure with strong employee-management relations. The body of research on ‘good jobs’ has highlighted that there is no clear path to tread in measuring or observing ‘good jobs’ for the Department of the Economy. However, Northern Ireland Statistics and Research Agency's Work Quality reports can provide some insight into the indicators that could be used. The latest data for some elements of consideration shows that 84.5 percent of all employee jobs are paid the real living wage or above; 96.9 percent are in secure employment; and 78.4 percent reported having job satisfaction. Thinking about ‘good jobs’ provides a more holistic approach to economic development. Improvements to well-being because of a ‘good job’ are expected to lead to wider economic benefits for society and the individual. Firms that place value on ‘good jobs’ should also experience higher levels of job satisfaction among workers, leading to an increase in productivity and a reduction in staff turnover and should attract more talent. A people-focused approach to ‘good jobs’ encourages security of employment, training and skills development to achieve the national skills gap challenge. As the old saying goes, ‘If you can measure it, you can manage it’. We should add ‘if you can define it, you can measure it’. Seeing the Department take steps toward defining and tracking ‘good jobs’ can only serve to strengthen the economy and add to Northern Ireland being viewed as a more attractive place to do business. Martha Sargent is Assistant Manager of Economic Advisory at Grant Thornton Northern Ireland

   In this week’s Sustainability/ESG bulletin, read about a survey on supports for small to medium practices to help with clients’ climate queries and an upcoming sustainability workshop. Also covered is the Government’s approval for Ireland’s Climate Action Plan 2024, biodiversity-related updates, new ESG-related resources from the Law Society and the IFRS, and updates from Europe, as well as articles, resources and events.   Survey Are you an accountant in a small/medium practice? Can you please take our survey? This 7-minute survey aims to discover if clients are asking accountants in small to medium practices about climate change (e.g. energy costs, solar panels, CSRD, supply chain questions, grants, etc.). The survey is part of research to identify supports that can be created for accountants now and in the future. Small/Medium Practice Sustainability Workshop (ROI) Chartered Accountants Ireland is running a workshop for small to medium accounting practices (SMPs) on how to get ahead of the sustainability curve. This interactive half-day session will focus on positive actions you can take to understand the ‘trickle-down’ effect of the Corporate Sustainability Reporting Directive ('CSRD’), green public procurement, access to sustainable finance, and how to make your practice more sustainable to save costs and respond to staff and client demands. IRELAND Climate Action Plan 2024 The Government has approved the third annual update to Ireland’s Climate Action Plan. Climate Action Plan 2024 (CAP24) builds on the Climate Action Plan 2023 by refining and updating the measures and actions required to deliver the carbon budgets and sectoral emissions ceilings. It commits Ireland to 2030 and 2050 targets for reducing emissions and how Ireland responds to the climate crisis, putting solutions at the centre of social and economic development. The Institute responded to the Department of the Environment, Climate and Communications’ Public Consultation on Climate Action Plan 2024, where we addressed the key challenges and risks to delivering the measures and actions set out in the Plan. We also identified additional supporting actions that could be taken in 2024, such as communication and awareness-raising, training and education, and targeted financial supports for businesses to help them with their transition to a net-zero society and economy. Read our response in full here. Funding awarded for local biodiversity projects Minister of State for Nature, Heritage and Electoral Reform, Malcolm Noonan, T.D., has announced that €2.8 million has been awarded to local authorities to carry out biodiversity projects through the Local Biodiversity Action Fund (LBAF). Projects include biodiversity education and awareness projects, bird conservation projects, invasive species management and wetland surveys, all of which support the implementation of the 4th National Biodiversity Action Plan. Funding is available in line with a grant application and award process and is subject to the provision of an agreed level of co-funding from the local authority’s own resources. The business of bees Approximately $44 trillion of economic value is at moderate or severe risk due to nature loss. Our pollinators, essential to supporting nature, are under severe threat, with huge risks to businesses globally. In recognition of World Bee Day (May 20) and International Day for Biological Diversity (May 22), here are some resources showing ways your company, regardless of sector, size, or location, can play a role in helping pollinators: Businesses: Actions to help pollinators Business for Biodiversity Ireland website Accounting for Nature UK/Northern Ireland Research has revealed that a majority of the UK public (56 percent) believe that a recent increase in lawsuits over contributions to climate change is a positive development. According to the Commercial courts report 2024 compiled by strategic communications consultancy Portland, 75 percent of the public also support the increase in lawsuits related to greenwashing, with 60 percent viewing companies that are subject to these claims unfavourably. 62 percent are also strongly in favour of shareholders being able to sue companies over their ESG policies. The report predicts that pressure from UK regulators on companies to disclose their ESG practices is likely to increase, along with the risk of legal action taken by shareholders. (For more, see this article on greenwashing by Dee Moran, Professional Accounting Lead with Chartered Accountants Ireland in the recent issue of Accountancy Ireland.) Europe The Mission on Adaptation to Climate Change has published a new report ahead of its Third Forum on 23 May 2024. The Mission on Adaptation to Climate Change focuses on supporting EU regions, cities and local authorities in their efforts to build resilience against the impacts of climate change. It highlights the need for innovation, collaboration and knowledge-exchange to build resilience. Find a definition of Adaption in the Chartered Accountants Ireland Sustainability Glossary The European Commission, assisted by the World Bank, has published 3 new reports on how to invest in disaster resilience, the cost of adaptation strategies and the financial impact of wildfires and droughts. The European Environment Agency EEA has published a report 'Responding to climate change impacts on human health in Europe: focus on floods, droughts and water quality’ urging governments, water authorities and healthcare providers to fast-track the implementation and better coordination of efforts to prevent, and to reduce the impacts of  water-related climate change on health and well-being that are already felt across Europe. These include deaths, injuries, outbreaks of infectious diseases and mental health consequences. Accountancy Europe has published its May Sustainability Update. Read here (and sign up for updates). Highlights include: European Parliament approved agreement on ESG rating activities, European Commission issues corrigendum to ESRS, IFRS Foundation and EFRAG publish interoperability guidance, and ISSB’s continued sustainability standards related work. Resources Law Society’s ESG MOOC The Law Society of Ireland has opened registrations for its 2024 Massive Open Online Course (MOOC) and the theme this year is Environmental, Social and Governance (ESG). The content is free and open to all and will be delivered online and on demand over 5 weeks from Tuesday 11 June. Topics include: the current legal landscape of ESG developing an ESG strategy for your firm or business ESG reporting obligations biodiversity and ecosystems climate change and decarbonisation diversity and inclusion ESG corporate governance issues, and much more. Expert speakers on the MOOC include Dee Moran, Professional Accountancy Lead with Chartered Accountants Ireland who will be speaking on the sustainable reporting landscape. IFRS new webinar series on sustainability disclosure The International Financial Reporting Standards Foundation (IFRS) has launched a new webinar series to support preparers on topics linked to sustainability disclosure. Find a link to the webinar and podcast series here. The IFRS, with the UN Sustainable Stock Exchange initiative, is holding two free half-day virtual training events on the ISSB Standards on 6 and 20 June, open to all. Webinar: AI and CSRD Chartered Accountants Ireland is hosting a webinar on AI and sustainability, showcasing how finance professionals are leveraging AI to meet their sustainability reporting obligations . Speakers David Connolly and Madeline Parkinson in EY’s Climate Change and Sustainability Services team will examine how to navigate these emerging and converging areas, what pitfalls to avoid, and questions to ask of AI providers. Join us on 18 June 2024 at 12.00-12:45. Articles Séamas O'Reilly: Don't Look Up's environmental message is ringing less hollow nowadays (Irish Examiner) Ireland must 'step up its game' on climate action plans, committee told (RTÉ) Expert taskforce convened to oversee UK’s adoption of ISSB standards (edie) Heavier storm-related rainfall due to human-induced climate change – study (RTE) Worst wine harvest in 62 years blamed on ‘extreme’ weather and climate change (euronews) Upcoming Events Chartered Accountants Ireland, Everyday Acts of Inclusion A collaboration between the Institute’s Balance LGBTQ+ Network Group, the Ethnicity Network Group and the Age/Disability working group, this event will highlight the benefits of diversity and inclusion and will explore the importance of focussing on intersectionality. Staff, students and members are all welcome to attend this free event. In person, 30 May, 6pm, CA House Pearse Street, Dublin 2   UN Global Compact, Creative Leverage: Influencing Human Rights Action in Business Part of the ‘Business and Human Rights Deep Dive Series, this webinar will see expert panellists sharing practical and relevant examples of creative ways a business can effect change within its value chain and business relationships. These strategies are not only to respond to actual or potential risks that the business might be involved in through its involvement with other entities, but also to ensure that the business is operating in an environment that enables it to respect human rights. Virtual, 30 May, 8am 1Business World, 2024 Global Natural Capital Conference Virtual, June 3-4, 2024   IFRS, with the UN Sustainable Stock Exchange initiative: free half-day virtual training events on the ISSB Standards Virtual, June 6, 2024.   Accountancy Europe, CSRD readiness: building trust through sustainability assurance In-person event, by invitation only, Brussels, 14 June 2024 (10:00 - 14:30)   Chartered Accountants Worldwide Navigating the sustainability reporting landscape Join the first webinar hosted by the ICAS Sustainability Business Network as we delve into the practicalities of adopting the various new sustainability reporting frameworks with two organisations who are leading the way on sustainability disclosures. Virtual, June 13 @ 11:00 am - 12:00 pm UTC+1 Chartered Accountants Ireland, Socially Conscious AI and CSRD (ROI/NI) Finance professionals are working hard to meet their sustainability reporting obligations under the Corporate Sustainability Reporting Directive (CSRD). Furthermore, they are considering leveraging AI, including the regulatory pressures that apply to it and how to use AI sustainably. This webinar will examine how to navigate these emerging and converging areas, what pitfalls to avoid, and questions to ask of AI providers. IFRS, with the UN Sustainable Stock Exchange initiative: free half-day virtual training events on the ISSB Standards Virtual, June 20, 2024. Half-day event Chartered Accountants Ireland, The Small/Medium Practice Sustainability Workshop A workshop for small/medium accounting practices (SMPs) on how to get ahead of the sustainability curve. This interactive half-day session will focus on positive actions you can take to understand the ‘trickle-down’ effect of the Corporate Sustainability Reporting Directive ('CSRD’), green public procurement, access to sustainable finance, and how to make your practice more sustainable to save costs and respond to staff and client demands. In person, Chartered Accountant House, 25 June, 9.30- 12.30; €60 members; 3 hours CPD points. A4S, Accounting for Sustainability (A4S) Summit The annual A4S Summit is a unique global online gathering for the finance and accounting community. The sessions throughout the day focus on your role and how to embed sustainability into your work. Speakers during the sessions will highlight the finance leadership that’s making a difference now, and look at ways we can fast-track to a just, nature-positive and net-zero emission economy. Registration is open for all and will include access to the recordings from the day. Virtual, Wednesday 3 July (sessions throughout the day) EPA Circular Economy Conference 2024 Online and inperson (Aviva Stadium, Dublin), 25 September,   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 Accountants Ireland now has a network to allow members working in sustainability/ESG to meet and discuss all matters of interest re ESG and accounting. Next meeting: Wednesday, 29 May, 14:00-15.30 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.

All members are invited to attend the 2024 Ulster Society Annual General Meeting, taking place on Thursday, 6 June 2024, at 4.30pm in The Merchant Hotel, Belfast. Members can register to attend here. Apologies can be emailed to karen.hewitt@charteredaccountants.ie Relevant documents: Annual Report 2023 AGM minutes 2023 AGM Agenda 2024 Election Report 2024 Rules of Chartered Accountants Ulster Society

 In Irish news, the Employers’ PSRI threshold is to increase from 1 October 2024, and we are delighted to confirm that TaxSource Total, the Institute’s free online tax resource, has been updated for Finance Act 2023 and Finance (No. 2) Act 2023. In UK news, as the National Audit Office criticises HMRC performance, additional investment has been announced for HMRC to fund its services and we remind employers and agents that 31 May 2024 is the deadline for providing the 2023/24 P60 to employees. In International news, the EU has reached political agreement on the FASTER withholding tax initiative. Ireland The Employers’ PRSI threshold is to increase from 1 October 2024, as part of a range of measures intended to support small and medium enterprises announced by Government last week. TaxSource Total, the Institute’s free online tax resource, has been updated for Finance Act 2023 and Finance (No. 2) Act 2023. UK Read about the additional investment announced for HMRC to fund its services as the National Audit Office criticises HMRC performance in 2022/23. Friday 31 May 2024 is the deadline for provision of the 2023/24 P60 to employees. International The EU has reached political agreement on the Directive on Faster and Safer Relief of Excess Withholding Taxes (FASTER). 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.

Terence O’Rourke has been recognised for his contribution to the accountancy profession over several decades. He received the “Outstanding Contribution to Accountancy” award at the 2024 Irish Accountancy Awards in Dublin.  This category recognises an individual whose work demonstrates a sustained commitment to the advancement of the profession. It recognises the exceptional abilities and achievements of the recipient, as well as their commitment to the organisations and teams they have worked with, and to the industry overall. Previous recipients of the award include Elaine Coughlan, FCA, Dr Laurence Crowley, CBE, FCA and Dr Margaret Downes FCA, and Professor Patricia Barker. Accepting the award, Terence O’Rourke said  “I believe that success in the accountancy profession is not just about numbers and balance sheets, but building trusting relationships, providing valuable insights, and making a positive impact on the businesses and individuals we serve. It is about dedication to continuous learning, adapting to new technologies, and staying ahead of the ever-changing regulatory landscape.   “As we navigate unprecedented challenges and uncertainties, the role of accountants becomes even more crucial. We must leverage our expertise to help businesses thrive, make informed decisions, and safeguard financial stability. We must uphold the values of transparency, accountability, and professionalism in everything we do.”   Chief Executive of Chartered Accountants Ireland, Barry Dempsey said   “In preparing for this evening, I was struck by Terence’s centrality in this profession over many years, on behalf of his firm, the profession, and on behalf of the state. Terence led KPMG in Ireland for two terms, and served on the KPMG Global Executive Team, navigating the end of the boom years and some of the most turbulent times in Irish corporate life.     “From early in his career, Terence contributed to the development of the profession, as Chair of the Institute’s Regulatory Standards Council Committee, a member of the Chartered Accountants Regulatory Board, a Council member, and as President of this Institute.  Terence served as the Institute’s representative to the government-initiated Review Group on Auditing in 2000 which led to a new regulatory regime for auditing in Ireland. I congratulate Terence and thank him for his support to so many in the profession over so many years.”   The Irish Accountancy Awards were launched in 2016 to celebrate excellence in the accountancy profession across a total of 27 categories.    ENDS    

Introduction Readers will know that sanctions are adopted at EU level but may or may not be aware that enforcement relies on member states amongst which definitions of sanctions violation and associated penalties vary. These inconsistencies led to a concern in the EU about undermining of the EU sanctions regime and that potential offenders would deliberately act in jurisdictions where penalties were lighter. Click here for a briefing document by the EU Parliament which wrote ”…The significant differences between national systems, particularly in terms of offences and penalties for breaches of EU sanctions, are thought to weaken their efficacy and the EU's credibility….”  On 24 April 2024 the European Union adopted a directive to harmonise criminal offences for violation of EU sanctions. (the “Directive”). Click here for a link to a European Parliament press release on the Directive. The Directive was introduced to limit sanctions circumvention and to tighten enforcement. The Directive provides a common definition of what constitutes a violation of EU sanctions and provides for penalties for the violation of European Union restrictive measures. The Directive provides for criminalisation for an intentional violation of sanctions but also where there is serious negligence in the circumstances set out in the Directive. It also criminalises attempted violations. What constitutes a criminal offence and exemptions? Article 3 sets out conduct constituting a criminal offence. These include failing to freeze funds, not respecting travel bans or goods embargoes, transferring funds to persons subject to sanctions, or doing business with state-owned entities of countries under sanction. Providing financial services in violation of sanctions will also become a punishable offence. Inciting, aiding, or abetting the commission of offences is also a criminal offence. Member states can exempt conduct from criminal sanction for violations involving funds, economic resources, goods, services, transactions, or activities of a value of less than €10,000.  An exemption is also given for legal professionals regarding information obtained while ascertaining the legal position of a client or defending or representing judicial proceedings. There is also an exemption for providing humanitarian assistance. Penalties The Directive provides for prison sentences and fines. It also includes measures such as withdrawal of permits and authorisations, disqualifications, and temporary bans on running for public office. For natural persons penalties can be between one and five years’ imprisonment depending on the seriousness of the offence. The Directive also provides for liability and penalties for legal persons. Maximum fines can be from 1% to 5% of worldwide turnover of a legal person, depending on the offence. Directive on combatting money laundering by criminal law (2018/1673) amended The definition of criminal activity is amended in this directive to add the violation of Union restrictive measures as a new criminal activity. Entry into force The Directive enters into force on 19 May 2024 and member states have until 20 May 2025 to implement it into national law. 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.  

Check out the latest items on the Agent Forum. Remember, in order to view each item, you must be signed up and logged in.   All agents, who are a member of a professional body, are invited to join HMRC’s Agent Forum. This dedicated Agent Forum is hosted in a private area within the HMRC’s Online Taxpayer Forum. You can interact with other agents and HMRC experts to discuss topical issues and processes. 

Do you use HMRC online services? Don’t be caught out by the planned downtime to some services. HMRC are warning about the non-availability of specific services on the HMRC website, a range of services are impacted. Check the relevant page for information on planned downtime.  

In this week’s EU exit corner, we bring you the latest guidance updates and publications relevant to EU exit. The most recent Trader Support Service is also available. And finally, last week the UK’s Foreign Secretary and the European Commission’s Executive Vice-President published a joint UK-EU statement on the meetings of the Partnership Council and Withdrawal Agreement Joint Committee.  Latest meetings of the Partnership Council and Withdrawal Agreement Joint Committee.  Last week the Foreign Secretary Lord Cameron and European Commission Executive Vice-President Maroš Šefčovič published a joint UK-EU statement on the meetings of the Partnership Council and Withdrawal Agreement Joint Committee which took place in Brussels on Thursday 16 May.  On the same day it was announced that the UK and EU also ratified a new set of arrangements which aim to ensure that Northern Ireland traders can fully benefit from the UK’s independent free trade policy. The deal means over 13,000 tons of lamb, beef, and poultry including from key Free Trade Agreement partners, such as Australia and New Zealand, will now be covered by UK tariff rate quotas.  Miscellaneous updated guidance etc.   Recently updated guidance, and publications relevant to EU exit are set out below:-  Search the register of customs agents and fast parcel operators;  UK customs office codes for the Customs Declaration Service;  Apply to use simplified procedures for import or export (C&E48);  Report a problem using the Customs Declaration Service;  Navigate the CDS Declaration Instructions for Final Supplementary Declarations (FSD);  Navigate the Customs Declaration Service instructions for inventory exports;  Navigate the Customs Declaration Service (CDS) Bulk Import Reduced Data Set (BIRDS) Declarations and Customs Clearance Request (CCR) completion instructions for inventory imports; and  Navigate the CDS Declaration Instructions for Exports. 

In this week’s miscellaneous updates, HMRC has published updated guidance on research and development (“R&D”) tax relief and the latest guidelines for compliance published by HMRC examine common errors in capital allowances claims for plant and machinery. The form for reporting CGT on residential property gains has recently been reformatted and HMRC has published updated guidance for employer’s on giving foreign tax credit relief. Foreign businesses can now apply for gross payment status under the construction industry scheme and, finally, HMRC’s latest schedule of live and recorded webinars for tax agents is available for booking. Spaces are limited, so take a look now and save your place.  Updated guidance on R&D tax relief  HMRC has published updated guidance on R&D tax relief as follows:-  Research and Development (R&D) Tax Relief: Enhanced R&D intensive support for loss-making SMEs based in Northern Ireland;  This guidance covers claiming enhanced R&D intensive support (“ERIS”) as a loss-making, small and medium sized enterprise (“SME”) based in Northern Ireland. The Research and Development (R&D) Relief (Chapter 2 Relief) Regulations 2024 make provision for loss-making, R&D intensive SMEs with a registered office in Northern Ireland.  SMEs registered in Northern Ireland whose business activities involve no element of trade in goods, and no relevant activities in relation to electricity, can choose to opt out of these provisions by notifying HMRC.  Affected companies are not subject to the restrictions for relief on payments to overseas contractors or providers of externally provided workers and will be able to claim enhanced R&D intensive support, subject to a rolling 3-year limit. Above this limit, relief is available under the new merged scheme.  Enhanced R&D intensive support allows loss-making R&D intensive SMEs to:-  deduct an extra 86 percent of their qualifying R&D revenue costs as an additional deduction in calculating their adjusted trading loss, in addition to the 100 percent deduction which is already available to make a total of 186 percent deduction; and  claim a payable tax credit, which is not liable to tax, and which is worth up to 14.5 percent of the surrenderable loss.  Submit information to support your claim for R&D Corporation Tax reliefs.  The guidance on what detailed information is needed to send to HMRC to support R&D tax relief claims, and when and how to submit it has also been updated.  Guidelines for compliance (“GFC”) 5 - common errors in capital allowances claims for plant and machinery  HMRC recently published GFC 5 which aims to assist taxpayers and agents in managing risks in making a claim for capital allowances on plant and machinery. The guidelines set out areas where errors are commonly made and includes a recommended approach for making a claim and keeping records. According to HMRC, the guidelines do not represent a change in the law or HMRC policy.   In November 2021 HMRC announced that it would be publishing GFC as part of its action being taken in response to its review of tax administration for large businesses. GFCs aim to provide practical guidance and greater transparency on the approaches HMRC regards as higher or lower risk and the associated response.   CGT on UK residential property gains  Disposals of UK residential property must generally be reported to HMRC within 60 days of completion. This deadline applies to anyone UK or non-UK tax resident with transactions able to be reported to HMRC on paper in some cases. Recently, the format of the paper form changed from a PDF to an online form. Once completed, the form should be printed and posted to HMRC, as before.   HMRC has been contacting some taxpayers by email in relation to reporting these transactions. HMRC is following up on these emails by contacting taxpayers by phone in order to gather feedback on the email.  New guidance for employers giving foreign tax credit relief  HMRC has published updated guidance for UK employers on providing foreign tax credit relief (“FTCR”) to employees. If an Appendix 5 arrangement is in place, the employer is able to offset foreign tax deducted from the employee’s pay against tax due under PAYE via FTCR. This offset is limited to the employee’s UK income tax liability.   Foreign businesses and the Construction Industry Scheme (“CIS”)  Businesses based outside the UK can now use form CIS305 to register as a subcontractor and apply for gross payment status under the CIS.