Many Irish SMEs overlook transfer pricing but as Gavan Ryle explains, getting it right early is crucial for tax efficiency, compliance and successful global growth Transfer pricing is the process of setting prices for transactions between related parties, typically involving the exchange of goods, intangibles, services or finance between one group of companies and another. Many small- and medium-sized enterprises (SMEs) in Ireland may think that transfer pricing is only relevant to large multinationals, but this is not the case. Once Irish companies begin to trade in different jurisdictions, their transfer pricing policy will play a key role in determining the profits or losses recognised in each one. This presents an opportunity to optimise tax savings. It also carries risk, however, where transfer pricing audits handled incorrectly give rise to unnecessary costs. Relevance for Irish SMEs Transfer pricing is particularly relevant to Irish SMEs because so many begin exploring overseas opportunities at an early stage. Ireland is a relatively small market, so growth-oriented Irish companies often begin exporting or expanding overseas at a far earlier stage than their international counterparts. This very quickly gives them a taxable presence in foreign jurisdictions, which typically have corporate tax rates well in excess of 12.5 percent. These firms must plan for how they will be taxed in these locations and how to manage their overall effective tax rate. A scalable transfer pricing model can offer Irish SMEs expanding abroad a significant advantage from the outset.  First steps and planning ahead As with so much else in business, it is crucial to plan ahead—in this case, by putting a transfer pricing policy in place. The process of setting prices for related-party dealings cannot be handled arbitrarily, and must be implemented in the same way as if the parties involved were not related. The price charged between related parties—and the method of arriving at this price—should be very similar to that which would apply to an unrelated party. The emphasis should be on the functions performed, assets owned and risks borne by each affiliate in the business. It is important to look at the entire value chain, from research and development (R&D) through to production, distribution, sales and marketing and business support functions. The business will need to fully appreciate where executive decisions are made. A properly structured and fair transfer pricing policy is an investment in the longevity and success of your business. It can help to ensure that your pricing strategies are robust and adaptable, meeting your current needs while also preparing you for future challenges and opportunities. Whether you are navigating complex deal room negotiations, undergoing a tax audit, or planning to expand your business model into new territories, a well-crafted transfer pricing policy will help. As your business continues to grow While it is crucial to take a long-term view when setting your transfer pricing policy, it is equally important to get it right at the outset, notwithstanding the cost involved. It may also be necessary to revisit your policy as your business scales, ensuring it remains fit for purpose. Consider the impact of events such as acquisitions, expansion into new territories, or the appointment or relocation of key senior leadership roles. Remember, formal Irish transfer pricing compliance rules will take effect once the consolidated group turnover exceeds €50 million. Risks and opportunities Tax authorities at home and abroad have increased their efforts to ensure companies comply with transfer pricing rules. An incorrect or poorly designed transfer pricing policy may lead to lengthy and costly tax audits with potential penalties, depending on the facts and circumstances. Increasingly, SMEs are seeking external funding to implement business strategies. Having a robust and effective transfer pricing model in place as you navigate funding rounds can be highly advantageous in conveying the value of your enterprise. Gavan Ryle is a Partner at PwC Ireland

Our brains shortcut for safety, not fairness, but this doesn’t mean bias should determine our decision-making. Andrea Demody explains how leaders can promote fairness and inclusion at all levels Most of us like to think we're fair-minded. Most leaders I work with genuinely believe they hire and promote based on merit. Their favourite articulation is often: "I always hire the best person for the job." But here's the thing: our brains weren't built for fairness. They were built for speed and safety. What does this mean for building a fair organisation? Imagine you're standing at a busy road crossing, the cars are whizzing by, and you're waiting for the lights to change so you can cross safely. Someone beside you starts to step out before the light changes. You instinctively reach out and stop them, without thinking this through consciously. This is your brain doing what it's designed to do—i.e. responding quickly to potential risk. It's scanning for cues, drawing on past experiences and acting fast to keep you safe. That same shortcutting also happens in the workplace. When reviewing CVs, deciding who to promote or assessing someone's performance, our brains are still looking for the familiar,  comfortable and safe option. And this is where bias can creep in. Bias is human We all have biases, conscious and unconscious. This isn’t a flaw in our character; it's just how our brains work. Understanding this is just step one, however. Step two involves designing ways to make fairer decisions despite this bias. Here are just a few examples of how bias can show up at work: Affinity bias: We tend to favour people who remind us of ourselves, such as those from the same school, background or previous employer. Halo and horns effect: A first impression can colour everything that comes after, meaning no automatic second or third chances. Confirmation bias: We notice what supports our beliefs and filter out what doesn't, making it difficult to consider contradictory perspectives. Recency bias: We give too much weight to what happened most recently, making it almost impossible to accurately judge a year's worth of performance. Groupthink: We self-censor to keep the peace, staying silent when we disagree with the majority opinion, especially if this is supported by the boss. Blind spot bias: We spot bias in others, but not in ourselves. These biases don't just affect hiring, promotion and other people processes, they can also impact strategy, innovation and team dynamics. Moving past our biases To move beyond the biases we carry, we need to establish a structure around our decisions. This might involve using rubrics for hiring or incorporating calibration into performance reviews. It could mean inviting challenge at team meetings or encouraging others to ask what evidence we are using to make decisions. The point is: you don't have to rely on willpower to be fair. You can design for it. Leaders can start small by getting curious about the voices they listen to, the perspectives they seek out and the assumptions they hold.  You may not be able to eliminate bias entirely, but you can interrupt it—and this is where progress begins. Beyond being the right thing to do, this makes smart business sense. An understanding that everyone will be included, regardless of how they might differ from the boss, is the secret sauce that makes diverse teams work together. One decision. One meeting. One moment where you put structure around the shortcut is how you state. Because designing for fairness isn't just good practice—it's good business. Andrea Dermody is Founder of Dermody Inclusion and Diversity

Grit Young outlines 10 key strategies to help Ireland’s tech firms unlock real value from their investments in artificial intelligence Artificial intelligence (AI) deployments in technology companies often fall short of expectations due to a lack of preparedness for the level of change and costs involved. To succeed, tech companies must shift their focus from merely integrating AI into traditional business processes to fundamentally rethinking and reinventing their operations for an AI-first era. To help ensure success, companies in Ireland should seize the opportunity to explore 10 key areas that can drive AI value creation. 1. Turn potential into performance improvement Tolerance for low returns on AI spend has reached a breaking point as organisations across all sectors seek tangible yields from their investment in the technology. Tech companies need to establish clear frameworks to measure the operational and financial impact of any AI solutions they implement. This will help to demonstrate quantifiable business value and return on investment, thereby differentiating their offering in an increasingly crowded market. 2. Drive growth through an agentic AI future Agentic AI can execute complex tasks independently, potentially transforming how tech companies and their customers operate their businesses.   Tech companies must capitalise on the opportunities presented by agentic AI to secure an early mover advantage for themselves and their customers. The emergence of AI agents that can enhance an organisation’s workforce could provide a viable solution for Irish companies seeking to avoid relocating their headquarters to overseas locations, such as to the US, to attract a broader talent pool, as has occurred in the past. Consequently, these agents could enable Irish organisations to scale operations in Ireland, ultimately benefiting the domestic economy. 3. Adopt outcome-based pricing models Pricing needs to move from a purely software-as-a-service (SaaS) subscription model to an outcome-based model aligned with customer value expectations. Customers increasingly expect tangible results from the products they purchase. Simply providing access or usage will no longer be sufficient to justify a charge; a clear outcome will be required. The move to outcome-based pricing will not be easy. Demonstrating outcomes and communicating them to customers will require a major shift in current practices. However, tech companies will likely have no choice but to do this, given changing customer demand. 4. Tap into the power of the AI-first operating model The competitive advantage enjoyed by born-digital tech companies over legacy organisations is now being outstripped by AI-born companies and their distinct structures and operating cultures. Simply bolting AI onto an existing operating model will not be sufficient to bridge this competitive gap. Organisations will need to rethink and reimagine their structures and operating models to become more like this new wave of competitors.  5. Unlock the value of AI expertise Tech companies have an opportunity to position themselves as key partners in their customers’ AI transformation journeys by offering tailored solutions addressing both the infrastructural and operational aspects of AI adoption. Customers will increasingly ask for AI offerings that do not require the costly replacement of legacy IT infrastructure and architecture. This presents an opportunity for tech companies that can provide such solutions. 6. Develop new skill sets for the AI era Tech companies can help drive growth by equipping their workforce with future-ready skills through targeted training programmes. By embracing more immersive training and learning environments, such as virtual and augmented reality, tech companies can better assess skill gaps, provide on-the-job support and ensure employee capabilities are fit for purpose. Today’s employees are increasingly demanding continuous learning in and through the use of emerging technologies. Embedding generative AI in learning and development programmes will help meet these expectations. 7. Involve all business functions from the outset Changes in tax, trade and regulatory requirements should be anticipated and addressed up front. In a rapidly shifting global tax and regulatory environment, treating tax or local regulatory issues as an afterthought—particularly when pursuing a transaction or making an AI-driven change to your operating model—is fraught with risk. Finance, tax and legal professionals should be involved in the process from the outset, so that decisions can be made without the risk of giving rise to unforeseen financial, tax or legal liabilities. 8. Use AI to bolster cyber defences The EY 2024 Global Cybersecurity Leadership Insights Study found that AI delivered a 40 percent increase in cybersecurity teams' efficiency. The technology offers more effective and comprehensive cybersecurity through the automation of threat and vulnerability detection and response. The built-in learning and adaptation capabilities of AI can help organisations stay ahead of the next major threat. The same tools are available to bad actors, who can use AI to amplify their ability to identify vulnerabilities and penetrate systems by an order of magnitude. Thus, it is all the more important for organisations to meet heightened cyber threats by using AI to strengthen defences and maximise incident response when breaches do occur. While there are many good cyber education programmes in Ireland, widespread adoption of AI as a cyber defence tool remains rare. The Irish government is actively promoting cyber security programmes and Enterprise Ireland provides grants to client companies to help bolster their cyber defences.  9. Explore ways to free up capital for AI investment While investment in AI capabilities is driving higher valuations for many tech companies, the cost of such investments is placing many of the companies concerned under strain. The capital-intensive nature of AI investment may require tech companies to consider the divestiture of non-core operational elements and underperforming assets. Such sales can provide a fresh source of capital for AI investment and create more streamlined and profitable businesses.  The big technology companies constituting the foundation of Ireland’s foreign direct investment landscape have historically expanded through acquisition rather than divestiture. If these companies consider divesting, it could impact their operations in Ireland. How any new buyer decides to manage the business will depend on their overall strategy, which could prompt them to keep, expand or scale back their presence in Ireland. 10. Engage with regulators The European Union’s AI Act, Digital Services Act, and General Data Protection Regulation are just a few examples of the regulations governing tech companies in Europe. Governments around the world are also developing policies and regulations on topics that affect tech companies. Regardless of size, tech companies can seek to influence the regulatory direction of travel by collaborating with industry groups and national government agencies. The aim should be to seek a more harmonised global regulatory environment which supports innovation while protecting citizens and addressing societal concerns. Grit Young is Technology, Media and Entertainment and Telecommunications Industry Leader at EY Ireland

  In this week’s Sustainability/ESG Bulletin read about the Irish Central Bank’s focus on credible transition plans, the new National Semiconductor Strategy and a drop in national energy-related emissions. Also covered is the Carbon Border Adjustment Mechanism (CBAM) in Northern Ireland, a shift in corporate attitudes toward climate policy in EU businesses, a new global tool from the Network for Greening the Financial System (NGFS), The Circularity Gap Report 2025, and well as the usual resources and events.     Chartered Accountants Ireland ⭐The search for the next Chartered Star is now on! ⭐ Calling Chartered Accountants Ireland members: The 2025 Chartered Star competition celebrates the amazing work done by the Chartered community in support of the UN SDGs, whether that’s volunteering in your personal life, driving change in your workplace or through leveraging your ACA qualification. As well as the prestigious ‘ Chartered Star’ title and joining an incredible community, the winner will get the once in a lifetime chance to attend the One Young World Summit in Munich this November (3 – 6 Nov), representing Chartered Accountants Ireland and Chartered Accountants Worldwide.     IRELAND NEWS Central Banks highlights importance of credible transition plans The Central Bank of Ireland has highlighted the importance of credible transition plans as a means to build resilience in firms and contribute towards a sustainable net zero economy. Its publication Planning for the Transition to Net Zero - Our Perspective for firms aligning their business with a society that is transitioning to net zero aims to assist regulated firms to navigate the regulatory landscape, and provide an accessible roadmap for transition planning. Ireland's National Semiconductor Strategy Ireland’s new Semiconductor Strategy, Silicon Island has been officially launched by Minister for Enterprise, Tourism and Employment, Peter Burke. The new initiative is designed to strengthen Ireland’s role in the global semiconductor industry and fulfil a key Programme for Government commitment. Speaking at the launch, Minister Burke noted that: “From AI to quantum computing and the green transition, semiconductors are at the core of global innovation. This strategy is Ireland’s commitment to helping deliver on the European Chips Act and to becoming a global leader in this vital sector. Ireland is turning to chips as the next big opportunity.” Ireland’s energy related emissions now at their lowest level in over 30 years The Sustainable Energy Authority of Ireland (SEAI) has published the Interim National Energy Balance for 2024 which provides data on Ireland’s energy production and use last year.  The report shows that Ireland’s energy related emissions are now at their lowest level in over 30 years, falling a further 1.3 percent in 2024. This marks an overall decrease of 11 percent since carbon emissions targets were introduced in 2021 and the third consecutive year with an emissions reduction. This drop in emissions comes despite an increase in overall energy use. Increased use of bioenergy and technologies such as solar PV and heat-pumps meant that renewable energy supplied 14.5 percent of Ireland’s energy requirements last year, a slight increase on last year’s figure of 14 percent.  NORTHERN IRELAND/UK Preparing for the Carbon Border Adjustment Mechanism (CBAM) Invest Northern Ireland, the business advice and guidance service in Northern Ireland has published information on preparing for the Carbon Border Adjustment Mechanism (CBAM), the regulatory measure to prevent carbon leakage and encourage cleaner production processes and greener global trade practices (it applies to the cement, iron/steel, aluminium, fertilisers, hydrogen and electricity sectors). Preparing for the Carbon Border Adjustment Mechanism (CBAM)  describes the EU CBAM as well as the UK CBAM, an upcoming technical consultation launched by the HRMC (closing on 3 July 2025) and the steps businesses can take to prepare if they are affected. £1 million fund for resource efficiency solutions The independent not-for-profit Material Focus has launched a £1 million fund searching for practical, scalable solutions that enhance resource efficiency, reduce environmental impact, and encourage collaboration across the industry. As well as £150,000 funding per project, successful applicants to the Circular Electricals Fund will be able to engage in industry networking, receive communications support, and have access to industry data, research and trends. Find out more about the Circular Electricals Fund and how to apply before 14 August 2025.   EUROPE Report finds profound shift” in corporate attitudes toward climate policy in EU businesses New analysis from InfluenceMap, a nonprofit that tracks corporate lobbying, has revealed “a profound shift” in corporate attitudes toward climate policy among businesses in the European Union. 52 percent of companies tracked by the platform now demonstrating science-aligned or partially science-aligned climate policy engagement, which, the analysis states, marks a significant increase from 24 percent since the presentation of the EU Green Deal at the start of the 2019 legislative cycle. Meanwhile, the proportion of companies with misaligned climate policy engagement has dropped from 34 to 13 percent over the same period.    WORLD News from the Network for Greening the Financial System The Network for Greening the Financial System (NGFS), the voluntary organisation of central banks and supervisors committed to taking climate risks into account in their work, has developed the first freely available tool for analysing the potential near-term impacts of climate policies and climate change on financial stability and economic resilience. The scenarios model four climate shock scenarios, highlighting both physical and transition-related risks with detailed sectoral and macroeconomic insights. It is expected that the dataset will be used for climate stress testing and risk assessments, helping institutions inform decisions in areas like investment, regulation, risk management and monetary policy. Report finds global material consumption outpacing population growth The Circularity Gap Report 2025 (CGR), published in collaboration with Deloitte Global, has found that global material consumption is outpacing population growth and generating more waste than recycling systems can handle. The 2025 issue of the annual global assessment of the circularity of the world’s economy underscores the need for global circular economy targets, system-level transformation, and multilateral collaboration. Produced by Circle Economy, an impact-driven organisation dedicated to accelerating the global shift to a circular economy, the reports aim to accelerate the transition to a circular economy through gathering and sharing data to empower others to make informed decisions and take action toward circularity. Technical Round Up (From our colleagues in Professional Accounting) The Global Reporting Initiative (GRI) has written to the European Financial Reporting Advisory Group (EFRAG) setting out its recommendations of how simplification of the European Sustainability Reporting Standards could be achieved. In its response to EFRAG’s public call for input on the matter, GRI has stressed the importance of three key considerations for the simplification process; Europe needs to remain a global leader in promoting the green economy Effective corporate reporting is a key enabler for sustainable development Simplification is welcome – if it is defined, applied and managed well EFRAG has released the event materials from its “VSME in Action: Empowering SMEs for a Sustainable Future” event, which was held on 7th April 2025. EFRAG has also released a series of 10 educational videos focused on the VSME reporting standards. Twenty consumer authorities, including Ireland’s Competition and Consumer Protection Commission have issued an open letter to the fashion retail sector on the use of environmental claims including advising fashion retailers to avoid vague and general terms. Did  you know? Coldplay has partnered with The Ocean Cleanup to create a limited edition of its 2024 album Moon Music using vinyl pressed from plastic waste recovered from Guatemala’s Rio Las Vacas. The ‘Notebook Edition’ LP is made with 70 percent river plastic and 30 percent recycled bottles, highlighting the band's continued support for ocean cleanup initiatives. These efforts are part of Coldplay’s broader sustainability strategy, which has already reduced tour emissions by 59%. (Taken from SpeedRead Sustainability #52: Weekly Highlights) Jobs Accounting for Sustainability (A4S) is looking for a Director to lead and expand its European CFO Programme – a key leadership role helping finance leaders embed sustainability into business strategy and operations. This is a chance to work with CFOs from some of Europe’s most influential organisations and drive systemic change through finance. The successful candidate will play a vital role in shaping A4S strategy to 2030 and amplify the impact of our work across the region. 📅 Deadline to apply: 10 June 🔗 https://lnkd.in/eh3W-ssP Articles New Leaving Cert course aims to encourage climate activism (RTÉ News) Sustainability-focused funds surpass €6 trillion (Law Society Gazette) Podcast Outrage + Optimism: The End of Oil: Inside the Hidden Decline of Fossil Fuels | Earth Day Special (54 mins) Events   Dublin Chamber, The Sustainability Academy: Internal Sustainability Integration - Building a Sustainable Workplace Culture This workshop is for professionals in internal-facing roles, such as finance, operations, and HR. It focuses on integrating sustainability practices within an organisation’s internal mechanisms, highlighting how these practices can enhance employee engagement, operational efficiency, and the workplace environment.   Virtual: Mon 26 May 2025 | 9.30am - 12.30pm   EPA, EPA Annual Climate Change Conference 2025 The EPA Annual Climate Change Conference, "Emissions Trading and The Carbon Border Adjustment Mechanism" will be held on Wednesday 28 May 2025 in Dublin Castle. In person, May 28, 2025   UN Sustainable Development Solutions Network (SDSN), Sustainable Development Report (SDR) 2025 launch The UN SDSN will launch its report which this year has a unique focus on reforming the Global Financial Architecture (GFA) and scaling up global financing flows to support the SDGs through 2030 and beyond. The launch event will present key findings from the SDR 2025, including the updated SDG Index and Dashboards, and will feature insights from high-level leaders and experts on transforming the GFA to better serve sustainable development. Virtual, Tuesday, 24 June, 2024, 8:00 AM to 9:45 AM EST.     Enterprise Northern Ireland, Funding for Growth: Transitioning Your Business to Net Zero The third session in a three-part in-person series for Micro and Small Businesses, which also includes events on Accessing Debt Finance and Grant & Equity Finance, this session will cover the importance of net-zero in future-proofing your business, support available to help finance your transition to net-zero, and how small businesses are leading the charge to net-zero In person, Thursday 26 June 2025, 9:30am to 1:30pm, Venue: Craigavon Industrial Development Organisation, Portadown, Cost: Free     Sustainability Centre You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.

The CCAB-I Insolvency Committee has today published a new Creditors Voluntary Liquidation Statutory Meeting Handbook. The purpose of the Creditors Voluntary Liquidation (CVL) Statutory Meeting Handbook is to aid directors in the pre-appointment period and insolvency professionals in the post appointment period. This document provides a compendium of statutory meeting templates and guidance around the various meetings during the course of a CVL. It also assists Liquidators in complying with legislative and SIP requirements when conducting statutory meetings, reporting to creditors and approval of remuneration. Additionally, on 10 June, Derek Wilson, a licensed insolvency practitioner and experienced insolvency monitor, and Sarah-Jane O’Keeffe, director at Azets, along with Chartered Accountants Ireland are hosting a free webinar which will provide an overview of best practice and introduce the new Creditor Voluntary Liquidation workbook. To register for this free webinar, click here.  

On 21 May, the Ulster Society hosted for a legal webinar with A&L Goodbody focusing on legal issues around Secured Lending and Financing.   This session with A&L Goodbody’s finance team covers: Types of facility agreement (Facility letters/LMA) Security types, land/assets Other types of financing Special purpose lends  Other topical issues – ESG, Insurance requirements, ECTEA, NSIA Tips for approaching refinancing (lead-in, diligence etc) A recording of this webinar is available to view HERE A copy of the slides from this presentation are available to view HERE

Costs have increased for almost 80% of small Irish businesses in the past six months, with staff costs the biggest financial challenge faced by SMEs, according to the inaugural SME Business Sentiment Survey from Chartered Accountants Ireland and GRID Finance. The survey, which will be repeated every six months, will measure and track the experiences, confidence and sentiment of a range of SMEs, including small accounting practices, doing business in Ireland today.   Staff costs the biggest financial challenge  3 in 4 (77%) respondents say that business costs have increased in the past six months, with staff costs the biggest financial challenge facing 2 in 5 (37%). Small practices were particularly challenged by staff costs (cost of salaries and other benefits and compensations), with half citing it as their single biggest financial issue.  Operational costs (24%) and regulatory compliance costs (14%) were the other biggest financial challenges facing SMEs, ahead of working capital management and access to funding. 57% identified regulatory compliance as the area in which they most need government support (rising to 75% amongst small practice respondents).  Eoin Christian, CEO, GRID Finance said    "These findings align with our own research conducted earlier this year – rising costs, particularly staff-related expenses are creating significant pressure on Irish SMEs. While these challenges are real, they also represent an opportunity for SMEs to take stock, streamline operations and invest in smart, sustainable growth strategies. At GRID Finance, we continue to advise our clients to be proactive by forecasting future cash flow needs, exploring flexible funding options and staying ahead of regulatory requirements like auto-enrolment.      “We feel that it's vital that both Government and financial providers evolve in tandem with the changing landscape. With the right supports and partners, Irish SMEs can not only weather this period of cost pressure, but emerge from it stronger, more resilient and better prepared for the future” Auto-enrolment, due to come into effect in January 2026 met with a muted response. Only 2 in 5 (40%) of respondents feel that they have been adequately informed of the steps needed to implement it in time for its planned launch.  Cróna Clohisey, Director of Members and Advocacy, Chartered Accountants Ireland said  “The Government’s announcement that it will defer the launch of auto enrolment to January 2026 is welcome, particularly in view of the feeling of unpreparedness many businesses expressed in this survey.  Many remain very unclear as to what is expected of them in advance of the new system launching. Over the next six months, it is imperative that Government embarks on a concerted communications and awareness campaign to bridge this information deficit and equip businesses with the support and guidance they need to make auto enrolment the success it needs to be.”  Attitudes to & use of Government supports The survey revealed a significant gap between demand for, and uptake of government supports called for by SMEs: Tax relief or incentives – 40% called for these, but only 16% of total survey respondents report availing of them  Access to grants or loans - 31% called for these, but only 30% of total survey respondents report availing of them  Meeting energy costs – 28% called for these, but only 14% of total survey respondents report availing of them.  Attitudes to the effectiveness of the supports are mixed, which may go some way to accounting for the gap between demand and uptake:  5% feel supports for reducing regulatory and compliance burdens are effective.  22% rate access to grants or loans as effective. 23% believe supports for training and upskilling are effective.  Commenting Cróna Clohisey said “There is an evident mismatch between the need for supports and the uptake of those on offer. In the case of tax reliefs and access to grants or loans for example, this may be attributable to a perceived lack of accessibility, particularly for time and resource-constrained SMEs who simply find the application process too cumbersome. While the breath of current Government supports in these areas is positive, further steps need to be taken to ensure that business reliefs such as these are not overly difficult to claim if their effectiveness is to be meaningfully felt by small businesses.”    Mixed profitability and projections for coming year  Almost 3 in 10 (28%) report their business profitability has increased in the past six months, while a similar number (26%) report it has decreased. Small practice respondents reported greater stability, with 56% saying profitability remained the same, and only 15% saying it has decreased. For small business respondents, 30% reported decreased profitability in the past six months.     Despite the various economic headwinds facing the economy, there was a degree of optimism amongst respondents about their prospects for the coming year. 27% of respondents forecasted their business to be either somewhat or significantly better off by this time next year.  Overall, sentiment was more negative than positive however, with 36% saying they will be worse off.  Less optimism in the face of global headwinds   This negative sentiment was also evident when it comes to the broader economic environment, with a majority (74%) feeling less optimistic about the wider economy’s prospects compared to six months ago. Compounding this are ongoing tensions and uncertainty in global trade which have already impacted Irish business sentiment. 62% of respondents report that their business operations have been impacted by global trade tensions and tariffs and only 14% say they are prepared for a further escalation of such tensions.  The SME Business Sentiment Survey from Chartered Accountants Ireland and GRID Finance can be read in full here.   ENDS About the SME Business Sentiment Survey  The SME Business Sentiment Survey is conducted by Chartered Accountants Ireland and GRID Finance, the Institute’s Official Independent Lender Partner. The inaugural survey was conducted by Coyne Research between 4 and 21 April 2025 and will be repeated every six months. Approximately 300 members were surveyed from organisations employing fewer than 250 people.  

In Irish news this week, Revenue has issued updated guidelines for charging interest on late payment of tax and it has also produced a series of information sessions on the Residential Zoned Land Tax ahead of the 23 May 2025 pay and file deadline. In UK news, we want to hear your views on HMRC’s plans to reform behavioural penalties and we highlight a new peer led initiative designed to help agents get ready for Making Tax Digital for income tax. In International news, the EU has agreed to simplify the VAT rules on distance sales and imports.  Ireland Revenue has updated the guidelines for charging interest on late payment through Revenue Debt Management Services.  Revenue has produced a series of information sessions on the Residential Zoned Land Tax ahead of the 23 May 2025 pay and file deadline.  UK  We want to hear your views on HMRC’s plans to reform behavioural penalties.  Read about a new peer led initiative designed to help agents get ready for Making Tax Digital for income tax.  International  The EU has agreed its position on the VAT rules directive to simplify tax collection for imports and certain distance sales.  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 post EU exit corner here. 

In this week’s post EU exit corner, we bring you the latest guidance updates and publications relevant in the post EU exit environment. The most recent Trader Support Service bulletin is also available as is the latest Brexit and Beyond newsletter from the Northern Ireland Assembly EU Affairs team. The UK-EU Trade and Cooperation Agreement Domestic Advisory Group (DAG), which the Institute is a member of, has published a statement ahead of the UK/EU summit which takes place in London today. Miscellaneous guidance updates and publications Apply to import duty-paid EU excise goods into Northern Ireland, as a tax representative, 4-digit procedure to additional procedure code correlation matrix for Final Supplementary Declarations, 4-digit to 3-digit procedure to additional procedure code correlation matrix for imports, 4-digit to 3-digit procedure to additional procedure code correlation matrix for inventory exports, 4-digit to 3-digit procedure to additional procedure code correlation matrix for inventory imports, Simplified Process for Internal Market Movements (SPIMM) or UK Carrier (UKC) Scheme: Customs Declaration Service Data Element Completion Guide, and 4-digit to 3-digit procedure to additional procedure code correlation matrix for exports.

Issue 131 of HMRC’s latest Agent Update is available. HMRC has also shared with us the below additional information in support of this. This is intended to provide useful additional background information/context. Address rejections Investigations are continuing on Self-Assessment (SA) registrations that are being rejected on the basis of the address. This is related to routine enhancements HMRC is continually introducing to ensure taxpayer information is kept secure. HMRC’s hints and tips article in Agent Update 128 details some of the ways in which agents themselves can help reduce the number of rejections, particularly by ensuring that the address from the Royal Mail Postcode Finder is used in the client’s Personal Tax Account and that this matches any subsequent SA repayment claims.   HMRC does not currently envisage being able to adopt a solution to this issue in the short term therefore we have been asked to remind agents to continue to report instances of rejection. Missing PAYE Codes HMRC continues to examine where PAYE codes do not appear on the PAYE Desktop Viewer. It has been established that where there has been no change to a PAYE code, then the previous year’s code is carried forward or uplifted following the start of the new tax year. In these circumstances the code is not visible on PAYE Desktop Viewer.  The PAYE Desktop Viewer will, however, display codes sent to employers.   Auto coding queries It has been confirmed that a taxpayer may still have PAYE expenses coded in their tax code despite ceasing SA because those expenses are still possibly relievable. Ceasing SA will not remove expenses already coded. It is therefore the taxpayer’s responsibility to check their current tax code and notify HMRC if those expenses are no longer relevant. When a taxpayer ceases SA, the link between PAYE and SA is broken and therefore any data relating to employment expenses from the return is sent to be updated. Please note that if a taxpayer or agent has updated HMRC in the current tax year to advise of a change to a tax code, the expenses on the latest return submitted will not alter that code. This is because the tax return is current year minus 1 hence the in-year update from the taxpayer/agent will be the most up to date information. If a taxpayer believes that the tax code is incorrect they should follow HMRC guidance on this. SA returns filed after 30 December: tax code adjustments HMRC processes a vast amount of data each year. To do this, it carries out planning activities and decides the timeline of those processes which depend on resource availability, requirements, and priorities. On some occasions HMRC may need to turn off processing of specific information if it believes it will impact on the delivery of other functions. HMRC processes PAYE codes before the end of the filing deadline for SA as processing in January allows taxpayers to review and advise of any changes needed before the new tax year starts. You can read more about this process on GOV.UK. SA returns which require clerical overview because of an error may miss the deadline for the PAYE code review hence these tax codes will therefore include the latest available information.

In this week’s miscellaneous updates, we bring you the following: HMRC has clarified its position on the claim notification process for certain claims for R&D tax relief and a new tool has been launched which aims to help businesses and individuals understand HMRC compliance checks. A new Brief on the use of VAT grouping within the care industry was recently published and the Scottish Government has published the tax advisory group minutes for November 2024. HMRC has published guidance on how the changes to company size thresholds from 6 April 2025 affect the application of the off-payroll working rules and the latest schedule of HMRC Talking Points live and recorded webinars for tax agents are available for booking. Spaces are limited, so take a look now and save your place. And finally, check HMRC’s online services availability page for details of planned downtime and the online services affected. R&D tax relief claim notification process HMRC has recently advised us that their published guidance on claim notifications available from 8 September to 17 October 2024 was not correct and could have misled taxpayers (and their advisers) into believing that a claim notification was not needed where a claim for a previous period which began before 1 April 2023 was made via an amended corporation tax return submitted after that date. Recognising this, HMRC recently confirmed that they will accept R&D tax relief claims for periods for which a claim notification was due but has not been received if both of the following two conditions are met: The company made a valid claim in an amendment to a corporation tax return for an accounting period beginning before 1 April 2023, which was submitted to HMRC between 1 April 2023 and 30 November 2024 inclusive, and The accounting period for which a claim notification form was not delivered, but ought to have been, had a claim notification period ending between 8 September 2024 and 30 November 2024. Revenue and Customs Brief 2 (2025) Revenue and Customs Brief 2 (2025): the use of VAT grouping within the care industry has been published. This Brief provides information about the treatment of state-regulated care providers that form a VAT group with non-state-regulated providers of welfare services. It explains: how HMRC treat state-regulated care providers who form a VAT group with a non-state-regulated care provider, actions HMRC will take with new VAT group applications, and actions HMRC will take with existing VAT groups. These VAT group structures involve both: a provider which is not state-regulated, meaning they are not registered with the Care Quality Commission in England or the equivalent bodies in Northern Ireland, Scotland and Wales, and a provider that is state-regulated. HMRC has identified a growing use of VAT grouping structures by state-regulated care providers to recover VAT on costs that relate to supplies of welfare services that would otherwise be exempt from VAT. These structures incorporate an unregulated entity into the supply chain between the state-regulated provider and the local authority or NHS ICB to which the supply is made. Identical supplies made to private individuals remain exempt from VAT. HMRC consider these VAT grouping structures to be a form of tax avoidance. The Briefing therefore sets out the action that HMRC has begun taking as a result.   HMRC processes PAYE codes before the end of the filing deadline for SA as processing in January allows taxpayers to review and advise of any changes needed before the new tax year starts. You can read more about this process on GOV.UK. SA returns which require clerical overview because of an error may miss the deadline for the PAYE code review hence these tax codes will therefore include the latest available information.

HMRC is seeking industry experts in tech development, Artificial Intelligence, life sciences and advanced manufacturing sectors to join its Research and Development (R&D) Expert Advisory Panel.  Apply to join the panel here. The panel’s work will involve: providing insights into innovative R&D methods and projects,  assisting HMRC in improving guidance to ensure it is clear, targeted and offers the support required for specific high growth technical sectors,  providing sectoral feedback by acting as a forum for discussing sector-specific issues related to the administration of R&D tax reliefs, and   supporting HMRC’s communications and messaging on R&D tax relief.  Applications close on 8 June 2025. Email HMRC if you require any further assistance.