Revenue recently published guidelines for the Business Resumption Support Scheme (BRSS).  BRSS will support businesses significantly impacted throughout the COVID-19 pandemic, even during periods when restrictions were eased.  To qualify, the business must demonstrate a significant reduction in trade during the period 1 September 2020 to 31 August 2021.  Eligible businesses can claim an Advance Credit for Trading Expenses.  The portal for registering and making a claim for the BRSS will open in early September. Revenue will publish details on how to register and details on the claim portal closer to the registration date. See Revenue’s BRSS webpage and guidelines for more details. 

Revenue extended the deadline for the completion and submission of the EWSS Eligibility Review Form in respect of June 2021 to 15 August 2021. The eligibility review form in respect of July 2021 is also due to be submitted on the same date.   The CCAB-I made a submission to Revenue on foot of representations from members to call for an extended EWSS Review Form deadline.  In a letter in response to the CCAB-I’s submission, Revenue set out that in so far as monthly turnover figures cannot be readily accessed for the purpose of completing the EWSS Eligibility Review Form, businesses may use the average turnover as derived from their bi-monthly (or other periodic) VAT return data to calculate the monthly turnover value for the review form.  The deadline extension is also noted in Revenue’s press release reminding businesses of key supports available as the economy continues to reopen.

HMRC has issued a reminder that individuals can claim for working from home expenses quickly and easily online. “Your clients or their employees may be able to claim tax relief for additional household costs if they have to work at home on a regular basis, either for all or part of the week. Additional costs include heating, metered water bills or business calls that have been incurred wholly, exclusively and necessarily as a direct result of working from home. They don’t include costs that would stay the same whether employees are working at home or in an office. Your clients or their employees can apply quickly and easily using the HMRC online service, which is now open for claims covering periods up to 5 April 2022. For more information go to GOV.UK and search ‘tax relief job expenses. Employees who have to complete a Self-Assessment tax return will need to claim working from home expenses via the employment income pages of their tax return instead of the digital service. For further information, please find the recent press release on P87 WFH expenses here: Working from home? Customers may be eligible to claim tax relief in 2021 to 2022 - GOV.UK (www.gov.uk)”

SEISS grant 5, upcoming CJRS deadlines, a reminder of the changes to the CJRS from 1 July, and the statutory sick pay rebate scheme all feature this week. SEISS grant 5 Eligible taxpayers are now able to make claims for SEISS grant 5. From mid-July, HMRC has been contacting taxpayers who may be eligible to let them know their earliest personal claim date and to ensure they are aware of the need to calculate turnover for most claimants. Find out if a claim is possible by checking all criteria in stages 1, 2 and 3 are met including the turnover test which will be required to be met by most taxpayers. This test considers how much turnover has gone down by in the 2020/21 tax year due to the pandemic. The guidance on the turnover test has been updated recently. Taxpayers who were not eligible for SEISS grant 4 will not be eligible for SEISS grant 5 as HMRC is using the same tax returns to determine eligibility for both grants. HMRC are stressing that taxpayers do not need to submit their 2020/21 Self-Assessment tax return at this time, even though the taxpayer is being asked for their 2020/21 turnover. Once again, agents will not be able to apply for SEISS grant 5 on behalf of their clients. HMRC has also been contacting some taxpayers who may be eligible for SEISS grant 5, if they started trading in 2019/20, to verify their identity. HMRC is asking taxpayers for one form of identity and three months’ worth of bank statements from the 2019/20 tax year. To confirm the contact is genuine, taxpayers can go to HMRC trusted contacts on GOV.UK. Get ready for the invitations to claim 5th SEISS Grant HMRC says claiming online is the quickest and easiest way for customers to get their grant. To get started, customers can search ‘SEISS’ on GOV.UK anytime from their personal claim date until 30 September 2021.   To confirm their eligibility and make their claim, customers will need their:  Turnover figure for a 12-month period from April 2020 to April 2021 Turnover figure for 2019/20 or 2018/19 if required. National Insurance number: customers can find this on the HMRC app, their online Personal Tax Account (PTA) or by asking their tax agent if they have one. Self-Assessment Unique Taxpayer Reference (UTR) number: customers can find this on their Self-Assessment papers, in their PTA or by asking their tax agent. Government Gateway user ID and password: To avoid delays, customers should check that they can log in to the Government Gateway before their personal claim date. If customers don’t have an account, or have forgotten their details, they can follow the instructions on GOV.UK by searching ‘HMRC services: sign in or register’. Customers should also check that their contact details are correct in their Government Gateway account. Bank account number and sort code: For a building society account, customers should include the roll number if they have one. The CJRS The deadline to submit  CJRS claims for periods in July 2021 is Monday‌‌ ‌16‌ August 2021, unless reasonable excuse is available for late submission. Amendments to July 2021 CJRS claims must be made by Tuesday 31 August 2021. Changes from 1 July 2021 From Thursday 1 July 2021, CJRS grants cover 70 percent of employees' usual wages for the hours not worked, up to a cap of £2,187.50. In August 2021 and September 2021, this will then reduce to 60 percent of employees' usual wages up to a cap of £1,875. Employers will need to pay the 10 percent difference in July (20 percent in August and September), so that they can continue to pay their furloughed employees at least 80 percent of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. Employers continue to be required to pay the associated employee tax and National Insurance contributions to HMRC in these months. The employer contribution is a condition of applying for the grant; not paying this means the employer will need to repay the whole of the CJRS grant and they may not be able to claim for future CJRS grants. For the hours not worked employers can continue to choose to top up their employees' wages above the 80 percent level or cap for each month, at their own expense. Furloughing flexibly Employers don’t need to place all their employees on full furlough. They can use the CJRS flexibly to bring their employees back to work for some of their usual hours. Employers can claim for a portion of their usual wage costs for the hours spent on furlough. Statutory Sick Pay Rebate Scheme    The statutory sick pay (“SSP”) rebate scheme continues to provide financial support to small and medium-sized employers. Employers with fewer than 250 employees who have paid SSP to employees for COVID-19 related sickness absence may be eligible for support. Any repayment of SSP covers up to two weeks of the applicable rate of SSP. For more information on eligibility and how to make a claim, check the guidance.

Issues experienced by taxpayers and agents in respect of the 30 day residential property disposal service have been under discussion with HMRC. HMRC has now published further details of the temporary solution to allow taxpayers to offset a UK property disposal return CGT overpayment against another Self-Assessment tax. HMRC is also continuing to work on updating all the guidance on this service and is exploring a longer-term resolution to the offsetting issue. The two documents now published are as follows:- HMRC Offset of UK Property Capital Gains Tax; and HMRC UK Property Disposal Question and Answer.

Julia Rowan answers your management, leadership, and team development questions. Q. I get no feedback from my boss unless he’s unhappy about my work. I work hard and give the people on my team plenty of feedback, but I feel very unsure of myself. A. Of course, your boss should give you feedback. You could try to change him, but (and sorry for the cliché) the only person you can change is yourself. So, let’s look at what’s happening for you: your boss is not communicating with you and you are telling yourself a story (he doesn’t appreciate me, my work is sub-standard) that undermines your confidence. What if you trusted yourself and told yourself a different story? For example, ‘Isn’t it great that my busy boss can cut to the chase about my work?’ or ‘Isn’t it interesting that somebody that senior does not see the importance of giving feedback?’ These stories free you from feeling bad about your boss’s behaviour and allow you to be easier with the situation. Funnily enough, when we lose our anxiety, what we are searching for often manifests. As there is little communication, it could be an idea to write a short weekly email to your boss outlining, for example: Three main things your team progressed/achieved this week; Three main priorities for next week; and Issues impacting the team. That way, you build up a record of communication about progress centred on goals and priorities. Then, your boss will be aware of what’s going on and can respond if he chooses. On another note, it may be useful to pay special attention to your longer-term career development. Think about what you really want in the short- to medium-term (lead a team, manage a project, broaden your capabilities, specialise) and find someone who can be a listening ear. Also, focus on building relationships across your organisation to create a wider network of people who can support you. Q. I’ve just been appointed to lead the dream team. They’re hard-working and talented. But I can’t believe they gave me the job, and I wonder if I’m the right manager for them. A. If this team is experienced and motivated, they don’t need much direction – you could focus on coaching and facilitating the team, both individually and as a group. Here are a few things you could do: Develop your coaching skills. Coaching is a great way to build people’s competence and confidence through questioning and listening. It also helps the leader to work from a more strategic place. Help the team become more self-sufficient by locating and sharing resources and encouraging team members to share challenges and opportunities. Use your team meetings to challenge the team. Ask them where they want to get to – both individually and as a team – and start planning your way there. More importantly, you need to give that imposter syndrome the heave-ho. You got the job for a reason (if it helps, ask the interviewers why they chose you), but leaders need to develop a special blend of ‘confident humility’ – the confidence to acknowledge their strengths and the humility to keep learning. We do everyone a favour when we acknowledge our strengths; by acknowledging them, we make them available to others. Julia Rowan is Principal Consultant at Performance Matters, a leadership and team development consultancy. To send a question to Julia, email julia@performancematters.ie.

Bríd Heffernan provides an update one year after the Monitoring Group issued its proposed reforms to international standard-setting boards. In July 2020, the Monitoring Group issued its much-anticipated paper outlining reforms to the international standard-setting boards – namely, the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA). This article will reflect on the reforms proposed in the July 2020 Monitoring Group paper and analyse where the reforms stand one year on. The journey so far The Monitoring Group is a group of international financial institutions and regulatory bodies committed to advancing the public interest in international audit standard-setting and audit quality. The last set of reforms faced by the standard-setting boards were agreed to in 2003 by the International Federation of Accountants (IFAC) and the Monitoring Group. These 2003 reforms created the Public Interest Oversight Board (PIOB), which was tasked with increasing investor and stakeholder confidence in the standard-setting boards and ensuring that standards are responsive to the public interest. The 2003 reforms put IESBA and IAASB under the oversight of the PIOB, thus making them independent of IFAC. This, in turn, led to IFAC providing support to the standard-setting boards. The proposed July 2020 reforms do not change this structure, but they do propose changes to address the Monitoring Group’s concerns. Effectiveness reviews were built into the 2003 reforms. Every five years or so, the Monitoring Group conducts an effectiveness review and makes recommendations to improve the system. In the early reviews, the recommendations were made and agreed upon, and enhancements were implemented. However, the most recent review in 2015 resulted in the 2017 Monitoring Group consultation paper. Since then, there has been extensive discussion between the Monitoring Group, IFAC and other stakeholders culminating in the issuance of the July 2020 Monitoring Group paper. Monitoring Group concerns The July 2020 Monitoring Group paper titled Strengthening the International Audit and Ethics Standard-Setting System set out recommendations for reforming the standard-setting process. Below is an overview of the Monitoring Group’s main concerns that led to the recommendations, which are also discussed later in this article. The public interest is not given sufficient weight throughout the standard-setting process. Stakeholder confidence in the standards is adversely affected as a result of the perception of undue influence of the accountancy profession on the following two grounds: IFAC’s role in funding and supporting the standard-setting boards and running the nominations process; and Audit firms and professional accountancy organisations providing the majority of standard-setting board members. Standards are not as timely and relevant as they need to be in a rapidly changing environment. IFAC’s response As IFAC operationally runs the standard-setting boards, the Monitoring Group’s concerns and recommendations directly impact IFAC. In an update to its members, IFAC’s Chief Executive, Kevin Dancey, stated that IFAC was focused on agreeing on a workable set of changes that would enhance stakeholders’ trust and confidence in the standard-setting process. These reforms also provide an opportunity for IFAC to address its own issues with the current process, which are: That PIOB members are almost exclusively from a regulatory background. IFAC believes that the PIOB should have a multi-stakeholder composition and perspective. That the PIOB must be more transparent, and there is a need for clarity on its role and the role of the standard-setting boards and how the PIOB carries out its mandate. 2020 recommendations  The July 2020 Monitoring Group paper proposals retain the two standard-setting boards with the same mandates, and they will be retained in a similar size (16 members, down from 18 members). The respective roles of the PIOB and the standard-setting boards are also clarified. The Monitoring Group’s proposals clarify that the standard-setting boards are responsible for developing, approving and issuing the standards. The role of the PIOB is oversight. Combined with making the workings of the PIOB more transparent, this is a step forward. Responsibility for ensuring that the standards were responsive to the public interest was a source of confusion in the past. Was this the responsibility of the standard-setting boards or the PIOB? The July 2020 Monitoring Group paper contains a public interest framework, which confirms that it is the standard-setting boards’ responsibility to certify that the standards are responsive to the public interest. The PIOB will also have to certify that the standards are responsive to the public interest as part of its oversight function. Both the PIOB and the standard-setting boards will have a multi-stakeholder composition. For the PIOB, this means that its members will not simply be representatives of the Monitoring Group members. And for the standard-setting boards, this will ensure a diversity of views at the standard-setting table. Recognition of the significant role of both IFAC and the accountancy profession is a key improvement over the 2017 consultation paper. Current practitioners can still become members of the standard-setting boards, up to a maximum of five practitioners. Impact of the changes on IFAC With respect to IFAC, its ongoing role has been acknowledged in the July 2020 Monitoring Group paper: IFAC will continue to provide operational support to the standard-setting boards, the only difference being that it will be set out in a formal service level agreement. IFAC’s role in adopting and implementing the standards, promoting the standards, and monitoring their adoption and implementation has been acknowledged as an important ongoing responsibility. There will be a change to the nominations process for IAASB and IESBA members, however. The process is currently run by the IFAC Nominating Committee, which is chaired by the IFAC president. To ensure adequate independence in the nominations process and ensure good governance, the July 2020 Monitoring Group paper recommends that the nominations process sit under the supervision of the PIOB. The legal structure will also change. Currently, the standard-setting boards are committees of IFAC. The July 2020 Monitoring Group paper calls for the standard-setting boards to sit under a separate legal entity, independent to IFAC. Furthermore, changes have been recommended to the staffing model for the standard-setting boards. The proposals call for an increased staff complement and for staff to have greater responsibility for drafting the standards with less responsibility in the hands of the standard-setting boards. Since IFAC provides operational support for the standard-setting boards, this request for an increased staff complement will impact IFAC. Transition planning phase It was assumed by many observers that, with the issuance of the July 2020 Monitoring Group paper, all would be known. However, five years after the initial review, the reform process is only at the end of the beginning, seeing as many of the details remain unresolved. According to IFAC, the July 2020 paper is a significant improvement on the proposals outlined in the 2017 consultation paper. It is evolutionary rather than revolutionary. It sets out several high-level recommendations and principles that can be worked with. Right now, IFAC and the Monitoring Group are in the transition planning phase of the reforms – but many outstanding items must yet be worked through. The transition planning phase consists of IFAC and the Monitoring Group developing an implementation plan by participating in 26 workstreams. The goal is to work through all outstanding issues and finalise the recommendations in 2021. The implementation of the recommendations will then take place over the next three years, up to 2024. The changes will be phased in to ensure a smooth transition and no disruption to the current standard-setting process. Funding of the reforms  It is clear from the July 2020 paper that there is no new funding model. The profession’s resources were stretched before COVID-19, and this limitation will be exacerbated post-pandemic. This represents a significant fiscal constraint on implementing the reforms. IFAC’s funding for 2021 is down 13.5% from 2018, and there is no improvement anticipated in the funding outlook beyond 2021. Therefore, a key challenge is to reconcile the cost of the Monitoring Group’s recommendations to the funding available. Next steps As noted, the process is currently in the transition planning phase. The goal is to resolve all outstanding issues in 2021 while reconciling the cost of the recommendations to the funding available and reaching a deal on the phased implementation of agreed changes by 2024. While there is a long way to go before the reforms are implemented, it is positive to see progress that ultimately serves the public interest. Bríd Heffernan is Associations & Institutions Leader at Chartered Accountants Ireland.

Jane O’Hanlon explains the common tax-related issues facing members in business and how to deal with them before Revenue comes knocking. As a tax advisor working in a specialised tax practice, I encounter similar tax issues in various businesses. This article will focus on the most critical issues and help ensure that your business is tax compliant. What should I do when Revenue knocks on my door? The answer to this depends on the nature of the knock! Any correspondence issued by Revenue must be looked at carefully to understand the purpose of the query. A letter might issue from Revenue with queries due to an incorrect entry on a tax return (referred to as an ‘Aspect Query’ letter). Where a business files a VAT return and is in a VAT recovery position, standard VAT verification letters are often issued by Revenue seeking documentation to support the VAT refund due. This type of correspondence is routine and while it should be dealt with promptly, it should not result in undue concern. If an error is discovered as you prepare your response, it is usually possible to make a ‘qualifying disclosure’ to Revenue. By making a qualifying disclosure, you can reduce the penalties payable, avoid prosecution, and avoid publication in the list of tax defaulters. A disclosure is unprompted if it is made before notification of a Revenue audit is received. Any disclosures in relation to items covered by the audit made after the audit notice is received is prompted, and the penalty reductions for unprompted disclosures are higher than for prompted disclosures. However, Revenue recently indicated that it intends to move disclosures made by a business under an ‘Aspect Query’ to the ‘Prompted Disclosure’ category. Although publication can still be avoided, higher rates will be applicable if penalties apply. When a Revenue audit letter issues, depending on the tax head and the period covered, the taxpayer should conduct a full review of all tax matters. Common problems include businesses making cash payments to casual staff without PAYE, incorrect claiming of VAT input credits, incorrect operation of benefit-in-kind (BIK), and incorrectly claiming a tax deduction for income or corporation tax purposes. When that audit letter is received, it is essential to at once consider whether the business will need to make a prompted qualifying disclosure. If it does, it can write to the Revenue auditor requesting time to prepare the disclosure. In my experience, the time spent at this stage is well worth it as it often results in the audit running more smoothly and concluding promptly. It is not in the interest of any business to have an audit process continue any longer than it needs to. Therefore, it is crucial to ensure that a full disclosure, if needed, is made and that all supporting documentation is gathered and available to the auditor. Cooperation is the best policy. * Review your tax compliance position on VAT and PAYE. Cooperation is the best policy when dealing with Revenue and, if necessary, make a voluntary disclosure. What VAT can I recover? At a high level, VAT can only be recovered by a business providing VATable products or services. This means that the business charges VAT on sales to customers. You may think that a business providing only products or services subject to VAT can recover all VAT charged by its suppliers. However, that is not the case. It is never possible to recover VAT on the purchase of food and drink items for use in an office kitchen. I frequently encounter cases where VAT is being reclaimed on bottled water purchased by the business, for example. Similarly, if a business owner purchases items for personal use, VAT should not be recovered as that purchase has not been made to provide taxable (i.e. VATable) supplies. Furthermore, if a company carries on a trade and owns several rental properties, you must determine if the expense relates to the trade or the rental properties. For example, if repairs are carried out on the business premises and all supplies by the business are liable to VAT, the VAT charged can be recovered. However, if repairs are carried out on a rented residential apartment owned by the business, the VAT cannot be recovered as the rental income from the residential apartment is not liable to VAT. In summary, consideration must be given to each invoice to determine if the business can recover the VAT charged. In addition, businesses can recover 20% of the VAT incurred on the acquisition or leasing of a car, provided it is used for business purposes at least 60% of the time. Businesses must also be aware that, in most cases, the supplier will not have charged VAT when the business purchases goods or services from outside Ireland. The business must self-account for Irish VAT at the appropriate rate and claim an input credit if it is entitled to do so. If foreign VAT has been charged, the business should satisfy itself that this is correct before payment is made to the supplier. A business cannot include an input credit in an Irish VAT return for foreign VAT charged. A business can only include a claim for a VAT input credit where a valid VAT invoice has been received. Accounts payable staff should be trained to ensure that all invoices are valid VAT invoices before settling them. It is easier to seek a proper invoice from a supplier when the invoice has not yet been paid. * Check that you are correctly claiming VAT input credit on cars and foreign purchases. How long do I need to keep documentation for? In general, documents must be kept for six years after the tax year in question. However, that is not as straightforward as it may sound. For example, I know of one situation where an individual claimed capital allowances on a building, with the capital allowances available over seven years. The tax return covering the sixth year in which the allowances were available was selected for verification three years after the return was filed, and Revenue sought copies of documentation to confirm the nature and the availability of the allowances. In this case, the taxpayer needed to provide documentation from nine years earlier. The key point from a tax perspective is that the burden of proof rests with the taxpayer. Therefore, you need to ensure that you can prove your entitlement to a deduction for any expenses or any capital allowance claimed in your tax return. Many recent tax appeals decisions have referred to this point. An Appeals Commissioner cannot decide a case in favour of a taxpayer where the taxpayer cannot discharge the burden of proof. Regarding an asset that is a capital asset, it will be necessary to keep documentation for six years after the property is disposed of. If a property was bought in 2000 and sold in 2021, for example, documentation regarding the purchase of that asset must be retained until 2027. Doing so enables you to prove your entitlement to a deduction for the costs of acquisition incurred in 2000 in determining the capital gains tax payable (or indeed the capital loss) on the disposal of the asset. The retention of documentation is also important in the context of VAT and the Capital Goods Scheme. When an asset is disposed of, the vendor is often obliged to complete Pre-Contract VAT Enquiries (PCVE) as part of the sales process. The PCVE contain full details of the purchase/development of the property, how it has been used since it was acquired, and how it is currently being used. To determine the correct VAT treatment of the sale, there can be no gaps in terms of how the property has been used. It is easier to maintain this information on a contemporaneous basis rather than pulling together information on all prior years as you prepare to sell the property. * Review your document retention policy as in some cases, you may need to keep certain records for more than six years. How do I ensure compliance with BIK rules on the provision of company cars? Employers who provide employees with company cars are obliged to keep contemporaneous records of business mileage. BIK operates by applying a percentage rate to the original market value of the car provided to the employee (other than electric cars, where different rules apply). The applicable percentage depends on the annual business mileage driven by the employee and ranges from 30% down to 6%. If any rate other than 30% is used, the employer must be able to prove the business mileage. Where an employee is provided with a car, they must complete a monthly log of the business journeys for their employers. While the tax is payable by the employee, the obligation is on the employer to operate the tax correctly. In addition, if the vehicle provided is a commercial vehicle or a van, the appropriate BIK rate is 5% regardless of the business mileage. * Review how you are calculating PAYE on the BIK on company cars and keep appropriate contemporaneous records of staff business mileage. What information does my tax advisor need to prepare my tax return? Where your accountant prepares your business’s financial statements, they will generally have sufficient information to prepare an accurate tax return. Where the financial statements are prepared by the business and provided to the tax advisor, however, they will generally need answers to the following questions: Are all expenses incurred wholly and exclusively for the purpose of the trade? For example, consider business entertainment, charitable and political donations, personal expenditure, and expenses paid for by the business that may not relate to that business. Was the employer’s pension contribution paid during the year, or is there an accrual in the profit and loss account? A tax deduction is only available on a paid basis. Can you provide an analysis of professional and legal fees? Fees that relate to capital transactions (e.g. asset purchases/sales) are not deductible in calculating trading profits. Can you provide a schedule of fixed asset additions to include the date of acquisition, the cost of acquisition, and the nature of the asset? Also, can you provide a schedule of fixed asset disposals so that accurate capital allowances claims and balancing charges/allowances can be prepared? Can you provide a reconciliation of any finance lease creditors from the opening position to the closing position? Can you provide a schedule of directors’ remuneration split by director? Can you provide details of any dividends or distributions paid during the year? Can you provide details of any non-trading income? Where medical insurance is paid on behalf of the staff, can you provide details of the tax relief at source (TRS) amount and confirm whether the gross or net amount has been included in the profit and loss account? * Save time and fees by completing the checklist your tax advisor will need to prepare your tax return. These issues occur in a wide range of businesses. You should aim to ensure that your business is compliant with tax legislation on an ongoing basis. Careful consideration should be given to amending any errors you discover – before you get that knock on the door. Jane O’Hanlon is a Director at Purcell McQuillan and a Fellow of Chartered Accountants Ireland.

RSM Managing Partner, John Glennon FCA, explains how client and talent experience both support and drive the firm’s international growth. RSM Ireland’s people-driven approach has delivered impressive results in the form of 70% growth since 2016, the year the firm joined the RSM network and became united under one single global brand with RSM member firms across the world. “We had always been a member of international groups, but joining RSM was the best strategic decision we ever made,” says Glennon. Being part of the global RSM network has brought a lot of referrals from US and UK companies, he adds. “Today, 47% of our clients are globally active companies and our goal is to be advisers of choice to middle market leaders in Ireland. We don’t have a business-to-business strategy; it’s person-to-person.” That people focus dates back several years. “We always had a consulting business,” says Glennon. “In the aftermath of the financial crash, we had a lot of clients coming to us looking for advice. Accountants will look at a business in a certain way and say the turnover or profits are down, and prescribe a financial remedy. But we realised that it’s people that drive businesses. Our consulting offering is based on that ethos.”That approach has seen the firm establish a substantial presence within the public sector over the last ten years. “The public sector now represents 50% of our consulting work,” he notes. “We also work closely with FDI companies based in Ireland, helping them as they navigate their journey and grow. Their needs change at various stages of their journey, and we are there to support them.” A people-centric approach RSM has also built a strong reputation for its training culture and approach to people development. “It’s all about helping people develop themselves and become more valuable to the client,” says Glennon. “We have also focused on rethinking the role of the partner in a professional services firm. It’s 50% about client service excellence and 50% about delivering talent experience. It’s about coaching people to realise their potential and accelerate their development. Being a valued team member has to be authentically experienced. The firm seeks to provide the right environment, but we ask our people to own their own future.” That people-centric approach has led to an important decision concerning future working arrangements. “We are committed to hybrid working in the long-term. It has worked really well for us over the past 15 months, and 96% of our people want to continue with some form of hybrid arrangement, either two or three days a week in the office. That requires commitment and mutual trust.” Glennon firmly believes that the COVID-19 crisis has brought about a once-in-a-generation reconfiguration of how professional work will be performed. “We don’t believe our culture lies within the physical walls of our workplace and that it’s only present when we are physically present together in the office. Our values permeate our behaviours no matter where we are located. We will work hard to make it a success for our people, but we will have to help them reconcile demands from clients, colleagues and their private lives to make it work.” Such balance is important to Glennon. “We are committed to balance in our people’s working lives. That doesn’t mean you don’t have to work long hours occasionally, but you don’t want to institutionalise it. Another strategy that has delivered for us is our lean approach to our daily activities. We are trying to streamline our operations all the time.” That strategy has brought about some fundamental changes to the business. “We used to have eight business units; we now have three – audit, tax and consulting.” The switch to remote working has brought its challenges, of course. “In a remote environment, we have found that you must work harder to develop ways to communicate to your teams regularly,” Glennon notes. “Last October, we instituted one-to-one communications with staff that are not about work, but supporting the person. The feedback from staff has been amazing.” Competing through collaboration There is also a very strong focus on the overall culture of the firm. “RSM has a set of values, and we spent a lot of time translating those into a set of behaviours. Senior people are traditionally rewarded based on metrics. We have shifted this to a behaviour-based model, and the variable element of pay is related to living the firm’s values. There is a strong business basis for this. We want to have a strong collaborative culture because that’s how we compete in the marketplace. The days of command and control management are long gone.” And the proof of that is in the numbers. “Our audit practice is going to grow by 30% this year, our strongest year ever. The business has always grown moderately, but it’s a very exciting time to be a young auditor with RSM. Our globally owned client base has grown dramatically. We have just appointed a new audit partner and are in the market for another to cater for continued growth.” Supporting the FDI community The tax business is also experiencing significant growth, particularly with the firm’s globally active clients. “We are designing bespoke tax solutions for these firms’ Irish operations,” says Glennon. “Companies are going to have to rethink some of their strategies due to the impending global tax changes. I don’t think Ireland will suffer any material loss of FDI companies based here solely for tax reasons. Companies have had a very positive experience in Ireland, but making the country a good place for talent to come and live and work is just as important as tax when it comes to attracting and retaining FDI.” Also growing strongly is the firm’s outsourced technology offering to FDI clients. “We offer the Global Compliance and Reporting Service (GCRS), which can manage all aspects of multi-jurisdiction compliance for global clients,” says Glennon. “Our consulting business has experienced exponential growth in recent years. We work with clients on transformation programmes and help them with people issues and organisational design. We also offer a forensic and investigation service to assist with workplace conflict and dispute resolution. Our multi-disciplinary consulting team includes accountants, barristers, solicitors, employment relations experts and technology specialists. An emerging service line for us is economic consulting.” “While the last year has posed significant challenges, we have overcome them and I truly believe that there has never been a more exciting time in our business,” Glennon concludes. (This article is sponsored by RSM.)

In an age of information overload, what websites and internet resources can someone who wants to keep up-to-date with the world of finance and financial management rely on? Here’s Cormac Lucey’s selection. For daily business news… The RTÉ website offers us the opportunity to read the daily survey of business and financial news published by the main Dublin stockbrokers. This is not just a useful survey of the previous day’s financial economic news, it also offers readers the opportunity to understand how financially literate readers view that news.   Visit www.rte.ie/news/markets/broker_reports (and check out Goodbody Stockbrokers). For detailed financial data on leading Irish corporates… I opened up an account with Davy Stockbrokers largely to get access to the company’s Weekly Book. That is a compendium of corporate data for quoted companies covering recent financial history, near-term financial forecasts and key valuation metrics. For avid financial number crunchers such as myself, it’s the equivalent of crack cocaine! Visit www.davy.ie  For an up-to-date overview of the Irish economy… The National Treasury Management Agency (NTMA) borrows money on behalf of the State. That requires regularly updating international debt investors (who may buy Irish government debt) on economic developments here. Visit www.ntma.ie (and look for ‘Investor Presentation’).  For an overview of the Northern Ireland economy… EY’s Chief Economist, Neil Gibson, provides a regular and authoritative update on what is going on up North.  Visit www.ey.com (and search for ‘EY Economic Eye: Northern Ireland’). For a global economic overview from a monetary perspective… Simon Ward, Janus Henderson’s economic adviser, uses monetary and cycle analysis to assess economic and market prospects. Visit www.moneymovesmarkets.com For general trends in financial management… Two large international consultancies offer regular publications that combine a focus on the practical problems facing financial staff in corporations with intellectual rigour.  Visit www.mckinsey.com (and search for McKinsey on Finance, which offers readers a quarterly selection of useful and stimulating articles). Visit www.bcg.com/capabilities/corporate-finance-strategy/insights, which offers regular corporate finance updates. For current developments in international markets… The Financial Times has an excellent capital markets blog (www.ft.com/alphaville), and there is an offshoot of that (www.ftalphaville.ft.com/longroom/home) on which you can (once registered) access interesting research reports from the world’s top investment banks. Another website where you can access high-level research reports from investment banks is www.savvyinvestor.net (registration required). For the technical situation of main financial markets… Steve Blumenthal, executive chair of Capital Management Group, produces a useful technical survey of the main US markets each week.  Visit www.cmgwealth.com/ri-category/on-my-radar  For financial chatter, conspiracy theories and the occasional blinding insight... It’s all available here: www.zerohedge.com  Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland.

As businesses across the island of Ireland grapple with the post-Brexit trading environment, any and all opportunities for growth should be grasped with both hands, writes Dawn McLaughlin. The new trading arrangements brought about by Brexit and the Northern Ireland Protocol have caused much economic and political upheaval and controversy since the turn of the year. We are all well versed by now in the arguments for and against the Protocol. However, it remains the case that businesses, in the main, are largely supportive of the new arrangements in the absence of any better solutions. While no one would claim that it is a perfect situation, for businesses in Northern Ireland – particularly those in the north-west border region – there are advantages. Being able to trade freely with the rest of the UK and into the EU and the rest of the island of Ireland is a distinct competitive advantage afforded to businesses on one side of the Derry-Donegal border that isn’t available to the other. Another positive consequence has seen north-south trade in Ireland boom since the start of 2021. It has increased by over 60%, according to the Central Statistics Office’s most recent figures. Some local businesses have begun trading with their southern neighbours for the first time, shifting supply chains and finding new markets and customers. However, many of these businesses will not have realised that they are technically exporting their goods or services, often considered to be the preserve of shipping products across the world. The Londonderry Chamber of Commerce, in collaboration with our partners at Invest Northern Ireland, Derry City and Strabane District Council, InterTradeIreland, and Enterprise North West, have established Growth North West. This partnership is developing new initiatives to help businesses grow their operations across several business areas, such as exporting and innovation. Focusing on the export journey first, experts will cover different aspects of the exporting process to show attendees how to make the most of the export opportunities available to them. Then, businesses can schedule a one-on-one appointment for a more bespoke review of their exporting needs and challenges. This covers everything from export documentation, logistics and sales prospecting to maximising social media and perfecting your pitch. Growth North West is a one-stop-shop for everything your business needs to begin expanding into new markets and trading with new customers. As well as a series of monthly webinars, a mapping exercise has been carried out detailing all available export support. As a sole practitioner, I know that keeping up-to-date with ever-changing programmes and supports is hugely time-consuming. So, to help Chartered Accountants add value and guide clients on their export journey, Growth North West will hold awareness sessions in the coming months. These sessions will be publicised through the Chamber and are open to all. We look forward to engaging with businesses of all kinds, shapes and sizes as they begin or expand their export operations. There are significant opportunities for our local firms, both beyond these shores and on our shared island. As we all grapple with the post-Brexit trading environment, any and all opportunities for growth should be grasped with both hands. Growth North West aims to deliver stimulation and growth opportunities for our region at a time of economic uncertainty and upheaval. Throughout the pandemic, firms have been innovating their services and pivoting their operations to stay afloat. Looking outwards at new export markets is one way our local businesses can positively react to both the effects of the pandemic and the UK leaving the EU. Dawn McLaughlin is Founder of Dawn McLaughlin & Co. Chartered Accountants and President of Londonderry Chamber of Commerce.

DLA Piper’s Éanna Mellett and Matthew Cole explain what a management team should know when contemplating a private equity-backed management buy-out. Private equity (PE) has dramatically altered the management buy-out (MBO) market. The days of the traditional debt-backed MBO are long gone. If MBOs happen these days, they are almost exclusively backed by PE. So, if you are part of a management team contemplating a PE-backed MBO, what should you know and what should you be worried about? Everyone wants to know: “what is market?” This can be in the context of M&A terms, equity terms (or indeed, just about anything else), if only to establish a baseline against which to gauge your own performance. What a management team needs, though, is a view of “market” that is based on more than what a lawyer can remember from their last few deals or a general hunch. DLA Piper has the most comprehensive global database of M&A and MBO deals. And as the only law firm with a specialist management advisory practice operating in Ireland, it is uniquely positioned to provide benchmarking data and intelligence to answer those all-important “what is market” questions. DLA Piper produces a Global Private Equity Terms Report, which collates and analyses management terms, data and trends from hundreds of global PE deals. It delivers a reliable and comprehensive view of “market” from one of Europe’s largest PE law firms. The report captures the knowledge DLA Piper has gained from consistently acting on more buy-outs in Europe than any other law firm and being Europe’s leading management advisory practice. What size of equity pot should be available to management? Standard pot size is one of the most frequently asked questions and one of the most obvious comparable data points. However, in practice, its real value depends on a variety of other factors, which include: The coupon of the loan note/preference shares that it sits behind; Whether it is genuinely ring-fenced for the management team; Whether there is a ratchet; Whether there is non-dilutive bolt-on financing; and The management team’s appetite for risk. Predictably, the pot size decreases as the deal’s enterprise value increases, as shown in Figure 1. What is more surprising is the difference in treatment around the ring-fencing of the pot (meaning that the sweet equity is only used for incentivising management and is fully issued). Without ring-fencing, the headline pot size may be little more than a theoretical possibility. The larger the deal size, the more likely the pot will be truly ring-fenced. 16% of small-cap deals (deals with a value of up to €50 million) have ring-fencing while the percentage increases to 45% of mid-cap (€50-250 million) and large-cap deals (€250 million-plus). Even more striking is the correlation between ring-fencing and the involvement of specialist advisors with management teams. For example, in deals with specialist financial advisors or when DLA Piper is acting for management teams, ring-fencing appears in 60% of deals. Ratchets Ratchets are a subject that divides. Some PE houses simply will not entertain them as a matter of policy. Others see the downsides of additional complications and potential misalignment of interest as a price worth paying to bridge the gap of equity expectations. Only a minority of deals have ratchets, although their use has become more common over the last three years. They appear more frequently in technology deals and are less likely in the sub-€250 million market, where 25% of deals have ratchets compared to 44% of €250 million-plus deals. Where ratchets are used, the majority have a money multiple and an internal rate of return (IRR) threshold. Rollover Rollover is usually a headline issue and often a contentious one. There is a difference in approach between PE houses and advisors based on geographic location, which hints at divergent local market norms. Most practitioners will say “market” is about 50%, but this masks a more complicated picture. For instance, the size of the deal matters. The smaller the deal size, the lower the proportion of proceeds managers are required to roll over. Leavers: the good, the bad and the rest You will hear about good leavers, intermediate leavers, bad leavers, no-fault leavers, very bad leavers and early leavers. The list goes on, and the same phrase can mean different things to different people. So here, we have simplified it because the questions are, at one level, quite simple: What does a manager have to sell?  At what price? The answer to the second question depends largely on the circumstances of a manager’s departure, the most common being: Death or permanent disability; Dismissal; Resignation; or Summary dismissal for cause. There is significant divergence that splits on geography and deal size for the most common type of leaver – a manager who is asked to leave because their role is obsolete or the PE house no longer thinks that the person in question is performing. In a classic London-led £250 million-plus deal, sweet equity will value vest with debate taking place over whether it vests annually, quarterly or monthly. Elsewhere, with US-based PE houses and on smaller deals, there is more debate around whether there is any value vesting at all. Attacking “the strip” Where managers roll over into the institutional strip on a non-primary deal, the most common position used to be that the strip was “earned money” and therefore sacrosanct – although this was less common outside the London market. That position has become more blurred, with an attack of some sort possible if the manager competes or has been dismissed on grounds justifying summary dismissal. About DLA Piper Ireland If you are undertaking a PE deal, you need to be advised by people who know the answer to “what is market?” and have experience of the differing approaches taken by the various PE houses.  DLA Piper acted on more European PE buy-outs and exits than any other law firm in 2020 and is the only law firm operating in Ireland with a specialist management advisory practice. Personalised copies of DLA Piper’s M&A Intelligence and Equity Terms Reports are available from the authors or the DLA Piper website, www.dlapiper.com/IECorporate. DLA Piper has been named by Mergermarket as the world’s number one law firm for M&A (by volume) for each of the last 11 years. Éanna Mellett is Partner and Head of Corporate at DLA Piper in Dublin. Éanna can be contacted at eanna.mellett@dlapiper.com. Matthew Cole is Corporate Partner at DLA Piper in Dublin. Matthew can be contacted at matthew.cole@dlapiper.com.