Irish Tax News

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News feed from Chartered Accountants Ireland

Last feed update: Wednesday January 23rd, 2019 11:35:38 PM

CCAB-I calls for consideration of compliant taxpayers on implementation of ATAD hybrid and interest rules

Monday January 21st, 2019 11:22:14 AM
Chartered Accountants Ireland under the auspices of the CCAB-I provided a high level response to the Department of Finance’s consultation on anti-hybrid and interest restriction rules stemming from the Anti-Tax Avoidance Directive (ATAD).  The submission calls for consideration for the tax burden that further rules will place on already compliant taxpayers.  The key points of the submissions are: Ireland should not accelerate the introduction of any measures beyond the dates for implementation set out in the ATAD. The anti-hybrid rules have the potential to be very complicated, particularly around the areas of defining hybrid entities and assessing whether a payment can be viewed as having been subject to tax. It is very important that the application of these rules is not administratively burdensome. The implementation of the ATAD interest restriction rules should be delayed to allow time for taxpayers to prepare and align Ireland’s existing complex interest rules with ATAD rules. Clear and timely transfer pricing guidance should be available to taxpayers for the purposes of managing and documenting transfer pricing policies that are likely to be relevant on the introduction of anti-hybrid and interest limitation rules into Irish tax law.

Commission’s proposal to change tax voting system puts small countries at a disadvantage says CCAB-I

Monday January 21st, 2019 11:21:12 AM
Chartered Accountants Ireland under the auspices of the CCAB-I provided feedback to a road map communication issued by the European Commission in December on a proposal to change the unanimous system of voting on tax policy to a qualified majority system.  The Commission’s plans to push for a change in the voting system for tax policy were formally published last week. The Communication suggests a targeted transition to qualified majority voting (QMV) under the ordinary legislative procedure for the purposes of progressing the Commission’s desire to introduce the Common Consolidated Corporate Tax Base (CCCTB) and a new system for the taxation of the digital economy.  The CCAB-I’s submission, which was also issued as a press release covered in the national media, says that the QMV system would benefit large Member States but would put small Member States like Ireland at a distinct disadvantage. The CCAB-I notes that the Commission’s attempts to introduce the QMV system on tax matters will create distrust among small states like Ireland, given the fact that national tax sovereignty is inextricably linked to the unanimous system of voting and this has been publically debated in Ireland during EU Treaty referendums.

OECD says corporate tax revenue is stable despite falling rates worldwide

Monday January 21st, 2019 11:20:12 AM
Taxes paid by companies remain a key source of government revenues, especially in developing countries, despite the worldwide trend of falling corporate tax rates over the past two decades.  That’s according to a new report from the OECD.   The report shows that corporate income tax remains a significant source of tax revenues for governments across the globe. In 2016, corporate tax revenues accounted for 13.3 percent of total tax revenues on average across the 88 jurisdictions for which data is available. This figure has increased from 12 percent in 2000.   The OECD analysis shows that a clear trend of falling statutory corporate tax rates over the last two decades with the average tax rate falling from 28.6 percent in 2000 to 21.4 percent in 2018.   The findings in this report are interesting in light of the intense focus on corporates internationally over the last ten years over concerns on the use of tax avoidance tools to minimize tax and falling corporate tax rates. 

The Faroe Islands and Greenland join the Inclusive Framework on BEPS

Monday January 21st, 2019 11:19:09 AM
The Faroe Islands and Greenland became the latest jurisdictions to join the Inclusive Framework on BEPS which now numbers 127 jurisdictions. 

In the media - 21 January 2019

Monday January 21st, 2019 11:18:18 AM
In his regular column in the Sunday Business Post, Brian Keegan, Director of Public Policy & Taxation talks about the EU’s proposal that tax decisions be taken by qualified majority voting rather than by unanimous agreement.  The CCAB-I released a statement regarding the European Commission’s proposal to change the system of voting on tax policy at EU level and this was reported in the Irish Times. 

Witches, wardrobes….but no lions

Monday January 21st, 2019 11:17:45 AM
From witches to family holidays, widescreen TVs to wooly underwear, in the run up to the big 31 January deadline HMRC have set out the many weird and wonderful self-assessment (“SA”) excuses and expenses claimed by taxpayers. It’s now just 10 days until the 2017/18 SA filing deadline on 31 January 2019.  31 January 2019 is also the due date for payment of the balancing payment of tax and NIC for 2017/18 and the first payment on account for 2018/19. 2016/17 SA returns must also be amended by this date. Readers are reminded that there are a number of online filing exclusions for 2017/18 which means paper returns will need to be filed by 31 January 2019. The most recent version of the filing exclusions for 2017/18 has been published. The SA edition of Agent Update is also available now. Whilst this special edition does not contain any new information it does provide links to support available including: HMRC talking points webinars for agents on SA related topics SA related toolkits HMRC YouTube videos Paying SA liabilities Support available from agent account managers and through the HMRC online agent forum HMRC has amended its guidance on SA returns to clarify that company directors with income taxed at source under PAYE and with no other tax obligations do not need to complete a tax return. This change was highlighted in HMRC’s Agent Update 69 issued on 12 December 2018.

Stamp Duty guidance

Monday January 21st, 2019 11:17:42 AM
Revenue published new stamp duty guidance covering administrative procedures and enforcement.  It contains information about the eStamping system and related enforcement procedures.

Brexit Bulletin, 21 January 2019

Monday January 21st, 2019 11:17:29 AM
After surviving a no-confidence vote last week, the UK Prime Minister Theresa May is back in Parliament today to present an alternative deal to which she hopes is more palatable to MPs. The Brexit Plan B is rumoured to be not too dissimilar to Brexit Plan A.  Confidence without supply The Prime Minister held a first round of cross-party talks last week in an effort to find a compromise but there are reports this morning that she is hoping that the EU will re-write the backstop- something that many Member States including Ireland have said as unlikely. However there are reports that the EU may be considering extending the Brexit process.  Watch this space. Mrs May is expected to make a statement in the House of Commons later today on her plan B which will then be voted on by the UK Parliament on 29 January 2019. Bills, bills and more bills – The Irish government last week announced plans to publish its Brexit omnibus bill on 29 February which covers 17 areas that will need legislation in the event of a no-deal Brexit. Border checks – During Leader’s questions, Taoiseach Leo Varadkar said that Ireland is implementing no deal plans and that means possible checks at ports and airports in Dublin and Rosslare. The Taoiseach said that checks are not being planned along the land border on the island of Ireland or at sea.    Revenue regional Brexit seminars Revenue will host the following seminars in January to help address the potential customs implications of Brexit and how these challenges can be addressed.  Book by clicking the links below. Carnbeg Hotel, Dundalk, Tuesday 22 January 2019 Hibernia Suite, Dublin Castle, Thursday, 24 January 2019 Clayton Whites Hotel, Wexford, Wednesday, 30 January 2019. If you have a specific topic you wish covered, you can email brexitqueries@revenue.ie outlining the details.  More seminars will be added subject to demand and the Brexit dedicated page on the Revenue website will be updated with further information as it becomes available. HMRC telling traders to get an EORI number HMRC are reminding traders about actions they can take to prepare in the event of a no deal Brexit.  One recommendation is to apply for an EORI number to be able to continue to trade with the EU and HMRC say it only takes ten minutes. You can read the update using this link. 

Don’t be caught out by planned downtime, 21 Jan 2019

Monday January 21st, 2019 11:17:08 AM
Will you be using HMRC online services in the coming weeks leading up to the 2017/18 self-assessment deadline? Don’t be caught out by the planned downtime to some services. HMRC are warning about the non-availability of specific services on the HMRC website, a range of services are impacted. Check the relevant page for information on planned downtime.

PAYE reporting for payments made early - Christmas 2018

Monday January 21st, 2019 11:16:33 AM
HMRC has been writing as set out below to employers to inform them of a new PAYE RTI reporting easement which only applied to Christmas 2018. “Guidance for employers on RTI reporting obligations for payments made early over the festive period We know that some employers pay their employees earlier than usual during the festive period this may be due to the business closing for Christmas and New Year. If you do pay early, please report your normal payment date on your Full Payment Submission (FPS). For example: if you pay on 21 December but your normal payment date is 31 December, please report the payment date as 31 December. In this example the FPS would need to be sent on or before the 31 December. Doing this will protect your employees' eligibility for Universal Credit, because an early payment could affect further entitlements. This guidance applies only for the 2018 festive period.”

Stock Relief Provisions

Monday January 21st, 2019 11:16:14 AM
Revenue’s guidance on Stock Relief has been updated for Finance Act 2018 amendments which extended Stock relief to 31 December 2021 and included a ceiling of €70,000 that can be granted to young trained farmers as a result of EU state aid requirements. Read Revenue’s eBrief and updated guidance.

Talking Points latest schedule, 21 January

Monday January 21st, 2019 11:15:57 AM
Take a look at forthcoming online HMRC events many of which feature topics relevant to the forthcoming self-assessment deadline.  HMRC ask that you register at least five minutes before a digital meeting is due to start.   If you have any questions for HMRC’s subject experts more than 24 hours prior to the meeting, please send them to team.agentengagement@hmrc.gsi.gov.uk, including the title of the meeting in the ‘Subject’ line of your email. Any questions that arise after this time should be submitted during the live meeting. These interactive meetings run on the ‘GoToWebinar’ platform. The organiser will run through how to ask questions on the day. Income from property for individual landlords: Wednesday 23 January – 11am to 12.15pm Wednesday 23 January – 2pm to 3.15pm Submission of SA returns affected by exclusions: Thursday 17 January – 11am to midday Making Tax Digital (MTD) for business. Tuesday 22 January ­­– 11am to midday Tuesday 22 January – 1pm to 2pm Tuesday 22 January – 3pm to 4pm Basis Periods – looking at commencement years, changes to accounting date and overlapping periods: Thursday 24 January – 11am to midday Wednesday 30 January – 11am to midday Trade losses: Thursday 24 January – 1pm to 2pm Wednesday 30 January – 1pm to 2pm Negligible Value Claims and Share Loss Relief Thursday 7 February ­– 11am to midday An Intermediate Guide to the Enterprise Investment Scheme: Friday 8 February – midday to 1pm Stamp Duty Land Tax – Higher Rate for Additional Dwellings and Dwellings Purchased by Companies – Relationships and Status: Wednesday 13 February – midday to 1pm

PAYE ‘Week 53’ guidance

Monday January 21st, 2019 11:15:47 AM
Revenue has published guidance covering the procedure for employers who pay employees on a weekly or fortnightly basis and who may have an extra payday in a tax year if the pay date falls on 31 December (or 30 December in a leap year).  This procedure, known as a Week 53 basis, can result in an underpayment of tax at year end as tax bands and credits are granted on a 52 week basis.  Finance Act 2018 introduced provisions to ensure that affected employees will not have an underpayment of tax by effectively allocating tax bands and credits on a Week 1 basis. Regulation 15 of the Income Tax (Employments) Regulations 2018 sets out the procedure to be adopted by an employer on the payment of emoluments to an employee in a Week 53 scenario.  Basically, Regulation 15 provides that the employer should use the latest Revenue Payroll Notification (RPN) to deduct income tax on a Week 1 basis. Where ‘Week 53’ payments occur: for income tax deductions – the employer should follow the instruction found in Chapter 8.8 of The Employers Guide to PAYE. for USC deductions – the employer should follow the instruction found in Section 4 of the USC guidance.  

This week’s UK tax tidbits, 21 January 2019

Monday January 21st, 2019 11:15:10 AM
Guidance on the National Minimum Wage and the latest phishing scams feature this week. “Find out how to recognise when contact from HMRC is genuine, and how to recognise phishing or bogus emails and text messages” has been updated The Diverted Profits Tax guidance has been updated Compliance checks: alternative dispute resolution - CC/FS21 has been updated Creative Industry Tax Reliefs sets out contact dctails for the relevant HMRC team dealing with this suite of reliefs The list of approved payers for foreign entertainers has been updated National Minimum Wage information for employers has been updated. HMRC have also added two new short webinars to our series on National Minimum Wage for employers which cover unpaid working time and how to deal with accommodation costs From 6 April 2019 employers will no longer be required by HMRC to check details of employee expenditure receipts when paying or reimbursing expenses at or below the published benchmark scale rates or overseas scale rates (OSR) for allowable travel expenses HMRC have now published draft guidance in two places (here and here) on the new rules which from April 2019, extend the scope of the non-resident capital gains tax regime to include all UK immoveable property, including commercial property and other UK land. The change affects all non-UK resident property investors (whether individuals, companies or other entities), with only limited proposed exemptions

Keep the Gatekeeper

Monday January 21st, 2019 10:31:57 AM
Sunday Business Post, 20 January 2019 I'm studiously trying to avoid any comment on the Brexit shenanigans this week on the other side of the Irish Sea.  It is not easy.  From travelling back and forth on a regular basis over the last two years, I've been struck by how difficult it is for many Brexiteers to articulate their reasons for wanting to leave using any kind of concrete examples.  They may claim they wish to take back control, but when it comes to the specifics of the controls they want back, often they are at a loss. Feeding that unspecified unease are the many ill-conceived initiatives European Institutions regularly dole out.  Some of these offer ample excuse to even the most committed Europeans to want out.   Whether it was with a keen sense of irony, or mere tone deafness to the political situation in Britain, the European Union gave us a new reason to dislike it this week on the same day as the substantive Brexit vote. When EU law is formulated, consent from all of the EU countries is required.   About 80% of all EU legislation is adopted through a procedure known as qualified majority voting or QMV.  As with everything EU based, there are some small wrinkles and exceptions under QMV, but in general 55% of the member countries have to agree, and the countries in agreement must represent at least 65% of the EU population.  For the other 20% of new rules, unanimity is normally required.  For instance all of the EU member countries must agree on the accession of a new country to EU membership.  Taxation across the European Union also fits in to the unanimity category, but unanimity is hard to come by.  Tax is a sovereign competence, closely guarded by national governments who quite rightly prioritise the needs of their own exchequers.  But the Commission is now proposing that taxation decisions be taken by QMV rather than by unanimous agreement. It seems to me that the Commission has been its own worst enemy in how it has justified this proposal.  They claim that citizens demand action in the fight against tax avoidance and tax evasion.  This ignores the very significant tax enforcement changes across the EU in recent years.  A large volume of cross-border information is now flowing between the revenue authorities in EU countries since the implementation of an EU directive on administrative cooperation which has been in effect since 2014.  Try opening a foreign bank account or buying a property in the EU without notifying Revenue, and see how you get on.  Another justification offered is that qualified majority voting on tax would in some way make for more democratic decision-making.  That’s not right either.  Every Finance Minister, Treasury Secretary or Chancellor of the Exchequer in every EU member country has to push their own tax legislation through their own national parliaments.  This is about as democratic as it gets. Nor is the Commission’s claim that QMV could lead to a stronger single market fully credible.  The single market is all about the capacity to compete, and the US experience bears this out.  No one would deny that the US is a colossally powerful single market, but there is no impediment to the states of that great country competing with each other to try and attract investment and jobs.  In fact, individual US state governments have a latitude for so doing that many a European finance minister could only dream of. One of the Commission’s pleas should ring alarm bells by virtue of its title alone.  Whenever you see “fairer taxation” offered as a justification, you can take it to mean that somebody else ends up paying.  The international tax debate has ceased to be about how much tax is paid, but is rather about where tax is paid.  Displaced taxation doesn't make for fair taxation.  Wrapping up the series of justifications is the expressed desire for the EU to become a “global leader”, whatever that means. A lack of self-confidence permeates the whole policy.  Moving the basis of EU tax policy agreement from unanimity to QMV suggests lack of confidence in the governments of the EU member countries to do the right thing when it comes to taxation.  The proposal also signals a lack of confidence in what has already been achieved.  There has in actual fact been significant progress made at EU level on taxation matters affecting all EU member countries.  EU directives on administrative cooperation, which mandates the tax information sharing I've already mentioned, are now supplemented by the Anti-Tax Avoidance Directive.  This newer directive is already taking hold and is extinguishing the opportunities for multinational companies to arbitrage tax regimes across Europe.  These directives got through the European system without any particular hindrance from the decision-makers in the various countries.  QMV was not required, as unanimity could be secured. The timing of the Commission’s QMV proposal is also suspicious.  While the current Commission only has months to run, late stage policies or thinking may be adopted and retained by the new Commission due to be formed towards the end of the year.  The great virtue of the current unanimity requirement is that it serves as a policy gatekeeper.  Only the most coherent strategies need apply.  Tax policies must fundamentally make sense, economically as well as politically.  Introducing QMV on tax matters invites the possibility of incoherent or deferred policy-making by the EU institutions.  And if you think that incoherent or deferred decision-making on key issues is ever a good idea, again look across the Irish Sea. Dr Brian Keegan is Director of Public Policy and Taxation at Chartered Accountants Ireland

Job Market update – A Great start to 2019 for members with 2 – 5 years PQE

Monday January 21st, 2019 09:47:10 AM
Straight out of the blocks in January 2019 we are already seeing a significant increase in the number of mid-level managerial roles becoming available for ACA’s with circa 2 to 5 years PQE.  This is a great start to the year and particularly good news for members looking to make their 2nd or 3rd career move in industry as well as those who are looking to build on the experience and skills that they have developed in their career to date. Looking at this from the perspective of our Career Pathway framework it would see you evolving from Skill level 1 (young Professional) to Skill Level 2.( https://www.charteredaccountants.ie/Career-Pathway) The roles we are working on currently include Finance Manager, Senior Financial Accountant, Senior Financial Analyst, Finance Business Partner, Internal Audit Manager, Tax Manager and the like. They span a number of industry sectors which is indicative of the range of opportunities available at present. The salary levels are typically in the region of 65k to 80k€. A move at this stage of your career is an important and potentially a significant one and needs to be well considered and strategic to ensure your career stays on track. If you are interested in hearing more about the market for Chartered Accountants and these roles  or indeed to discuss a career move please contact the Careers team (Karin, Dave and Ciara) via email to careers@charteredaccountants.ie or give us a call on 01 637 7251 or 637 7331.

Two steps to protecting your organisation against repeated fraud

Monday January 21st, 2019 12:00:00 AM
After most investigations, organisations (including internal audit and specialist investigation units) frequently move to the next piece of work, ultimately not identifying, remediating or monitoring the underlying root cause of the issue being investigated. Following any investigation, organisations should seek to incorporate a practice within the investigation process that includes a post-investigation controls review, which provides considered expert and professional opinion in recommending control improvements. In many cases, organisations will generally find through basic analysis that repeat offences of the same issues are occurring, including control failures that had led to the internal malpractice occurring. In order to successfully implement such an approach, there are two critical steps organisations need to consider. Step 1 – prepping your investigation team The skill set of the investigation team members in situ should be assessed to ensure that there are adequately skilled and trained for investigation purposes but also to ensure that they are equipped to capture operational experiences from an audit and/or compliance perspective.  This approach will make certain that the post-investigation review and subsequent recommendations are competent while also addressing any personal development needs on a continuous basis. Where an organisation has a dedicated investigation unit, such investigation specialists should look back at an historical investigation case and undertake a mind map session with their teams to understand any control issues. This should then be repeated on several differing case types. An invitation should also be provided to the audit department to attend the workshop and comment as to whether:  these issues had been raised before in the organisation (potentially highlighting cultural deficiencies); and  provide advice as to what the audit methodology to document the issues highlighted would be, what recommendations and actions should be considered and how to rate and score the issues.  The output of the workshop not only provides an understanding as to what a control weakness looks like, but also creates a relationship with the audit department (whether it be internal or outsourced) who, on an advisory basis, can assist with confirming audit issues that could be delivered back to the organisation post-investigation. The latter could include co- attendance at meetings with the business area to counter any transparency and technical perspective.  Step 2 – find and safeguard against repeat offences Often investigations, by their very nature, are focused on the specific allegations at hand and fail to consider the risk that potential repeat offences might very well be occurring elsewhere in the organisation. An organisations remedy is often just to issue a report to the business area that is based on the current investigation findings. Experience has shown that as part of an effective post-investigation control review process and proactive fraud risk management strategy, organisations should undertake an additional review using data analytics information, not only to assess if potential repeat offences have occurred with the case to hand, but highlighting other offences or breaches elsewhere in the business.  What will be the result? These additional tasks incorporated by an investigation team will often be viewed with trepidation but with correct facilitation and a step-by-step approach, a process can be adopted with ease and skills will be improved as a result. More importantly, this process will add value to the business which, in theory, should align itself to the investigation/internal audit mission statement. Adopting proactive fraud risk management will mean reduced repeat offences and, ultimately, save costs and protect the brand reputation.  Michael Fitzgerald is a Senior Manager, Governance Risk & Internal Controls, at Mazars.

Developing trust and respect on your board team

Monday January 21st, 2019 12:00:00 AM
BY KIERAN MOYNIHAN The challenge for board teams has never been greater in terms of the unrelenting wave of disruption happening in every sector: radical new business models, ferocious competition, regulatory change, new business models, technology disruption and geo-political crises. Each board team needs to be at the top of its game to help navigate the organisation through turbulent waters as well as grasp significant strategic opportunities.  One of the hallmarks of high-performing board teams is the ability to demonstrate consistently strong levels of high-quality challenge and debate which not only optimises the core function and decision-making capability of the board but builds sustainable, high-levels of respect and trust between the executive and non-executive board members. Outstanding levels of high-quality challenge and debate enable the board team to really push each other to maximise its intellectual firepower, the expertise and experience of each board member, the diversity of thinking styles around the table, the independence of the non-executive directors and, in doing so, to help the board team make the very best decisions as well as “see around dark corners” to spot early serious risks and threats to the organisation. Why do so many board teams, even with highly-experienced executive and non-executive directors, struggle in the area of challenge and debate? A few reasons. Poor leadership by the board chair and CEO in terms of enabling the highest levels of openness, accountability and legitimising genuine robust constructive challenge of the executive team; Lack of understanding by both execs and non-execs of how each individual board member needs to effectively contribute and behave in terms of tough challenge and resulting debates; A defensive attitude by the CEO and executive team that neither welcomes or facilitates challenge by the non-exec directors; A poor attitude and approach by the non-exec directors in terms of low-quality aggressive questioning, laziness/refusal to study the materials/issues properly or unnecessary challenge and second-guessing of the executive team; The board team in cruise-mode and too much politeness around the board table; And there are more where that came from. However, there are some practical steps boards are able to take to develop a virtuous cycle of challenge, debate, respect and trust within your board team. Nurturing challenge and debate The board chair has a critical leadership role in legitimising challenge, encouraging the non-execs to provide constructive oversight of the executive team and to facilitate high-quality  debate. Likewise, the CEO has a key role in setting an example of openness and accountability, and engaging with the non-execs to debate the key issues Developing mutual respect  As a board team improves the level of constructive challenge and debate, it gradually builds levels of respect and trust in each other.  Sharing perspective It is a lot easier to be on the receiving end of some tough challenge when you trust the board member raising it. While you might still disagree with their perspective, with truth and respect, you will listen properly and understand their view point which enables you to contribute effectively to the discussion. Transparency A board team can be at its very best when all board members feel that everything is out on the table, no information has been held back and, for better or worse, the brutal reality is in front of them. This usually requires an extremely open and highly accountable CEO and executive team who will provide the board with an honest and comprehensive picture, and flag bad news early even it reflects poorly on the executive team’s performance. This also requires a high-quality board information model which enables the non-execs to understand what often is a very large complex maze of operational, financial, sales, people and risk data. Working for the good of the board As a spirited give-and-take becomes the norm, each board member listens more effectively and learns to adjust their own interpretations in response to intelligent, thoughtful questions, responses and perspectives. This is ultimately what distinguishes the best board teams. It optimises the decision-making, enables the team to respond swiftly to a crisis and helps identify the transformational strategic opportunities. In summary, every board team has the potential to improve the levels of challenge, debate, respect and trust in the board team. It takes genuine commitment by all board team members and outstanding leadership by the board chair, CEO and company secretary.  Kieran Moynihan is Managing Partner of Board Excellence.

How to avoid disciplinary disasters and grievance catastrophes

Monday January 21st, 2019 12:00:00 AM
Despite employers often times having sufficient grounds for dismissal, they invariably lose unfair dismissal cases because fair procedures and the rules of natural justice were not adhered to but there are procedures you can follow do to avoid this. It's unfortunate when an unfair dismissal case is lost because advice from experienced professionals was not obtained before the dismissal procedure was put in place or, in a worst-case scenario, before the dismissal took effect. This is most often the case when it comes to court loses of this kind for companies Constructive dismissal cases can be taken by employees where they themselves terminate their contract of employment, with or without prior notice, due to the conduct of the employer. This starts with a grievance which an employee has concerning his or her terms and conditions of employment, working environment or working relationships. Employee grievances can arise for a variety of reasons such as changing work practices, alleged discrimination, bullying or harassment, health & safety issues, promotion and grading, issues with fellow employees etc.  First, let’s take a look at the legal framework: The Unfair Dismissals Acts 1977-2001 are intended to provide employees with legal protection from being unfairly or constructively dismissed from their jobs and to establish an adjudication system to provide redress for any employee.  Section 6(7) of the Unfair Dismissal Act states that in determining whether the dismissal is fair or unfair it has regard to: (A) The reasonableness or otherwise of the conduct of the employer in relation to the dismissal; and  (B) the extent, if any, of the compliance or failure in complying with the employer in relation to the employee to the disciplinary procedures or the provisions of the Code of Practice on Disciplinary and Grievance Procedures (Industrial Relations Act 1990) (Code of Practice on Grievance and Disciplinary Procedures) (Declaration) Order 2000.  The Rules of Natural Justice Require an employee is:  made fully aware of any formal allegation made against them; afforded the opportunity to reply to any formal allegation made against them; afforded the right to representation throughout the disciplinary and grievance processes; afforded the right to a full and objective investigation of the allegation or complaint; and afforded the right of appeal the outcome. Implementation A disciplinary procedure is designed to provide an objective and consistent process to address issues of misconduct, capability, competence or qualifications, or failure to meet company standards relating to behaviour or performance. The first step is to ensure that you not only have the necessary procedure in place but that it has been issued to and signed off by all employees in order to guarantee that you are in a position to correctly manage disciplinary issues in the workplace.  The aim of having a grievance procedure is to encourage consistency, transparency and fairness in the handling of workplace problems or complaints. It provides individuals with a course of action if they have a complaint, a point of contact and timescales to resolve issues of concern and aims at resolving employee problems quickly and informally.  Separation of process Separation of process is required in both disciplinaries and grievances. This means that the judge is not the jury. One person has responsibility for the investigation and one person has the responsibility for the outcome. Similarly, a different person who has not been involved has responsibility of the appeal stage. In some cases, this may be the Assistant Manager acting as the Investigation Manager; Office Manager acting as the Outcome Manager; the Managing Director acting as the Appeal Manager. Of course everyone should remain objective. Correspondence The separation of process extends to the correspondence which is issued through the disciplinary and grievance processes also. The invitation to the investigation meeting will be drafted by the Investigation Manager. This manager may also be involved in the suspension of the employee in cases of suspected gross misconduct and will also interview witnesses, finalise the investigation and draft a summary report to be issued to both the employee and the Outcome Manager. The invitation to the outcome meeting, where the employee has an opportunity to respond to the summary report and include any other comments, will be drafted by the Outcome Manager. The sanction or grievance outcome will be issued by the Outcome Manager and will include the process of appeal and to whom the employee can address their appeal.  Terms of reference Prior to commencement of the disciplinary and grievance process, a term of reference is put in place to include nominations responsible people/managers for each stage.  Note taking Note takers can accompany the managers at each stage. Minutes of all meetings must be provided to all parties, including the employee, to review after each meeting. Do I still need to comply if I have a small organisation? It is important to note that in smaller organisations the separation of process must still be adhered to. Case law has indicated this the separation of process is key to ensuring fair procedures within any organisations and no leeway is given to smaller organisations for failing to comply.   Caroline McEnery is Managing Director of The HR Suite and an HR and employment law expert. 

Crypto-assets need common EU-wide approach to ensure investor protection

Friday January 18th, 2019 02:59:28 PM
The European Securities and Markets Authority (ESMA) published its Advice to the European Union (EU) Institutions – Commission, Council and Parliament – on initial coin offerings and crypto-assets. The Advice clarifies the existing EU rules applicable to cryptoassets that qualify as financial instruments and provides ESMA’s position on any gaps and issues in the current EU financial regulatory framework for consideration by EU policymakers. ESMA has been working with National Competent Authorities (NCAs) on analysing the different business models of crypto-assets, the risks and potential benefits that they may introduce, and how they fit within the existing regulatory framework. Based on this work, including a survey of National Competent Authorities (NCAs) during 2018, ESMA has identified a number of concerns in the current financial regulatory framework regarding crypto-assets. These gaps and issues fall into two categories: For crypto-assets that qualify as financial instruments under MiFID, there are areas that require potential interpretation or re-consideration of specific requirements to allow for an effective application of existing regulations; and Where these assets do not qualify as financial instruments, the absence of applicable financial rules leaves investors exposed to substantial risks. At a minimum, ESMA believes that Anti Money Laundering (AML) requirements should apply to all cryptoassets and activities involving crypto-assets. There should also be appropriate risk disclosure in place so that consumers can be made aware of the potential risks prior to committing funds to crypto-assets. ESMA’s work on crypto-assets has highlighted a number of issues that are beyond ESMA’s remit. The Advice allows the EU Institutions to consider possible ways in which the noted gaps and issues may be addressed and subjected to further analysis. ESMA will continue to actively monitor market developments around crypto-assets while cooperating with NCAs and global regulators.

Corporate tax remains a key revenue source

Friday January 18th, 2019 02:55:16 PM
Taxes paid by companies remain a key source of government revenues, especially in developing countries, despite the worldwide trend of falling corporate tax rates over the past two decades, according to a new report from the OECD.   A new OECD report and database, Corporate Tax Statistics, provides internationally comparable statistics and analysis from around 100 countries worldwide on four main categories of data: corporate tax revenues, statutory corporate income tax (CIT) rates, corporate effective tax rates and tax incentives related to innovation. The new OECD analysis shows that corporate income tax remains a significant source of tax revenues for governments across the globe. In 2016, corporate tax revenues accounted for 13.3% of total tax revenues on average across the 88 jurisdictions for which data is available. This figure has increased from 12% in 2000. Corporate taxation is even more important in developing countries, comprising on average 15.3% of all tax revenues in Africa and 15.4% in Latin America & the Caribbean, compared to 9% in the OECD. Corporate tax revenues have also held up when considered as a percentage of GDP, where the average share increased from 2.7% of GDP in 2000 to 3.0% in 2016 across the jurisdictions included in the database. The new OECD analysis shows that corporate tax remains a key source of revenue, despite a clear trend of falling statutory corporate tax rates – the headline rate faced by companies - over the last two decades. The database shows that the average combined (central and sub-central government) statutory tax rate fell from 28.6% in 2000 to 21.4% in 2018. More than 60% of the 94 jurisdictions for which tax rate data is available in the database had statutory tax rates greater than or equal to 30% in 2000, compared to less than 20% of jurisdictions in 2018. Comparing statutory corporate tax rates between 2000 and 2018, 76 jurisdictions had lower tax rates in 2018, while 12 jurisdictions had the same tax rate, and only six had higher tax rates. In 2018, 12 jurisdictions had no corporate tax regime or a corporate income tax rate of zero. The OECD analysis highlights that CIT revenues are influenced by many factors, and therefore focusing on headline statutory tax rates can be misleading. For example, jurisdictions may have multiple tax rates with the applicable tax rate depending on the characteristics of the corporation and the income. Progressive rate structures or different regimes may be offered to small and medium-sized companies, while different tax rates may be imposed on companies depending on their resident or non-resident status. Some jurisdictions tax retained and distributed earnings at different rates, while some impose different tax rates on certain industries. Lower tax rates are often available for firms active in special or designated economic zones, and preferential tax regimes offer lower rates to certain corporations or income types. Another factor influencing CIT revenues is the definition of the corporate tax base. The OECD Corporate Tax Statistics database assesses how standard components of the corporate tax base reduce the effective tax rate faced by taxpayers, including the effects of fiscal depreciation and several related provisions, such as allowances for corporate equity. Taking these provisions into account, the database shows that “forward-looking” effective tax rates are generally lower than statutory tax rates, with an average reduction of 1.1 percentage points observed in 2017 across the 74 jurisdictions analysed in the database. Targeted tax incentives, such as for research and development (R&D) expenditures and intellectual property (IP) income, are widely used to reduce the corporate tax burden for specific activities. The new database is intended to assist in the study of corporate tax policy and expand the quality and range of statistical information available for analysis under the OECD/G20 Base Erosion and Profit Shifting (BEPS) initiative. In 2015, the OECD reported that base erosion and profit shifting was having significant effects on the corporate tax base, estimating revenue losses to governments from BEPS in the range of USD 100-240 billion (2014 figures), equivalent to 4-10% of corporate tax revenues. The new database, which will be updated annually, aims to improve the measurement and monitoring of BEPS. Future editions will also include an important new data source – aggregated and anonymised statistics of data collected under country-by-country reporting now being implemented under BEPS Action 13 – that will allow “backward-looking” assessment of effective tax rates actually paid by firms. The publication and data are accessible at: https://oe.cd/corporate-tax-stats. Source: OECD

Why some companies are profitable for longer than their competitors

Friday January 18th, 2019 02:51:57 PM
New research shows a firm’s competitive advantage can last more than three times as long as previously believed. INSEAD Assistant Professor of Strategy, Phebo Wibbens, found that companies with “higher-order” resources can greatly outlast their competitors. Traditionally, strategy scholars have focused on a firm’s operating resources – assets and capabilities that directly affect profit – when analysing its competitive advantage. Based on that assumption, high-performing firms were believed to have a run of success lasting on average about five years. But as IKEA, Apple and other firms have shown, a much longer period of success is available to some companies. Discovering what gives these firms and others like them their longer lasting success, Wibbens created a mathematical model based on empirical data covering 4,000 firms in the United States over three decades. In “Performance persistence in the presence of higher-order resources”, published in the Strategic Management Journal, Wibbens found that firms can make their operating resources go further when they are complemented with often intangible but valuable higher-order resources, such as superior strategic planning, merger & acquisition teams and innovation capabilities. With his model of the dynamics between resources and profits, Wibbens found that when both operating and higher-order resources were taken into account, firms enjoy a competitive advantage for 18 years on average. Competitive advantage -- conditions that give a company its favourable position -- had been thought to last only about five years on average. When evaluating their firms, executives tend to only consider their operating resources, ones that directly affect profit. Central to a firm’s long-term success, however, are “higher-order” resources, those intangible assets that improve a company and help drive long-term growth, such as strategic capabilities. Long-term successful companies must be able to change the way they operate; this is the fundamental idea of higher-order resources, also called dynamic capabilities.  “Higher-order resources are not quantifiable the way that profits are,” says Wibbens. “Fundamentally, both operating and higher-order resources are always idiosyncratic and unique. If there were a general prescription for better resource positions, every firm would be able to get them and these resources would no longer grant any advantage. This makes empirically measuring them a challenge.”  The model The average duration of competitive advantage based on previously used models (column a) is 5 years, about half the duration from the estimate of using the new model with only operating resources (column b). Adding the effect of higher-order resources (column c) almost doubles the estimated duration of competitive advantage again to approximately 18 years. “To confirm the importance of higher-order resources for prolonging competitive advantage, I had to consider the patterns expected in profit and other large-scale observable data, like the persistence of profit growth. Then I used statistical procedures to find the data consistent with what we would expect in firms with higher-order resources – akin to how physicists use extensive computer models to detect the signal of otherwise undetectable new particles such as the Higgs boson,” explains Wibbens. From an academic perspective, one of the key contributions of the article is to distinctly define operating and higher order resources in a mathematically rigorous way. In addition to the findings based on the model and theory, Wibbens’ article shows academics how using Bayesian hierarchical analysis in the field of strategy can provide new insights on core strategic questions, like what makes some firms more profitable for longer.  Implications for managers  In the article, Wibbens suggests ways for managers to evaluate their own firms’ higher-order resources and build strategies based around their organisations’ unique resource strengths. Operating resources lead to persistence in the level of profit differences; higher-order resources lead to persistence in the growth of profit differences.  Higher-order resources help bolster operating resources. They produce persistently better resources over the long term, leading to a longer stretch of competitive advantage. Although broad, these findings demonstrate that acknowledging the importance of higher-order resources is a decidedly valuable insight.   Source: INSEAD

IAASA’s financial reporting enforcement activities in 2018

Friday January 18th, 2019 02:37:13 PM
IAASA has published summary information of its financial reporting enforcement activities undertaken during 2018. The primary function of IAASA’s Financial Reporting Supervision Unit is to examine the compliance of financial reporting of those listed entities coming within its remit with accounting standards. In 2018, IAASA:  examined  39 annual and half-yearly financial statements; and raised 164 separate matters with those companies. As a result, 18 companies have provided 134 undertakings to improve their financial reporting in future years. IAASA carried out 4 thematic examinations of aspects of companies’ financial reporting practices and published the results of those desk-based surveys. The outcome of 14 financial reporting decisions reached in 2018 were published by IAASA in the year. The Snapshot document may be accessed here. Source: IAASA

PAYE Modernisation, one month on! New year, new payroll legislation (Sponsored)

Friday January 18th, 2019 11:10:17 AM
PAYE Modernisation was introduced on the 1st of January 2019 and affects the way all employers process payroll. It is the most significant change ever to the Irish PAYE system. It is important that all employers and payroll processors understand their new real time reporting obligations. Free PAYE Modernisation Webinars Thesaurus Software and Revenue have teamed up for another series of free, CPD accredited PAYE Modernisation webinars. These upcoming webinars have a new agenda. We will look at what has happened since PAYE Modernisation has gone live and at the challenges businesses are facing. The webinars are aimed at giving you an overview of how the new real time reporting works, the benefits of this new system and how to make sure that your business is PAYE Modernisation compliant. We will peel back the PAYE Modernisation legislation to outline clearly how PAYE Modernisation affects the payroll process and what is expected from you in 2019 and going forward. Due to the high level of interest, it is expected that the training webinars will soon be completely booked out. Register now to avoid disappointment. Webinar Agenda What is PAYE Modernisation and how to comply? How PAYE Modernisation will streamline your processes The benefits of PAYE Modernisation Recent updates and changes to PAYE Modernisation Reporting to Revenue in real time Making corrections to the payroll The approach to non-compliance and penalties How Thesaurus Payroll Manager & BrightPay are supporting your PAYE Modernisation journey. Guest Speaker: Revenue The first webinar in the series takes place on January 30th and is CPD accredited for accountants and payroll bureaus. Due to phenomenal demand, we have also added more dates in February. Click here to register Thesaurus Software & PAYE Modernisation Thesaurus Software is the number one payroll software provider in Ireland with two different payroll packages to choose from - Thesaurus Payroll Manager and BrightPay. Both systems include full PAYE Modernisation functionality at no extra cost. We have worked closely with Revenue to ensure that both systems are fully compliant. Our products are used to process the payroll for over 125,000 business across Ireland and the UK. BrightPay won the Payroll Software of the Year 2018 award at this year’s Accounting Excellence awards. With a 99% customer satisfaction rate, our customers can rest assured that all required functionality is catered for. We have made it easier than ever before to switch to BrightPay or Thesaurus Payroll Manager - You can import your payroll data from Sage, Collsoft, Big Red Book, and many others in a matter of minutes. Book a BrightPay demo | Thesaurus Payroll Manager demo

Conducting a Career Audit

Friday January 18th, 2019 10:24:27 AM
The concept of a Career Audit is underpinned by taking time out to review and reflect on where you are now in your career, how it is progressing, what skills you can leverage, assessing the gaps and then using all of this valuable information to formulate the next steps of your career. It is a really enlightening process that is a fundamental part of effectively managing your career. The Career Coaching and Recruitment team in Chartered Accountants Ireland invest a significant proportion of our time working with members to help you devise your career strategy, particularly at this time of year when you are planning the year ahead and having goal setting meetings. Questions that arise most often typically relate to career progression, comparisons with other members at the same career stage, getting a promotion, salary and of course career sustainability. Conducting a career audit allows you to stand back and critically review your career performance. I would suggest that it should be an annual ritual that forms part of an overall career planning strategy. It provides you with the headspace to take stock, to plan and to deal with obstacles that come up. With this in mind the following are some questions to put to yourself to help you to conduct your own Career Audit. If you are honest with yourself the answers should provide you with beneficial and thought provoking material that will prove useful when you are reviewing and strategically planning your career. Questions Goals What are your overall career objectives? What are your short, medium term and long term goals? Where do you want to be in 3 or 5 years’ time? Consider these questions in relation to what you had originally set out to achieve, as well as assessing what your ambitions are now. It is beneficial to consider these objectives and goals from a professional as well as a personal perspective. These dimensions of your life should not be considered in isolation as there is inevitably cross over. How do you measure success? We all have our own definition of success. For some it is based on financials and for others it can be driven by such factors as job satisfaction or work-life blend. Be very clear on how you define success. For example, ask yourself what would career success look like for you in the coming 1, 3 or 5 years? Often visualising ourselves in a particular space or environment can be the motivation or catalyst some of us need. How happy are you with the career choices you have made to date? What has driven those career choices? These questions will enable you to better understand your motivations and to identify any patterns that may exist. It is always a good idea to look at the reason for a role or career change to understand what the driver of the decision was. Do you find your role fulfilling and what level of job satisfaction are you experiencing? As the saying goes ‘if you find the right job you will never work a day in your life’. We spend so much of our lives in work and we owe it to ourselves to be in a role that we enjoy and find rewarding. Is your career choice in line with your personal and professional values? Do you connect with the role and industry that you work in? Ultimately we can obtain greater job satisfaction and career success if we are in a role, company and sector that are compatible with our personal values. Success Bank What have been your key achievements to date? What are you proudest of to date? We often don’t take time out to consider what we have actually accomplished. Recognising our achievements is hugely motivational and can help to provide you with the impetus to move towards reaching future career goals. When it comes to self-promotion and personal branding being aware of your personal success bank is a must. What new skills and competencies have you acquired throughout your career? What unique selling points can you now offer as a result? Draft an inventory of the key skills and competencies that you can now bring on to the next stage of your career. What unique combination of skills to you bring? Regularly Update your CV to ensure that all new learning and skills are captured as they are gained. Professional Development How steep has your learning curve been in recent years?  If you find that your development has stalled you should look at ways in which you can start to learn and develop again. Peer Review How has your career progressed relative to your peers? Conducting a benchmarking exercise to see how your career progression stacks up relative to your peers can provide objective and interesting insights. Keep in mind though that we don’t all have the same goals and motivations so you may not be comparing like with like. That said, it is always good to know what the competition are up to! Salary/Package How does your salary and package compare with the rates currently being offered for chartered accountants at your level? This information can readily be obtained from salary surveys and also through speaking with recruitment professionals or contacts. How satisfied are you with your salary and package? What scope is there for further movement in this area? Although it is important that your salary is competitive there can often be other factors to consider such as the industry sector, location and other non-monetary benefits like flexible working arrangements. Is your career on track? If not, why not?  If your career has stalled the starting point for any change is to take an objective look at what hasn’t worked out and why. Then reflect on what you have learned about your career and yourself. What can you now do differently with the value of hindsight? To jolt your career develop an action plan that incorporates these learnings.   Staying relevant How have you ensured that your skills, knowledge and experience are up to date and relevant in the current market? In an era of life-long learning there is an increasing expectation that those interested in career success will commit to continuously learning. This can take the form not just of classroom learning but can also include on the job learning. What have been the recent developments in your area? What likely impact are they going to have on your career? The market moves quickly be aware of what is happening in your field or sector and then consider the potential implications for your career. This will enable you to be ahead of any emerging trends. Your Network How strong and current is your network? How much time do you invest in building on this valuable resource? What contacts have you recently added to your network? What support could you rely on if needed? Networking is a crucial part of any career development strategy. Mentor Do you have a mentor? Who can you look to when you need advice and support regarding career decisions? Who can act as your trusted careers advisor?  We all need an independent sounding board who can provide insights based on their own experiences and knowledge. Work Life Balance How would you rate your worklife balance? What time do you dedicate to your well-being? Obtaining the balance that works for you is essential to achieving long term and sustainable career satisfaction. Mind over Matter How do you feel about yourself? What messages you do send yourself? What is your level of self-belief? How has your mode of thinking impacted on your career? Are you a glass half full or half empty type of person? The power of positive thinking is not to be underestimated when it comes to our career potential. Self- awareness in relation to our thought processes can enable us to change career limiting beliefs. Next time you hear yourself being negative, stop that thought and test its’ validity and accuracy. Would you let others speak to you the way you speak to yourself? If not why are you doing this to yourself? Positive mental attitude is a key ingredient for career success Overview Ultimately you own your career and you have overall responsibility for creating and managing your success. Time invested in ensuring that you get the most from your career will be something that will pay dividends for you both now and into the future. The starting point for an exercise like this is to decide to be honest with yourself; you owe it to yourself to do so. Equally as important is to listen to what your instincts are telling you and to act on them. This process will take time so don’t expect to make any immediate changes. It is important to consider all the possible options open to you. There is also help and support available with this process. You can contact Karin Lanigan Manager of the Career Development and Recruitment Service of Chartered Accountants Ireland for career coaching and advice.






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