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Last feed update: Sunday February 17th, 2019 11:15:59 PM

Trust and Brexit amongst priorities for CMA in annual plan

Friday February 15th, 2019 03:21:32 PM
The Competition and Markets Authority (CMA) will get to the heart of improving trust by prioritising work in markets that really matter to consumers, so they are reassured that what they are seeing is what they are getting. The CMA will build on its track record of tackling issues that jeopardise trust, including recently securing a victory for UK holidaymakers by getting some of the biggest online hotel booking sites to change their ways. The annual plan highlights how the CMA has already carried out sector-wide reviews to protect shoppers and make markets work in their favour. This includes recommending a package of reforms to government and regulators to address concerns raised by Citizens Advice that some companies are penalising millions of long-standing customers. The CMA will also prioritise cases where people may be losing out because they are vulnerable to exploitation, or getting a poor deal due to their personal circumstances. In such cases, the CMA will not hesitate to take tough action on harmful business practices and to protect those who suffer most. In the coming weeks, it will publish the outcomes of its in-depth programme of work on vulnerable consumers, which it launched in 2018. The CMA is meanwhile consulting on proposals to refer the funerals sector for an in-depth market investigation because of concerns over large price increases. The CMA is publishing its annual plan when the timing and nature of the UK’s exit from the EU remain uncertain. The plan makes clear that CMA will be ready to step up to its additional responsibilities, including a new UK state aid function, whether at the end of March or later. Whilst a ‘no deal’ exit would present challenges in the short term, the period ahead also provides opportunities for the organisation to secure better outcomes for UK consumers and to take on a bigger role on the world stage. Due to the continued uncertainty around EU exit, the CMA is publishing its priorities at a high level. It intends to continue to refine and explain its plans as clarity emerges. The CMA enters 2019/20 with a substantial volume of ongoing work and at the time of publication has 23 competition enforcement cases; 6 consumer enforcement cases; 12 merger investigations, and 2 market studies under way. Read the annual plan here. Source: Competition & Markets Authority.

Insolvencies creep up in England and Wales

Friday February 15th, 2019 03:15:11 PM
New analysis from KPMG UK has revealed a challenging end to the year for businesses in 2018, as the total number of companies in England and Wales entering into administration during the fourth quarter rose modestly. A study by KPMG of notices in the London Gazette shows that a total of 368 companies went into administration between October and December 2018, compared with 322 in the previous quarter; an increase of 14%, though the number was a significant increase on the 277 administrations seen during the same period in 2017. Blair Nimmo, head of restructuring for KPMG UK, said: "The latest insolvency figures reflect an annual and quarterly increase in the number of businesses becoming insolvent, which is disappointing but by no means surprising - particularly after what was for many a lacklustre festive trading period. We continue to see retailers and casual dining chains in the headlines with various high profile insolvencies coming to the fore in recent weeks, as they fight to keep pace with changing consumer habits, reduced consumer confidence and increasing cost pressures. This in turn has also impacted supply chains, particularly those in the FMCG sector, which saw insolvencies increase by over a third in the final quarter. "Looking at other sectors, the end of 2018 also proved to be testing for a number of engineering and manufacturing companies. With a fall in new car sales in 2018, the automotive sector in particular is certainly feeling the pinch from consumers holding back on major purchases, lengthened supply chain lead times and Brexit uncertainty. "Throughout January, we noticed an uplift in general restructuring activity from companies requiring assistance in the generation of additional funding in response to a difficult trading environment. "There is undoubtedly an increased nervousness for the business community, which has only been amplified by the current political environment. Whilst it remains difficult to predict what impact the final Brexit outcome will have on businesses, we are encouraging clients to develop contingency plans, specifically in areas such as funding, working capital, supply chain, contracts and people. That being said, it will be interesting to see how the stats move throughout 2019 as we begin to see the real impact of Brexit take hold." Blair Nimmo concluded: "Overall, the latest figures reflect a challenging, but not alarming picture for businesses across the country. While political and economic uncertainty means most businesses are adopting an extremely cautious approach to any form of investment, with the right approach, businesses with sound plans, balance sheets, funding and leadership, are in a position to take advantage of the current climate." Source: KPMG.

Global consultation on quality management for firms and engagements now open

Friday February 15th, 2019 02:46:54 PM
The International Auditing and Assurance Standards Board (IAASB) seeks public comment by 1 July 2019 on three interrelated standards that address quality management. The proposals bring important changes to the way professional accountancy firms are expected to manage quality - for audits, reviews, and other assurance and related services engagements. The proposed standards include a new proactive risk-based approach to effective quality management systems within firms that establish the foundation for consistent engagement quality. The new approach improves the scalability of the standards because it promotes a system tailored to the nature and circumstances of the firm and its engagements. The IAASB proposals are intended to improve engagement quality through:   Modernising the standards for an evolving and increasingly complex environment, including addressing the impact of technology, networks, and use of external service providers; Increasing firm leadership responsibilities and accountability, and improving firm governance; More rigorous monitoring of quality management systems and remediating deficiencies; Enhancing the engagement partner’s responsibility for audit engagement leadership and audit quality; and Addressing the robustness of engagement quality reviews, including engagement selection, documentation, and performance. Given the significance of the changes and the need for firms to adjust how they manage quality, the IAASB has also developed draft guidance and tools, such as examples and frequently asked questions. These materials will help firms understand the proposals, including how to apply them in different circumstances. Exposure drafts Overall Explanatory Memorandum, The IAASB’s Exposure Drafts for Quality Management at the Firm and Engagement Level, Including Engagement Quality Reviews  Proposed International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements (previously ISQC 1)  Proposed International Standard on Quality Management 2, Engagement Quality Reviews  Proposed International Standard on Auditing 220 (Revised), Quality Management for an Audit of Financial Statements  Comments on the exposure drafts are requested by 1 July 2019. Source: The International Auditing and Assurance Standards Board.

Guidance paper for Credit Unions on business model strategy published

Friday February 15th, 2019 02:36:12 PM
The Central Bank of Ireland recently published a paper "Business Model Strategy: Guidance for Credit Unions". The paper highlights the challenges facing credit unions as they seek to adapt their business models in order to meet the evolving needs of their members, while addressing ever increasing competition. The purpose of the guidance is to support credit unions in adopting a structured, risk-focused approach to business model strategy, while setting out the Central Bank’s key risk considerations and related supervisory expectations. The guidance highlights that credit unions are legally obliged to develop strategic plans. Strategic plans need to be tailored to the credit union's individual financial circumstances and capabilities, as well as common bond dynamics, while addressing operational and commercial challenges. The guidance notes that it is incumbent on credit unions to demonstrate sound and prudent risk-focused strategy formulation, business planning and implementation, aimed at the delivery of member products and service needs sustainably. Ownership of strategy and implementation by credit union boards is emphasised. The guidance advocates that when credit unions decide to offer a broader range of products and services to members, they should consider the full range of risks involved. Credit unions are expected to have the necessary resources and the competence and capability to deliver any new strategy and to manage the associated risks involved, in order to protect members. The guidance notes an increased reliance by credit unions on outsourced shared service provision, including collaborative efforts between credit unions to support scale and cost efficiencies, and sets out related-risk considerations for boards to consider. Commenting on the guidance, Patrick Casey, Registrar of Credit Unions said: "When developing business model strategies to address underlying member demand on a sustainable basis, it is essential that credit unions adopt a structured risk-based approach appropriate to their individual financial circumstances and capabilities, as well as common bond dynamics. This guidance forms part of a range of prudential supports provided by the Central Bank to credit unions. These supports are provided at a time when credit unions are seeking to adapt their business models in order to meet the evolving needs of their members while addressing increasing competition. Ultimately, it is a matter for each credit union board to determine the appropriate business model for their credit union. The structured risk-based approach set out in the guidance paper, should be a useful input for boards seeking to undertake the business model change process." Source: Central Bank of Ireland.

It's time to create a culture of wellbeing in your workplace

Friday February 15th, 2019 12:08:03 PM
It's no longer enough to offer staff healthcare cover when it comes to their wellbeing. Businesses have to step up if they want a happy, healthy and productive workforce. With Ireland reaching almost full employment and your competitors offering tempting opportunities to recruit your staff, it is more important than ever to ensure your company offers more than just a pay cheque at the end of the week. A lot of companies offer health insurance cover and this is a fantastic initiative but companies who have a real culture of wellbeing go well beyond this step. Improved workplace well being can lead to sustained improvements within the office, including increased creativity, improved employee loyalty, higher productivity and better overall customer satisfaction. In light of this information, many employers are now concentrating on workplace wellbeing initiatives. So, how do you promote a culture of wellbeing in the workplace? Culture Committee To ensure you successfully introduce a wellbeing initiative within your workplace, you must ensure there is a well thought out plan in place with a group of people responsible for its succession. To ensure you have the right people behind this, you should advise staff that you are putting together a new committee to solely focus on employee wellbeing and engagement. Ideally, committee membership would be voluntary. The committee should be made up of a minimum of two people at any time. There should be a time-frame on the sitting of any members, such as six months. The committee will be tasked with coming up with new initiatives and organising different activities throughout their term to ensure a culture of wellbeing is being fostered. Information According to the findings by the Nutrition and Health Foundation (NHF), many of Ireland's workers want to become healthier and would like to see their employers playing a role in this. This could be as simple as providing information on general wellness ideas such as group walks after work, charity events like Darkness into Light, nutritional educational talks or articles, or following Operation Transformation. These can be done as team events or you could, where possible, allow some element of this to be included in the employees’ working hours. The key when starting off is to ensure the activity is realistic and achievable. You can always add new and bigger initiatives once you have mastered the smaller, more practical ones. Communication Encourage the committee to meet with employees regularly on a one-to-one basis and have regular group brainstorming sessions. The committee members need to make the other employees feel part of the process by listening to their needs and suggestions. If you feel employees would not be forthcoming with ideas, a good way to access unfiltered information and ideas would be through a staff survey where the results are anonymous. Following the above points will result in creating a real culture that promotes employee wellbeing. Caroline McEnery is the Managing Director of The HR Suite and HR and Employment Law Expert. Caroline is a former member of the Low Pay Commission and is also an adjudicator in the Work Place Relations Commission.

Seven things to consider before moving to the cloud

Friday February 15th, 2019 11:24:33 AM
Not every cloud storage provider is cut from the same cloth, so there are some things you should consider before putting the business's most valuable asset in their hands – data. Carmel Owens explains. There are several considerations when selecting a cloud storage provider; however, you should always start with the most important question: how important is your data to your business? Product security Data security is paramount, as is an understanding of any compliance obligations. Start with getting a clear understanding of the responsibility of each entity and how the provider meets those responsibilities, including the location of decryption keys, two-factor authentications, role-based access controls, encryption in transit and at rest, as well as platform-level protection such as distributed denial-of-service (DDOS) attack and intrusion detection system/intrusion prevention system (IPS/IDS). Providers should offer monitoring and visibility for all data interactions with cloud storage/backup. Data location should be considered if there are compliance obligations that require data sovereignty. Vendor pedigree The wide array of start-up cloud storage and backup providers on the market helps widen the choice for customers, however, consideration should be given as to the risks of those without a proven pedigree in providing these services. What happens if these companies fail? Does the provider have good customer service, standards and certifications, and can they provide evidence of these? Can the provider offer customer references, white papers, reference architectures, etc.? Does the provider offer migration services and service road maps? Service exit A key driver for adopting the cloud is the agility it offers, but that should extend not only to onboarding but also to exiting the service. Organisations should be wary of the possibility of vendor lock-in and whether the service inhibits the ability to move data to a different location, service or provider. Functional product features Consideration should be given to the functional features that you need, such as: archive; object, block and file storage; file-sharing and synchronisation; file-versioning; simple object access protocol (SOAP) abd representational state transfer (REST); and support for various access requirements (public or private connectivity). To achieve this, a detailed understanding of your requirements is required. The more mature providers out there will be able to assist in assessing your business needs and provide an overview of these functional requirements. Non-functional product features Consideration should be given to the functional features that you need. Having the ability to measure the service you are receiving through a variety of criteria allows you to make informed decisions about the quality of the service, such as availability, scalability, performance, manageability, integration, professional resources and, of course, cost. Technical and architectural expertise The provider needs to be able to implement a solution that meets your environmental and data needs. One major example is having the right solution for your organisation’s volume of data: enterprise-scale backup must account for hundreds of terabytes of data, whereas small- to medium-sized business data volumes are typically below 10TB. Similarly, backing up from multiple sites versus one large site is going to be different. One thing to consider when choosing a provider is designing the network to make sure you have reliable connectivity and bandwidth for backups to be completed successfully within your backup windows. Meet your business and cost requirements The solution should match your business requirements: Is the backup going to be used only for data/file restores or for recovery in the event of a disaster? Does your provider have the expertise to recover your business from that data? What are the recovery time objectives achievable for recovering from that backed up data? Does your business require the ability to restore locally in addition to storing data remotely in the cloud? Can your provider offer the flexibility and scalability of the public cloud for long term data retention? Are you looking for fully managed backups (since you don’t have the skills internally) or for self-service backups?  Carmel Owens is the Ireland Country Manager at Sungard AS.

The future success of the CFO depends on robots

Friday February 15th, 2019 10:49:03 AM
The traditional role of the CFO is evolving at a rapid pace. If you want to succeed as a CFO going forward, you have to adopt and embrace the technological innovations and changes happening around you, says Xiomara Sanchez. The role of finance is changing. Transactions will be touchless as automation, cognitive and analytics reach deeper into finance operations, self-service will become the norm, and new service-delivery models will emerge with a talent mix of robots and humans. The amplified intelligence leveraged from internal and external data will strengthen the role of the CFO, but only if technology is leveraged to truly optimise it. While the traditional CFO’s role focuses on operational activities of compliance, control, cost reduction and getting the numbers right, many CFOs are now facing the next challenge of evolving finance further as a value-providing function that supplies business insights and drives decision-making support. Digital is leading the transformation of Finance and the CFO is in the driver’s seat. As Deloitte outlined in a recent report, Finance in a digital world, digital presents a multitude of new opportunities that will allow the CFO to explore and utilise larger data sets of information, to process it effectively and efficiently, and leverage it to drive insight and decision-making. New tools New challenges require new tools. Here’s the top seven technologies that can help the CFO deliver on this new role: Process robotics: which enables the automation of transaction processing. ‘Bots’ perform recurring activities more efficiently with less risk of errors while reducing the cost of manual and routine processes. Cognitive computing: advancements in machine learning, natural language generation, and speech recognition have broadened opportunities for automation to reduce costs and improve accuracy on simple and complex transactions. In-memory computing: allows you to access large volumes of consolidated data with increased processing power to enhance the visibility of information through efficient processes. Cloud computing: provides greater flexibility and scalability resulting in shortened close cycles, reduction to reconciliations and data entry through a single platform. Visualisation: the innovative use of interactive technology helps generate user-friendly dashboards, allowing users to explore large, high-density data sets through self-service reporting. Advanced analytics: tackle the crunch questions by sourcing greater volumes of data and performing more rigorous pattern recognition and predictions using data science. Blockchain: a digital distributed ledger where transactions are verified by all participants, securely stored on a network of distributed and connected nodes. This increases transparency and the speed of exchange between entities while reducing the number of intermediaries. The pace of digital is putting new pressures on finance to adapt. Digital disruption is a given, but how do you get started? Smart CFOs are investing in fully robotised and automated transactional processes and controls, the stepping-stones to enable the next big shift. This change will empower the CFO to focus on making the decisions that maximise business and customer impact, while embedding finance as a key business partner who is prepared for the fourth industrial revolution. Xiomara Sanchez is a Senior Manager in Deloitte’s Finance Transformation team.

Technical roundup 15 February

Thursday February 14th, 2019 04:02:30 PM
Developments of interest this week are set out below.    Ireland                  Chartered Accountants Ireland has issued its comments on the updated views of the UK Competition and Markets Authority (‘CMA’) regarding steps that may be taken in order to enhance market choice, competition, quality and resilience, issued in December.  The letter of comment can be read here.  The CRO has issued its regular gazette. UK The UK government has announced terms of reference for the next stage in its review of audit quality and effectiveness.  Sir Donald Brydon will lead work to develop recommendations as to how audit can better address changing expectations and needs of users of audited financial statements, and better serve the public interest.  Sir Donald is expected to make a report to the Secretary of State for Business, Energy and Industrial Strategy by the end of 2019.  . The UK government has also issued updated guidance on environmental reporting, relevant to companies and limited liability partnerships. European The European Supervisory Authorities have published final recommendations regarding amendments to rules relating to provision of information in relation to Packaged Retail and Insurance-based Investment Products (PRIIPs).  International The IASB has issued its February 2019 update, noting progress on current projects, which include consideration of how management’s commentary in annual reports can be enhanced, updates to the IFRS for SMEs and enhancements to IFRS 17, Insurance contracts. Future meetings will take each of these topics forward and determine appropriate changes and additions to current standards. The Canadian Accounting Standards Board has prepared a research paper to support IASB’s project to review and update IFRS 6 ‘Exploration for and evaluation of mineral resources’. The paper seeks to identify accounting challenges in the extractive sector. Amongst its findings, the paper notes that          -  the sector is experiencing pressures as a result of a weak commodity price              environment and pipeline capacity constraints          -  these pressures have cause a decrease of publicly traded entities in the                sector, as a result of mergers, acquisitions and bankruptcies. Nick Anderson, a member of IASB, has issued an article discussing reporting of corporate performance and how the quality of reported profits may be best understood. Questions he suggests are relevant include:           -   How much capital has been used to generate reported profits?           -   Does the net profit include gains or expenses that are unlikely to occur in                 future?           -   Are reported profits supported by cash flows?           -   What longer term risks does the entity fact, including environmental matters?         The article may be accessed here. 

PAYE Modernisation: How to deal with employees commencing and leaving employment (Sponsored)

Thursday February 14th, 2019 03:16:49 PM
Employers are required to notify Revenue of any new employees or employees who have left their employment. With PAYE Modernisation, some employers are confused as to what is required of them in these scenarios. From 1 January 2019, employers are no longer required to submit a P45 Part 3 or a P46 to Revenue to register a new employee. Instead, to commence a new employment, an employer will now submit a Revenue Payroll Notification (RPN) request for the new employee. This will create the employment on Revenue’s side and Revenue will send an RPN response back into the payroll software advising of the tax credits, cut off points, etc. to be applied to the employee's pay. The employee’s start date will subsequently be reported to Revenue in the first Payroll Submission Request (PSR) you submit for that employee. PAYE Modernisation has also abolished the requirement for employers to issue a P45 to an employee and submit the P45 Part 1 to Revenue when they leave their employment. Instead, an employee’s leave date will be reported to Revenue in the final payroll submission made for that employee. Once a leave date is entered in the payroll software, this leaver information will automatically be included in the PSR for the relevant pay period. Interested in finding out more about PAYE Modernisation? Download Thesaurus Software’s free eBook for employers, Surviving PAYE Modernisation. In this guide, we discuss the key changes involved with PAYE Modernisation and what employers need to do to avoid non-compliance penalties from Revenue. Click here to download their free guide. Register for Thesaurus Software’s free PAYE Modernisation webinar, PAYE Modernisation: Three Months On!! New Year, New Payroll Legislation, taking place on 14 March, 11.00am. During the webinar, Thesaurus Software and Revenue will discuss what has happened since PAYE Modernisation has gone live and what challenges businesses are facing. Click here to book your place now. BrightPay & PAYE Modernisation BrightPay is created by Thesaurus Software – the number one payroll software provider in Ireland. BrightPay include full PAYE Modernisation functionality at no extra cost. We have worked closely with Revenue to ensure that the software is fully compliant. BrightPay won the Payroll Software of the Year 2018 award at this year’s Accounting Excellence awards. Our products are used to process the payroll for over 200,000 business across Ireland and the UK. Book a BrightPay demo | Download 60 day free trial This article was sponsored by Thesaurus Software.

Five things you need to know about tax, 15 February 2019

Thursday February 14th, 2019 11:48:56 AM
Find out about Revenue’s assessment of the first month of PAYE Modernisation, the latest on Making Tax Digital for VAT and how the EU wants more reform from countries to avoid the blacklist of non-cooperative jurisdictions.            Ireland Read Revenue’s statement giving an update of the first month of go live for PAYE Modernisation Approximately 45,000 “non-filer letters” are issuing from Revenue to business taxpayers who did not return a 2017 Form 11. Non-filer letters for self-assessed taxpayers with passive income will issue in the next 3 to 4 weeks. Read more   UK HMRC have updated VAT Notice 700/22 which deals with Making Tax Digital for VAT Check out the latest Digital Update from HMRC   International The EU has informed the governments of six countries that recent changes made to their laws do not go far enough to avoid the EU’s blacklist of non-cooperative tax jurisdictions. Read more  

Series 21 - Back to Brexit Basics - Simplified customs procedures in UK

Thursday February 14th, 2019 11:46:03 AM
After a short break, this series is back with a look in more detail at the simplified customs procedures the HMRC propose to introduce in the event of a no-deal Brexit. Transitional Simplified Procedures (TSP) HMRC will introduce simplified customs procedures for 145,000 UK importers who trade with the EU in the event of a no-deal Brexit to enable goods to move freely through the UK.  This will also give traders a chance to prepare to apply the same customs processes when trading with the EU that already apply when trading with the rest of the world.  These simplified procedures will be in place for at least a year from 29 March 2019. HMRC have written to affected traders telling them about the Transitional Simplified Procedures (TSP) for customs which will make importing easier for a year after Brexit in the event of a no-deal. The TSP will mean that traders can import goods into the UK and defer making a full customs declaration and paying customs duties.  Specific information must be included on the declaration including: The date and time the goods arrived in the UK A description of the goods and the commodity code The quantity imported Purchase and (if available) sales invoice numbers The customs value of the goods The serial numbers (if appropriate) Delivery details Supplier details After the goods have been imported: a supplementary declaration must be sent by the importer by the fourth working day of the month following the arrival of the goods into the UK HMRC will take a direct debit on the 15th day of the month after the goods arrive in the UK if there are duties or taxes to pay Businesses must register for TSP to be able to transport goods from the EU into the UK without having to make full customs declarations at the border. Traders are able to postpone paying import duties for a month after import.  Import VAT will be due on the next VAT return rather than when the goods arrive at the UK border. Businesses can register for TSP from 7 February 2019 if they are established in the UK, import goods from the EU and have an EORI number.  The policy will be reviewed three to six months after it is introduced on 29 March 2019 to see how it is working. Businesses will be given at least a 12 month notice period before withdrawing the TSP.  After that time period has elapsed businesses must apply the usual customs processes to imports from the EU.  It’s envisaged by the UK government that the 12 month notice period will give business a chance to prepare. More information on the TSP can be found on Gov.uk and you can also read a copy of the letter sent to traders. Read all our Brexit updates on our Brexit web centre.

Brexit Bulletin: New Institute no-deal Brexit information centre

Thursday February 14th, 2019 11:45:12 AM
“No news is not always good news”. These were the words of European Council President Donald Tusk this week indicating that there is not much in the way of progress to report on EU/UK negotiations.  The Institute has created a hub for members to read all published guidance from the UK, Irish and EU authorities to help prepare for the possibility of a no-deal Brexit. This week you can also read practical examples of how the welcomed proposals to delay VAT on imports in the UK and Ireland will affect you as well as the latest in our Back to Basics series which looks at the simplified customs procedures proposed by HMRC.  No deal guidance The Institute has created a dedicated hub on its Brexit webpage which collates guidance and information leaflets produced by the UK and Irish governments and the EU to help businesses and people prepare in the event of a no-deal Brexit.  The page will be updated as information is released by the authorities.  . You can also read the practical customs guide prepared by the Institute and ICAEW using this link.   Practical example of the VAT effect of Brexit Last week the Irish government joined the UK government in announcing proposals to postpone the payment of VAT on UK imports in the event of a no-deal Brexit.  This proposal was welcomed by the Institute as we have been calling for this method for the past two years. Without the introduction of the postponed method of accounting for VAT, the way VAT arises on goods imported into Ireland from the UK and into the UK from Ireland would change after Brexit.  At the moment, both the UK and Ireland are EU Member States and goods moving between EU states are treated as intra- community acquisitions.  The purchaser is required to self-account for VAT on a reverse charge basis. For business to business purchases, the supply is zero-rated in the Member State of dispatch and the purchaser accounts for VAT in their VAT return that is due for the period in which the acquisition took place. The rate of VAT is the rate that applies in the Member State of the purchaser..  If the purchaser is entitled to an input credit for the VAT payable on acquisition, they can claim this on the same VAT return   and so the VAT cost is usually neutral.  For example: A trader in Ireland purchases goods to the total value of €10,000 from the UK in February 2019.  These goods will be onward sold as taxable supplies in the Irish business.  The UK company does not charge VAT on the supply to Ireland and instead the Irish trader accounts for  VAT on the purchase at the rate applicable in Ireland (23 percent) which amounts to €2,300.  The Irish trader can then also claim a simultaneous input credit of €2,300 as the goods were purchased for taxable supplies (and assuming the purchase is deductible for tax purposes).  Therefore from a cash flow perspective, no VAT is payable on the VAT return in respect of this transaction. After Brexit – no postponed method Looking at this scenario after 29 March 2019 if there is no other agreement, the goods purchased from the UK into Ireland will be regarded as imports from a country outside of the EU.  For imports from outside the EU into the EU, importers must pay the VAT to the tax authority in the importing country at the time when the customs duties are paid rather than at the time of filing their VAT returns. Imported goods are liable to VAT at the same rate as applies to similar goods sold in the importing country.  The value of the imported goods for VAT purposes includes customs duty, anti-dumping duty and excise duty (excluding VAT), and certain transport, handling and insurance costs. Therefore taking the above example, the VAT of €2,300 that arises for the Irish business on the goods imported into Ireland from the UK becomes payable to Revenue in Ireland immediately on importation in say April 2019.  The Irish trader then claims an input credit of €2,300 in the March/April 2019 VAT return which is filed weeks later in May 2019 (assuming returns are filed bi-monthly).  In contrast to the intra-community acquisition scenario, the Irish trader in this situation has an upfront cost of €2,300 which it can’t claim as a deduction for several weeks. The postponed method  The introduction of the postponed method of VAT accounting will mean that the VAT is not due upfront and will be accounted for at the time the next VAT return is due i.e. in the same manner in which intra-community acquisitions are treated. Deferred payment account It should be noted that, currently, for imports from outside the EU into Ireland, most traders have a deferred payment account with Revenue which means that the amount of VAT that is due is not taken from the traders account until the 15th day of the month following importation.  However many traders that only trade with the UK or other EU countries may not have a deferred payment account with Revenue. Importing into the UK from the EU Reversing this example; a UK trader imports £10,000 worth of goods from Ireland in April 2019. Without the postponed method of accounting for VAT, UK VAT of £2,000 would arise on the import in April 2019 and any input credit due would then be accounted for in the next VAT return which would be due by 7 June 2019. With the postponed method, the VAT of £2,000 can be accounted for by 7 June 2019. Key dates Postponed method of VAT accounting will mean that VAT is not due until the next VAT return: In Ireland this is generally the 23rd day of the month following the end of the bi-monthly period In the UK, this is generally the 7th day of the second month following the end of the VAT period  Back to Brexit Basics – Series 21 After a short break, this series is back with a look in more detail at the simplified customs procedures the HMRC propose to introduce in the event of a no-deal Brexit. Transitional Simplified Procedures (TSP) HMRC will introduce simplified customs procedures for 145,000 UK importers who trade with the EU in the event of a no-deal Brexit to enable goods to move freely through the UK.  This will also give traders a chance to prepare to apply the same customs processes when trading with the EU that already apply when trading with the rest of the world.  These simplified procedures will be in place for at least a year from 29 March 2019. HMRC have written to affected traders telling them about the Transitional Simplified Procedures (TSP) for customs which will make importing easier for a year after Brexit in the event of a no-deal. The TSP will mean that traders can import goods into the UK and defer making a full customs declaration and paying customs duties.  Specific information must be included on the declaration including: The date and time the goods arrived in the UK A description of the goods and the commodity code The quantity imported Purchase and (if available) sales invoice numbers The customs value of the goods The serial numbers (if appropriate) Delivery details Supplier details After the goods have been imported: a supplementary declaration must be sent by the importer by the fourth working day of the month following the arrival of the goods into the UK HMRC will take a direct debit on the 15th day of the month after the goods arrive in the UK if there are duties or taxes to pay Businesses must register for TSP to be able to transport goods from the EU into the UK without having to make full customs declarations at the border. Traders are able to postpone paying import duties for a month after import.  Import VAT will be due on the next VAT return rather than when the goods arrive at the UK border. Businesses can register for TSP from 7 February 2019 if they are established in the UK, import goods from the EU and have an EORI number.  The policy will be reviewed three to six months after it is introduced on 29 March 2019 to see how it is working. Businesses will be given at least a 12 month notice period before withdrawing the TSP.  After that time period has elapsed businesses must apply the usual customs processes to imports from the EU.  It’s envisaged by the UK government that the 12 month notice period will give business a chance to prepare. More information on the TSP can be found on Gov.uk and you can also read a copy of the letter sent to traders. Read all our Brexit updates on our Brexit web centre.  

Ulster Society and Danske Bank announce partnership

Wednesday February 13th, 2019 10:00:55 AM
The professional body for Chartered Accountants in Northern Ireland has announced a renewed partnership with Danske Bank. The partnership will see Danske Bank supporting a series of Chartered Accountants Ulster Society’s key events during the year, including its premier event, the Annual Dinner in March. The partnership will also see Danske Bank continue its sponsorship of the Ulster Society’s overseas Annual Conference, taking place in Madrid later this year. Danske Bank support for this event stretches back to 2001, covering sixteen conferences in cities such as New York, Lisbon, Chicago, Munich, Toronto, Copenhagen, Barcelona, Boston and Amsterdam.   The Ulster Society is a district society of Chartered Accountants Ireland, the largest professional body of accountants on the island of Ireland. It currently represents 4,600 members across Northern Ireland. Danske Bank is the largest of Northern Ireland’s local banks, with 42 branches and around 1,400 staff. The new agreement will see the two organisations partnering over the next two years. Zara Duffy, Head of Chartered Accountants Northern Ireland said: “Danske Bank is a key partner for Chartered Accountants Ulster Society, and we are delighted to extend that relationship. “Danske Bank brings a great deal of experience and insight which our members greatly appreciate, whether they work in practice, in industry or the voluntary sector. This partnership has allowed us to improve the profile and member experience at some of our most prestigious events and to draw on the expertise of key personnel at a challenging time for the local business sector.” Shaun McAnee, Managing Director of Corporate & Business Banking at Danske Bank added: “We are proud of our longstanding relationship with Chartered Accountants Ulster Society, and it is more relevant than ever. “We are seeing evidence of disruption in every sector of the economy, including financial services, and are preparing for a post-Brexit world.  By combining the expertise within Danske with that of our accountancy colleagues, together we can help to ensure NI businesses rise to the challenges and opportunities that lie ahead, and help drive the Northern Ireland economy forward.” Pictured at the launch of the partnership are Niall Harkin, Chairman, Chartered Accountants Ulster Society; Zara Duffy, Head of Chartered Accountants Northern Ireland; and Shaun McAnee, Managing Director of Corporate & Business Banking at Danske Bank.

Food for thought: what are the best foods for effective study?

Monday February 11th, 2019 11:49:04 AM
Food for thought: what is the best brain food? If you have studied part-time you may be familiar with the sight of a well-meaning spouse/child/housemate/sibling approach with a cup of coffee and Jammie Dodger. There is nothing better to see while you kick a printer or mutter "where the f is that note?" The kind donor will return to watch the rest of Match of the Day but you'll remember the kindness and pick-me-up just when you needed it. Efficient study means a well-fueled brain, so what we eat directly helps with how we take on and retain information. The food we eat can give us the energy kick we need at just the right time. Note: energy kick, not sugar kick. Step away from the Hob Nobs, folks. Snacks - what's best? Part-time study can equal late-night study. If you want to legally give yourself a blast of energy and fire up your brain, it can be simple and tasty. It's very important to know what not to eat. And sorry, it is not a plateful of biscuits. Sugars and carb-heavy foods are generally not great for late-night study sessions. You will get a fairly immediate boost which might feel great at the time but it's short-lived and has a negative side-effect: the slump. If you were setting out to do a three-hour stint, you may find yourself with a great 20 minutes followed by a wandering mind and lethargy. Really not worth it. The better options It's fairly predictable what are the better choices Greens: broccoli, cabbage and spinach are particularly good. They have been linked with decreasing memory loss. Have you tried raw sugar snaps? They're a nice crunchy snack and way better than crisps Grains: Wholegrain cereals, breads, brown pasta and brown rice are great for slow release energy to keep your brain alert for a longer period Nuts: high energy and easy snacks, high in good fats and iron. You'll get the boost of a biscuit without the sugar and slump Fish: the salmon of knowledge parable has truth in it. Oily fish is rich in Omega 3 which is linked with higher and better brain activity. Salmon, sardines, trout, mackerel, herring and kippers are all good Blueberries: superfood salads with blueberries are all the rage and for good reason. They are great antioxidants, improving blood flow to the brain which boosts neural activity Coffee: careful now. Don't hook up a drip of the stuff - go sparingly. Caffeine can give you a boost. A cup or two a day can give a great wake up but don't exceed this. You will get jittery, lose concentration and may impact on sleep which is critical - don't sabotage your sleep under any circumstances. Try to avoid caffeinated drinks after 4pm. Move onto water then and avoid sugary drinks at all times. Try changing meals and snacks to some of these and you should see a change in your productivity. A few final tips Ditch the junk: Be ruthless, throw it out. Don't look back and don't make excuses. If you know it's there it will just torment you. Snack wisely: Yoghurts, nuts, cereals are better than higher calorie, higher sugar hits. Soup is also good as it gives you the extra satisfaction of hot food. Eating protein with your snacks and meals will leave you feeling fuller for longer. Don't skip meals: Try to eat well and regularly throughout the day. If you skip a meal you'll be ravenous and eat the first thing in sight which may be fast food or junk food. Fluids: Drink plenty of water: What you think might be hunger might actually be thirst and dehydration. Your body and brain will thank you for plenty of water throughout the day. Avoid sugary drinks - they are diuretics which will only dehydrate you more. Have breakfast: It can't be overstated how important it is to start your day with a proper breakfast. Again, avoid the sugary ones - these high sugar, processed foods really won't keep you going. Try wholegrain toast, eggs, fruit, porridge, sugar free cereals and muesli. They'll be better for you and leave you feeling fuller for longer. Walk on your breaks: Getting up and walking around for even a couple of minutes or having a stretch will get the oxygen flowing and your metabolism going. Aim for a little break every hour. Reduce alcohol to reduce dehydration and help with your overall mood and well being. Relax: Find an activity you enjoy. One of the best systems to shut down when you are under stress is digestion and immunity. By reducing your overall stress you not only create a better mental outlook, you will also help your body to perform all its functions to the optimum. Tuck in and good luck! Amy Dawson

Reminder: 2018 P35 filing deadline

Monday February 11th, 2019 11:40:04 AM
A reminder to readers that the annual P35 return for 2018 is due by 15 February 2019 for paper returns and 23 February 2019 if a return is filed using ROS.  2018 is the final year for which a P35 is required as since 1 January 2019, the P35 was abolished in line with PAYE Modernisation.   More details of your filing obligations can be found on Revenue.ie.

PAYE Modernisation – one month in

Monday February 11th, 2019 11:33:01 AM
Last Friday Revenue issued a statement to say that during the first month of go live, Revenue received payroll information for over 2.4 million employees, representing 90 percent of employees registered with Revenue.  While this is wondrous in terms of tax administration, there is still no real time access for employees, which had been promised as a benefit of PAYE Modernisation.  For many employers the new system has merely added to workload and costs with little apparent benefit. Revenue have said that they are writing to 65,000 employers, advising them to check their January ‘Nil’ statement, and if any amendments are required to make these before 14 February, to address the 10 percent of employees for whom Revenue did not receive payroll information.  Statements reflecting the January payroll information issued on 5 February.  Employers have until this coming Thursday (14 February) to make any amendments/correct errors to the payroll submissions, after which it will form the statutory return. If the payroll details are correct no action is necessary and the details will be deemed to be the statutory monthly return on 14 February. This will be the process each month. Revenue have also said that they intend to make real time reporting available to employees shortly. We will keep you updated as to when employees can expect to receive this access. Chartered Accountants Ireland under the auspices of the CCAB-I are in discussion with Revenue regarding the terms of a self-correction mechanism under the new real-time PAYE system.  The CCAB-I are arguing the case that a taxpayer should be afforded every opportunity in terms of the time frame for self-correction under the real-time PAYE system given the increased workload of employers brought about by the new system.  For PAYE queries, Revenue have advised to contact the National Employer Helpline at 01-7383638.  Stay informed with up-to-date information on PAYE Modernisation on our website.

EU wants more reform from countries to avoid the blacklist of non-cooperative jurisdictions

Monday February 11th, 2019 11:31:36 AM
The EU has informed the governments of six countries that recent changes made to their laws do not go far enough to avoid the EU’s blacklist of non-cooperative tax jurisdictions. The letters issued from the EU’s Code of Conduct Group to Barbados, Belize, Curaçao, Mauritius, Saint Lucia and Seychelles on 1 February 2019.  In order to avoid the blacklist, the letters ask for a commitment to end the harmful practices identified and comply with the blacklist criteria by 31 December 2019, with no grandfathering provisions. Each of the six countries appears in the blacklist’s Annex II, which sets out a watch-list of countries with harmful tax regimes who have committed to abolish or amend their regimes in line with EU standards. The first ever EU list of non-cooperative tax jurisdictions was agreed by Member States on 5 December 2017. This list is part of the EU's work to fight tax evasion and avoidance and aims to create a stronger deterrent for countries that consistently refuse to play fair on tax matters

In the media - 11 February 2019

Monday February 11th, 2019 11:20:05 AM
In his regular column in the Sunday Business Post, Brian Keegan, Director of Public Policy & Taxation discusses how political resistance is gathering over the way the UK Revenue Authorities are tacking one particular tax avoidance scheme.

Form P11D guidance

Monday February 11th, 2019 11:19:32 AM
Revenue’s guidance on Form P11D has been updated to remove "preferential loans which remain outstanding in favour of the employee after the termination of his or her employment" from the list of particulars to be included on the form.  The Form P11D is a form which Revenue may issue to an employer requiring them to provide particulars of benefits received by all employees in receipt of emoluments (inclusive of benefits) of €1,905 or greater in a year of assessment. Read Revenue’s eBrief.

Commission’s proposal to change tax voting system would reduce Member States’ sovereignty says Pascal Donohoe

Monday February 11th, 2019 11:19:05 AM
Last week, Minister Pascal Donohoe in his opening statement to the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach addressed the European Commission’s road map which outlines a proposal to change the unanimous system of voting on tax policy to a qualified majority system (QMV).  The Minister said that he does not see the “need for, or merits of”, any proposals to move away from the requirement of unanimity.  And that any move of voting method would reduce Member States’ sovereignty.  Last month, Chartered Accountants Ireland under the auspices of the CCAB-I provided feedback to this road map. The CCAB-I’s submission says that the QMV system would benefit large Member States but would put small Member States like Ireland at a distinct disadvantage.

Non-filer tax return letters from Revenue

Monday February 11th, 2019 11:18:40 AM
Approximately 45,000 “non-filer letters” are issuing from Revenue to business taxpayers who did not return a 2017 Form 11.  Non-filer letters for self-assessed taxpayers with passive income will issue in the next 3 to 4 weeks.   Another 25,000 non-filer letters will issue in the near future to corporate taxpayers who have failed in Revenue’s view to fulfil their compliance obligations in 2018. Revenue advised Chartered Accountants Ireland that there is no need to contact Revenue on receipt of the letter if the taxpayer or their agent is in the process of filing their outstanding return.  Nevertheless members may wish to consider doing so, in the interests of good practice.

Chartered accountancy bodies’ campaign to delay VAT on imports after Brexit bears fruit

Monday February 11th, 2019 11:18:07 AM
As part of its no deal Brexit planning, the Irish government has announced plans to allow a delay in the payment of VAT by Irish traders on imports from the UK after Brexit.  This will mean that instead of paying VAT immediately on import, VAT will become due when the next VAT return is filed.  The UK has already declared similar plans to introduce this postponed method. Since the Brexit vote, the Institute and ICAS, the professional body for accountants in Scotland, launched a joint initiative calling on the Irish and UK governments to introduce this measure and are confident that it will go some way to alleviate the cash flow burden on businesses in Ireland and the UK post Brexit.  See our Brexit section below for a detailed description of the impact of these developments. Minister Donohoe told the Joint Committee on Finance, Public Expenditure and Reform that provisions will be made in the Brexit Omnibus Bill.  Read the Minister’s opening statement to the committee and the Government’s press release.

Making Tax Digital scheduled maintenance

Monday February 11th, 2019 11:16:03 AM
Last week HMRC advised that scheduled maintenance to the Making Tax Digital (“MTD”) for VAT system will be taking place from 5:30pm on Friday 8 February until 8:30am on Tuesday 12 February. Whilst most elements of the MTD VAT service are inaccessible during this maintenance period (such as new taxpayers joining) HMRC have now advised that existing MTD taxpayers will be able to make submissions through the service. Full details are available on Gov.uk. A revised version of the MTD for VAT Notice 700/22 is also now available which contains relatively minor changes.

HMRC’s latest Digital Update – January 2019

Monday February 11th, 2019 11:15:31 AM
Check out the latest Digital Update from HMRC and find out what’s happening with Making Tax Digital and cyber security.

Double tax treaties and agreements – update, 11 February 2019

Monday February 11th, 2019 11:14:56 AM
Read our update on recent developments in the area. The 2018 Double Taxation Agreements between the UK and Jersey,Guernsey and the Isle of Man have been published. The agreements were signed on 2 July 2018. On 19 December 2018 the new Jersey Treaty and Isle of Man Treaties entered into force. On 7 January 2019, the new Guernsey Treaty also entered into force The updated UK-Bermuda Tax Information Exchange Agreement has been published Tax treaties and related documents between the UK and Mauritius have been published Tax treaties and related documents between the UK and China have been published Tax treaties and related documents between the UK and Uzbekistan have been published Tax treaties and related documents between the UK and Japan have been published Tax treaties and related documents between the UK and Belgium have been published Tax treaties and related documents between the UK and the Netherlands have been published Tax treaties and related documents between the UK and Cyprus have been published The 2017 UK-Belarus Double Taxation Convention has been published. It was signed on 26 September 2017 and entered into force on 27 July 2018 Tax treaties and related documents between the UK and India have been published HMRC have published the ‘synthesised’ text of the Multilateral Instrument and the existing double tax treaty with Serbia and Slovenia Tax treaties and related documents between the UK and New Zealand have been published Tax treaties and related documents between the UK and Austria have been published Poland: tax treaties sets out tax treaties and related documents between the UK and Poland HMRC have published synthesised texts of the UK’s double tax treaties with the Slovak Republic and Lithuania The UK has signed a new Israel tax agreement to update the DTC with the country, offering reduced dividend tax rates for inward investors






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