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Last feed update: Sunday May 20th, 2018 03:14:22 PM

Ireland’s largest accountancy body elects new President

Friday May 18th, 2018 02:15:15 PM
New Chartered Accountants President says current political uncertainty puts jobs at stake Feargal McCormack has been elected President of Chartered Accountants Ireland at its 130th Annual General Meeting in Belfast. Addressing the Chartered Accountants Ireland AGM in Belfast today (18 May 2018), Mr McCormack highlighted the current political and economic uncertainty on the island of Ireland and expressed his view that delivering political stability is the vital factor in securing a positive economic future on the island. He said: “At present the uncertainty around Brexit and the lack of a functioning Northern Ireland Executive are very challenging. Put plainly, businesses are unlikely to make significant investment decisions in an uncertain environment. This uncertainty is putting jobs, economic growth and prosperity are at stake. “We must recognise that the one factor which will make the biggest contribution to the international competitiveness in Northern Ireland and on the island of Ireland is political stability. Stability should naturally incorporate an agreement on any Brexit arrangements going forward, given the evolution of the island economy and the land border between Northern Ireland and the Republic of Ireland. “We have recently acknowledged the 20th Anniversary of the Good Friday/ Belfast Agreement which attempted to draw a line under the past and to set a vision for the future based on partnership, equality and mutual respect. “Despite the best efforts of the Northern Ireland political parties and the British and Irish Governments, the reality is that the journey of implementation has been just a complex as Chairman of the peace negotiations, George Mitchell, envisaged they would be.  "Huge progress has been made, not only in terms of lives saved, but the economic and quality of life on the island has been transformed. Therefore, we must support and encourage our politicians to grasp the current opportunity to deliver political stability for the island of Ireland. We owe it to our, and to future generations, to ensure that political stability and mutual understanding are the norm. “Looking to the future, I am confident that Chartered Accountants Ireland will continue to be a progressive and outward-looking organisation, dynamically engaged with its many constituencies and driven by a vision, not just for itself, but for the community it serves.” Addressing his own objectives for his presidential year, Mr McCormack intimated that his overarching theme would be caring and people focused - in reality this would mean caring for members, staff, trainee students and the community. Mr McCormack, who takes over as President from Shauna Greely, is Managing Director of PKF-FPM, a Chartered Accountancy and business consultancy practice with offices in Newry, Belfast, Dungannon, Dundalk, Mallusk and Balbriggan, Dublin. A lifelong resident of Warrenpoint, Co. Down, Mr McCormack becomes the first Northern President of Chartered Accountants Ireland to come from outside of Belfast. Chartered Accountants Ireland represents 26,500 Chartered Accountants throughout the island of Ireland and in 93 countries around the globe. It is the largest, longest established and fastest growing professional accountancy body in Ireland. At today’s AGM, Conall O’Halloran, Partner and Head of Audit Practice with KPMG, based in Dublin was elected Deputy President of Chartered Accountants Ireland. Paul Henry, Director at Osborne King, Belfast was elected Vice-President. Ends Reference: Garry Webb, Communications Executive, Chartered Accountants Ireland T: +44 2890 435869 Note for Editors: Chartered Accountants Ireland is Ireland's largest and longest established professional body of accountants founded in 1888. The Institute currently represents 26,500 members around the world. Pictures of Chartered Accountants Ireland’s new officer group will be released to picture desks today, Friday 18 May from Presseye Photography.

Winning the spoils

Friday May 18th, 2018 11:44:43 AM
The countdown is on to the next meeting of the European Council scheduled for 29 June 2018 with progressions on Brexit high on the agenda. However, this week our Taoiseach Leo Varadkar has, yet again, made his growing concerns clear, calling for substantial progress before the June meeting if any agreement will be reached by the October deadline. With the political trade deal still very much out of grasp and Theresa May admitting the withdrawal bill could stall until autumn, Irish businesses need to future-proof their organisations and operate on the assumption that a trade deal will not be made.  Silver-linings However, the cloud of uncertainty cast by Brexit is not all grey. Silver-linings have emerged over the past few months. Most recently, the Thomson Reuters group have confirmed it is set to move its $300 billion dollar-a-day foreign exchange facility to Dublin from London. The group will transfer all existing client relationships, as well as fixed income call-outs and auctions, to its new Irish legal entity ahead of the Brexit date. Martin Shanahan, CEO of the IDA Ireland said, “Thomson Reuters’ choice of Ireland is very significant in terms of our ability to attract top international brands that have influence and reach. This provides IDA Ireland with another powerful calling card for new types of business within international financial services and points to Ireland’s attractiveness to international financial services business. Ireland has the right mix of regulation, skills, experience and office space to make us a very logical place for financial services to locate." Thomson Reuters are following in the footsteps of Bank of America, who have confirmed plans on moving its EU headquarters from London to Dublin between July and December this year. The move results in up to 125 British jobs relocating to Ireland ahead of Britain’s exit from the EU. Not only as a country are we winning the spoils of Brexit from a domestic perspective, it is positive to see that indigenous Irish businesses are being pro-active in trying to source alternative markets as a defence against Brexit. For Ireland, it is the agri-food sector that will be hit the hardest by Brexit. The news this week of a €50 million, three-year deal between the Irish ABP group and Asian restaurant chain Wowprime Corporation, demonstrates how Irish businesses are expanding their global footprint and diversifying their trade portfolios as an effective hedge against the Brexit. This deal is followed by an equally impressive and lucrative deal for the Kepak Group into the Chinese market. Ireland's competitive advantageHowever, while these stories are positive, we need to remain vigilant. Apple's recent decision not to proceed with an €850 million data centre in Athenry over delays in planning highlights our need to continually improve our competitiveness and responsiveness. With Budget season approaching, it is important the Government introduces the correct measures to further prepare Ireland’s economy for the significant challenges arising in the context of Brexit. Retaining a competitive advantage in attracting inward investment is more important than ever and Ireland's pro-business environment must be emphasised in the coming months as Brexit uncertainty remains. Mollie O'Donnell is a Tax Manager in Mazars.

Learning from others.

Friday May 18th, 2018 11:39:11 AM
Meeting student members who are in the final stages of their contract can be enlightening as it gives us both an opportunity to sense check what’s happening in work versus what’s needed post-contract. A snapshot of some of the things I hear and see that perhaps might be an obstacle to a successful experience outside of contract includes: Underestimating the experience in contract whether that’s in practice, audit, industry etc. Your Chartered Accountants diary is a valuable tool to capturing your successes – so keep it up to date to avoid forgetting unique experiences and assignments.   Overestimating the experience in contract – yes that contradicts the above point but what is also important is to take the experience for what it is. You might have had the opportunity to get senior exposure on exciting projects but be mindful that some basic experience might have been overlooked. Walk before you can run.   Forgetting the bigger picture – often clients comment that members going for interview say they are commercially savvy but in fact rely on a very limited flow of information. If you really want to be taken seriously in business, read all you can and attend events outside of your immediate circle (on your own if you need to) but develop a passion for all things business and commerce and don’t rely purely on what’s happening in work.   Start to develop a level of self-awareness for what you like and what you are good at. Instead of automatically reverting to the ‘I don’t know what I want to do’ response, be mindful of the experiences you’ve had and ask yourself ‘have I enjoyed that role, that sector, that company, that culture, that size team etc.’ and find your own answers.   Look before you leap! Very often I meet with newly qualified members who on one hand tell me they have absolutely no idea what they want to do but in the same breath tell me they’ve interviewed but haven’t been successful? I think that says something – more time researching, engaging, questioning = less time interviewing.   High expectations in salary. A worrying trend is high salary expectations for first roles out of contract, be careful not to price yourself or the profession out of exciting career enhancing roles for the sake of a small difference in pay as you start out on your career.   Speed (appears to be) of the essence. You wouldn’t be expected to have your pension plan in place as you leave your contract and equally neither is reaching financial controller level within two to three years. It could be considered admirable but also perhaps worrying.  By having such a focused goal in such a short period of time you could potentially miss out on on vital skills, exposure, opportunities, secondments and ad-hoc projects as well as invaluable life experience. Often the longer route is beneficial to building a complete set of career skills. As always the Career Development and Recruitment Service is on-hand to help you at this crucial time of your career and life by providing impartial, supportive, confidential advice and guidance.  Contact us at careers@charteredaccountants.ie to see how we can be your career partner throughout your career. 

Wearing the right hat to avoid board dysfunction

Friday May 18th, 2018 09:13:07 AM
Given that Ireland's first governance code was only developed in 2008, we are still getting to grips with governance and what it means for boards and directors in Ireland. We have a lot to learn. I wonder how many people say yes to a board appointment without thinking about the role, responsibilities and skills they need to know to carry out their new job. Once on a board, a new member can be overwhelmed by the breadth of knowledge that is required. This could include the Companies Act 2014, tax law, finance, health and safety, the relevant code (if there is one), on top of understanding how a board works. The key challenge is understanding how one, as a new board member, can uphold the responsibilities of board membership, such as voicing opinions and contributing to the group. Good induction can help and should include an induction pack that contains not only the necessarily documents and an explanation of the organisation's functions and services, but also an insight into the corporate culture of the organisation, as well as the roles and responsibilities of board members. This can help a new board member put on the correct hat as soon as they join, and avoid dysfunction later on. Board responsibility Regardless of what introduction into the organisation a new board member has, the early days of board membership can be intimidating. It may take some time before a new board member is comfortable contributing on a spontaneous basis and, in the process, taking a chance at inadvertently upsetting the status quo. However, it’s important to remember you still have the same collective responsibilities as all the other board members, which includes voicing your opinions and only representing your board while in that boardroom. Many directors do not know that the board is collectively responsible for all its decisions. They should know that even if a member disagrees with a particular decision where the majority is in favour, they must respect the decision and support it outside the boardroom. This can be hard for some board members if they are there are in a representative capacity, such as for a VC fund or for a province of a sports organisation where they sit on the national board. They have multiple hats and sometimes it's hard for those people to remember which one they have to be wearing. All members of a board must remember that a director can only wear one hat in the boardroom and that is the hat of the board they sit on. If they are there in a representative or other capacity, they need to leave that hat at the door. If they don’t, the whole board will become dysfunctional, unknowingly catering to the interest of another organisation before looking out for the best interests of their own. Board members elected in a representative capacity will find this the most challenging, but most important, aspect of their membership. David W Duffy – is the founder of The Governance Company and author of A Practical Guide for Company Directors published by Chartered Accountants Ireland.

Series 10 - Back to Brexit Basics – the customs options

Thursday May 17th, 2018 02:11:10 PM
Last week, in Series 9 of Back to Brexit Basics, we looked at equivalence and what this process entails.  This week we look in more detail at the three customs options that are currently on the table in the Brexit debate.  The customs options  The UK government outlined two potential options to solving the customs problem in a policy paper prepared last year.  These options were debated by the UK government this week and a third option has now emerged as a possibility. All three options need to be considered by the EU and limited detail is available on the mechanics of each. A customs partnership This option would involve the UK acting on behalf of the EU when imports arrive into the UK from the rest of the world and are then transported on to the EU. In practice, this means that the UK would potentially have to apply the EU’s tariffs that arise on imports that arrive into the UK that are ultimately destined for the EU. For example if electrical parts or machinery arrive at a UK port from the US and are then shipped on to Rotterdam, customs officials in the UK would collect the customs duty due and pay it over to the EU. Some suggestions put forward by the UK government on how to manage this system include using an IT system to track goods to see where they ultimately end up and working out the correct tariffs.  Alternatively importers could pay the higher EU or UK tariff and then claim a refund if necessary once the goods reached their final destination. This system is unprecedented and untested and the EU has been reported as being sceptical of it.  One advantage of the system is that it could still allow the UK to negotiate its own trade deals around the world.  The max-fac option A second proposal known as maximum facilitation or “max-fac” seeks to create as frictionless a border as possible rather than remove the border entirely. The UK has said that this type of border would use new technologies that could remove the need for physical customs checks.   Schemes which can fast-track customs procedures (such as the authorised economic operators scheme) could also be used to make trade with the UK and the EU easier.  This type of border could require the EU to implement equivalent arrangements on its borders. Special arrangements may also need to be made for Northern Ireland if this option was to be considered in order to avoid a hard border. The EU has said that it is open to examine any option that would facilitate freer trade but some of the technology needed to operate such a border has not been developed yet. The third proposal A further option put forward by Theresa May in recent days looks at the possibility of the UK in its entirety remaining in line with the EU Customs Union for several years. Paragraph 49 of the draft Withdrawal Agreement reached in December 2017 between the EU and the UK states that in the absence of any other way of avoiding a hard border, the UK would, "maintain full alignment with those rules of the internal market and customs union which support north-south cooperation, the all-island economy and the Good Friday Agreement". While the EU have said that this provision could see Northern Ireland still remain within the EU Single Market and Customs Union, the UK is understood to be examining the possibility of the entire UK remaining aligned with the EU Custom Union and not just Northern Ireland. If this worked, it could mean no customs checks on the Irish Sea, or on the border between Northern Ireland and Ireland.  This temporary solution could solve the issue of the hard border for now. Read all of our Brexit updates and Back to Brexit Basics on the dedicated Brexit section of our website.  

Brexit Bites, 18 May 2018

Thursday May 17th, 2018 02:10:09 PM
The UK government have announced that it will release its “most significant publication” in the form of a White Paper which will set out its precise ambitions for its future relationship with the EU.  Also next in our series of getting Back to Brexit Basics, we look at what’s known so far about possible solutions to the customs conundrum debated in the UK this week.  White Paper on its way The UK government announced this week that it will be releasing a White Paper ahead of the key EU summit in June which will set out the UK’s precise ambitions for its future relationship with the EU.   In what the UK terms as the “most significant publication on the EU”, it’s expected the 100 page report will cover the future security relationship, aviation, fisheries and the financial services sector. The highly debated future customs relationship which has left the UK cabinet divided is also expected to feature and it’s hoped that it will include a plan that shows how a hard border on the island of Ireland can be avoided. A third solution UK Prime Minister Theresa May’s inner cabinet remain in disagreement over how the future customs relationship between the EU and UK will work. One proposal on the table, reportedly favoured by the Prime Minister is the customs partnership model in which the UK would collect customs duties on behalf of the EU.   A second proposal known as the maximum facilitation or “max fac” option seeks to use technology to keep the EU borders as frictionless as possible.  The EU has concerns about both options. A third option was thrown into the mix this week where discussions took place on keeping the UK tied to the EU customs rules beyond the transitional date of 31 December 2020 and could stretch for some years after Brexit.  This would solve the issue of avoiding a hard border on the island of Ireland but it would mean that the whole of the UKwould be aligned with EU rules. This idea is an extension of the EU’s proposal of the backstop which would keep Northern Ireland aligned with the EU’s customs union and Single Market. The UK has been seeking an alternative to this arrangement as it would effectively displace Northern Ireland from the rest of the UK. The EU and Ireland are hoping that some form of solution is proposed in advance of June’s EU Summit with October being the deadline for ultimate sign off on the future relationship.    

Institute participates in debate on Corporation Tax

Thursday May 17th, 2018 02:06:57 PM
Chartered Accountants Ireland participated in Brussels this week in a public debate on the future of Corporation Tax for Ireland and Europe, organised by the IIEA Brussels Branch which is currently chaired by Ciaran Spillane FCA.  Director of Public Policy and Taxation Dr Brian Keegan represented the Institute and his opening remarks which challenge recent EU corporation tax proposals are available here.  Pictured are Mr Brian Hayes, MEP, Dr Paul Tang MEP, Dr Brian Keegan, and Mr Ciaran Spillane, Chairman IIEA Brussels

Significant and Imminent change to the investment business activities - IIA

Thursday May 17th, 2018 12:39:14 PM
Important Information for firms holding Investment Business Authorisation under the Investment Intermediaries Act, 1995 (the IIA) The transposition by Ireland of the EU Insurance Distribution Directive[1] (the IDD) later this year is likely to have significant implications for those firms authorised by the Institute under the IIA, including removing the need for certain firms to hold IIA authorisation. As part of the transposition of the IDD, it is anticipated that ‘insurance policies’ will be removed from the scope of the IIA and therefore from the scope of the Institute’s Investment Business Regulations. This is expected to apply from 1 October 2018. When the IDD Regulations take effect, firms which are involved actively in advising on or arranging insurance products, including insurance-based life and pension products, must be registered for such activities directly by the Central Bank of Ireland. Firms should note that where a firm introduces or refers a client to a third party for the purposes of arranging the purchase of an insurance product and that firm has no further role in the transaction, that firm will not be required to be registered with the Central Bank and will continue to be authorised by the Institute until 1 October 2018.  This is because the act of introduction or referral in respect of an insurance product does not fall within the definition of 'insurance distribution' and is not subject to the IDD. Furthermore, the IDD does not apply to persons with another professional activity, such as accountants, who provide advice on insurance cover on an incidental basis in the course of that other professional activity, nor to the mere provision of information of a general nature on insurance products, provided the purpose of that activity is not to help the customer conclude or fulfil an insurance contract, e.g., preparing calculations of the maximum amount a client might contribute to a pension is not, of itself an authorisable activity. So if a firm currently holds IIA authorisation from the Institute solely because it makes referrals to a third party for advice on or for the purpose of arranging  insurance-based products and does not conduct any other type of investment business, then that firm is likely to no longer require investment business authorisation from 1 October 2018.  However, this will be a matter for the firm to decide. The scope of the IDD is confined to insurance products only.  Firms that currently hold investment business authorisation and make referrals to third parties in respect of other types of investments or for investment advice (e.g., to a stockbroker), or are active themselves in carrying on investment business will continue to require authorisation – either from the Institute or directly from the Central Bank in respect of such IIA activities. What should authorised firms do now? Each firm currently holding investment business authorisation from the Institute should review the activities it currently undertakes.  If those activities include advising on or arranging insurance products or are likely to do so in the future, then the firm will be required to register with the Central Bank in respect of such activities in accordance with the current Insurance Mediation Regulations (IMR) or the IDD regulations. If the firm carries out the following activities as provided for in the IDD: advising on, proposing, or carrying out other work preparatory to the conclusion of contracts of insurance, or concluding such contracts, or of assisting in the administration and performance of such contracts, in particular in the event of a claim, including the provision of information concerning one or more insurance contracts in accordance with criteria selected by customers through a website or other media and the compilation of an insurance product ranking list, including price and product comparison, or a discount on the price of an insurance contract, when the customer is able to directly or indirectly conclude an insurance contract using a website or other media; then you need to notify the Central Bank of Ireland in order to begin the process of receiving a registration under the IMR with the Central Bank. Please contact RIAuthorisations@CentralBank.ie no later than close of business on Friday, 25th May 2018.   Any queries on the Central Bank application process should also be sent to RIAuthorisations@CentralBank.ie.    Once a firm has been registered under the IMR, it will continue to be registered once the IDD is implemented. If the firm’s only investment business activity is referral to a third party for advice on or for the purpose of arranging insurance/insurance based pensions, and the firm has no further involvement, such activity will not require investment business authorisation, either from the Institute or from the Central Bank from 1 October 2018.    [1] Directive (EU) 2016/97 of the European Parliament and of the Council

Five reasons to be fearful for the bond market

Thursday May 17th, 2018 11:35:44 AM
Traditional fixed income markets face a number of challenges over the coming year. With the potential returns from the highest quality bonds in the developed world and the fact a competitor asset class appears - again - to be offering superior returns, there are a few reasons to be wary of the bond market. Inflation and interest rates starting to rise Inflation is creeping higher and higher. For the last decade, deflation or disinflation was the dominant theme. Now, as the economic recovery has spread to so many core countries, energy and metal prices are lifting again, and the numerous pools of spare skilled labour across the world are reducing in number and size. Each small increase in inflation expectation causes a bigger increase in bond yields and falls in bond prices. Buying inflation-linked bonds, designed to protect from rising levels of inflation, may not be the answer as prices are also affected by supply/demand factors and the level of nominal yields. What one gains on predicting rising inflation might be smaller than the losses from rising conventional yields. Also, policy rates are starting to move up, pulling yields higher across much of the developed world, led by North America. After years of interest cuts, most central banks have reached a nadir. Bond markets will lose the tailwind that they have enjoyed, off and on, for over 30 years. An end to QE The extraordinary purchases that central banks adopted are slowing, have stopped or are being reversed. US Treasuries have sold off, partly due to one of the biggest buyers turning into a seller. The prospect of reduced buying by the European Central Bank (ECB) has driven European government bond yields higher; the ECB’s quantitative easing (QE) programme was huge in respect to net bond issuance, and vast relative to the size of the US QE plan in that regard. To add to that, the level of yields for high quality bonds is not at all high. Many trillions worth of bonds still offer negative yields to maturity. Even with positive yields, the quantum is rarely high compared to the last five decades. There is little or no margin of safety in these assets. Given that bonds have a terminal price, holding bonds with a negative yield to maturity is a guarantee to lose money in nominal terms, to lose more if there is inflation and lose yet more if there is a default. One common answer to all four of the above concerns is to buy short bonds (go short duration, in market speak) or buy funds that do short duration. Shorting bonds (selling bonds with the right to buy them back in the future) whose yield is negative might be a far cheaper exercise than ever before and, where yield curves are flat, there is little extra cost. The equities challenge Finally, there is the number one competitor to bonds: equities. 2017 saw equities beat bonds again, by nearly 20% in total return terms in the US, and for the sixth year in a row. German bonds were the laggard, starting as the most unattractive yields and finishing there too; yet the DAX made over 12% in local terms. In principal emerging markets, buoyed by generally stronger currencies, many bond sectors did well but equities mostly did better. The growth outlook for the next few quarters is remarkable, and is sufficiently robust to help lift corporate earnings in most industries despite rising wages and raw material costs. Dividend yields still look great compared with bond yields from the same quality company. Tim Haywood is an Investment Director Business-Unit Head for fixed income at GAM Investments. This article was first published on www.thefmreport.ie This article is the personal opinion of the author.

Opportunity to contribute to the European assessment of IFRS 17

Thursday May 17th, 2018 11:22:49 AM
The European Financial Reporting Advisory Group (EFRAG) has commissioned research on the expected economic impact of IFRS 17 Insurance Contracts and is seeking views from a wide range of interested parties. The data is collected through a web-based questionnaire. Full anonymity is guaranteed and all answers will be analysed at an aggregated level. The questionnaire can be found on EFRAG’s website and will close on Thursday 31 May 2018. IFRS 17 was issued to replace the interim Standard IFRS 4 Insurance Contracts. EFRAG provides advice to the European Commission on the endorsement of new IFRSs based on evidence it gathers from European constituents. The Financial Reporting Council encourages UK constituents to respond to this important research. Source: Financial Reporting Council.

Five things you need to know about tax, 18 May 2018

Thursday May 17th, 2018 11:22:24 AM
Highlights this week include Revenue issue letters for PAYE compliance checks, the Institute responds to the Local Property Tax consultation and the number of countries participating in BEPS grows to 115.          Ireland Revenue have begun issuing letters to certain employers notifying them that they have been selected for a Revenue PAYE compliance check.  You can read more on this story on our website and a copy of the letter can be found here The CCAB-I responded to the Department of Finance consultation on Local Property Tax (LPT) and called for a tax deduction for LPT in the calculation of rental income in light of the fact that LPT is a direct cost for landlords providing residential rental property.   Read the submission on our website   UK The Government has responded to the Taylor review into modern working practices Read our update on the latest developments in tax conventions and tax information exchange agreements   International Bahrain and Saint Lucia are the latest jurisdictions to join the Inclusive Framework on Base Erosion and Profit Shifting (BEPS).This brings the number of countries participating in the framework to 115      

Survey on HMRC's performance – have your say

Thursday May 17th, 2018 11:21:21 AM
Earlier this month, HMRC confirmed that it has processed 10 million transactions using robots since 2015, a development which the department says “has improved efficiency and customer experience.” But what is your experience of HMRC service levels?  Earlier this week we launched a survey of members to find out their recent experiences of HMRC services. The survey should take no more than 10 minutes to complete and will be available until 1pm on Tuesday 22 May. Access the survey here. We intend to use the results of this survey to identify major areas of concern and any areas where there have been improvements.  The results will be fed back to HMRC and published on our website. HMRC also recently published the outcome of research into customer experience of the acceptability of the time taken to reach an end result. According to the Executive Summary of that report “Service failure was a common experience among those interviewed. As a result the service they received was not representative of the normal service offered by HMRC.  Customers became dissatisfied with the journey length as the query progressed, encountering challenges in reaching a resolution, which ultimately extended the length of the transaction beyond what had been expected

IESBA consults on professional scpeticism

Thursday May 17th, 2018 11:17:17 AM
The International Ethics Standards Board for Accountants (IESBA) seeks public comment by 15 August 2018 on its consultation paper, Professional Skepticism – Meeting Public Expectations. In response to regulatory and other stakeholder feedback on the topic, the paper explores: The behavioral characteristics comprised in professional skepticism; Whether all professional accountants should apply these behavioral characteristics; and Whether the International Code of Ethics for Professional Accountants (including International Independence Standards) should be further developed to address behaviors associated with the exercise of appropriate professional skepticism. Through this initiative, IESBA also aims to reinforce the effective exercise of professional skepticism by auditors. The consultation paper was developed following close coordination with the International Auditing and Assurance Standards Board (IAASB) and the International Accounting Education Standards Board (IAESB), and with advice from the IESBA Consultative Advisory Group. To access the consultation paper and submit a comment by 15 August 2018, click here. Source: The International Ethics Standards Board for Accountants.

Register of Beneficial Owners

Thursday May 17th, 2018 11:00:56 AM
By Gráinne Howard, Director of Corporate Governance & Compliance at Baker Tilly Hughes Blake. The 4th EU Anti-Money Laundering Directive (4AMLD) requires all EU member states to put into national law provisions around beneficial ownership information for corporate and legal entities. There are two stages to this process:   As of 15 November 2016, ALL corporate and legal entities must hold adequate, accurate and current information on their beneficial owner(s) in their own Register of Beneficial Ownership; and Corporate and legal entities will in due course be required to file this information with a central beneficial ownership register. The central register is in the process of being established and further information on this is stated below. Companies Registration Office Announcement The Companies Registration Office (CRO) has recently advised that the Department of Finance are expected to make a Statutory Instrument in the coming months, assigning responsibility to the CRO for the establishment and maintenance of a Register of Beneficial Owners (RBO) for each company. The details of each beneficial owner will be filed via a new on-line portal. Each beneficial owner must be a natural person and the information that must be filed with the CRO will include the following: Forename and surname; Date of birth; Nationality; Residential address; A statement of the nature of the interest held by each beneficial owner; A statement of the extent of the interest held by each beneficial owner; The date on which each individual was entered in the company's own register as a beneficial owner of the corporate entity; The date on which each former beneficial owner ceased to be such an owner; and If no natural persons are identified as beneficial owners, there shall be entered in the register the names of the natural person(s) who hold the position(s) of senior managing official(s) of each company with a significant ownership interest. While the information regarding filing at the CRO is subject to change until such time as the Statutory Instrument is passed, the creation and maintenance of an internal RBO by a company has been in force since 15 November 2016. It is a criminal offence not to comply with the regulations. A relevant entity which fails to comply will be liable on summary conviction to a fine. Benefits of compliance Where a company has an up-to-date RBO, the directors will be well positioned to make the relevant filings at the CRO in a timely manner when the requirement comes into force, as well as ensuring the company's compliance with these regulations. Source: Baker Tilly Hughes Blake.  

Corporate insolvencies down 14%

Thursday May 17th, 2018 10:50:51 AM
There were 188 corporate insolvencies in Q1 2018 according to the latest insolvency statistics published by Deloitte. When compared with Q1 2017 (219), this represents a decrease of 14% and is in line with the average rate of decrease observed over the last five years. The 188 corporate insolvencies are broken down as follows: Creditors' voluntary liquidations accounted for the majority, with 118 recorded in the period (59%). In the comparable period in 2017, creditors' voluntary liquidations accounted for 114 of the appointments recorded; 54 receiverships were recorded (27%), compared with 86 in Q1 2017. This mix of insolvencies is typical of prior periods; There were 13 court liquidator appointments, up six from Q1 2017. Of these 13 appointments, petitions were brought by creditors of the companies in 61% of cases, by the Revenue Commissioners in 23% of cases, and the balance by the company itself; and Examinerships continue to remain at low levels with only three examinership appointments in the period. This represents just 1% of the 188 corporate insolvencies and is a marked decreased from the 12 appointments recorded in Q1 2017. This very low level of examinership take-up is consistent with prior periods. Commenting on the findings, David Van Dessel, Partner in Restructuring Services at Deloitte, said: "Acting early is key to helping companies to recover through restructuring and I would encourage any director currently struggling to seek advice. Identifying and getting assistance from a qualified and experienced insolvency practitioner will help the overall process and the statistics show examinership is a success for the majority of companies who take this early action. "Statistics from the USA show that one in three companies which enter an insolvency process choose a restructuring. The equivalent statistic in the UK points to a figure of one in seven. In Ireland, the number is one restructuring out of every 100 corporate insolvencies." Corporate insolvencies in Q1 2018 by region: Leinster: 123 (65% of total appointments); Munster: 49 (26%); Connaught: 14 (7%); and Ulster: two (1%). Corporate insolvencies in Q1 2018 – top five industries: The construction industry had 42 appointments (22%). This is a 17% increase on Q1 2017, when 36 appointments were recorded; The services industry recorded the second highest level of appointments with 34 (18%). This is a decrease of 55% from Q1 2017. Since 2015, the service industry has consistently recorded the most corporate insolvencies, this current period being the first since then where it is not in the top spot; The third slot was again taken by the retail sector where there were 28 insolvencies, 15% of the total, unchanged from Q1 2017; The manufacturing sector is fourth with 10 insolvencies, 7% of the total, and up significantly from two appointments in Q1 2017; and Finally, in fifth place is the hospitality sector with 12 insolvencies in the period. Looking closer at the service industry appointments, 50% of appointments were in the area of business service provision, followed by consultancy services (2%) and banking services (1%). Commenting on the level of construction industry appointments, Vincent Sorohan, Director of Real Estate at Deloitte, said: "While a significant portion of corporate insolvencies in the last quarter were construction industry-related, these are mainly legacy cases related to the property crash. Construction activity continues to expand at an increasing pace, particularly in the house building sector, and the real challenge facing the industry appears to be a looming skills shortage which may have knock-on effects down the line for companies. It will be interesting to monitor this particular industry in 2018 and beyond, especially in light of recent announcements such as the news in Ireland of the Sammon Group opting for examinership, the fallout from which has yet to fully hit the construction sector."

Technical roundup 18 May

Thursday May 17th, 2018 09:14:05 AM
Developments of interest this week are outlined. ROI The CRO have issued their regular gazette. European Accountancy Europe has issued a report on the expert analysis of feedback on their 2017 Discussion Paper How to respond to assurance needs on non-financial information. The European Financial Reporting Advisory Group (EFRAG) has commissioned research on the expected economic impact of IFRS 17 Insurance Contracts and is seeking views from a wide range of interested parties. International The IFRS Foun­da­tion has published its Annual Report for 2017 - Financial reporting for the world economy. The report provides an overview of the IFRS Foun­da­tion’s ac­tiv­i­ties during the past year and sets out the Foun­da­tion’s and IASB’s pri­or­i­ties for 2018. The May 2018 IFRS Interpretations Committee Update (IFRIC Update) has been published. The International Accounting Standards Board (IASB) issued the revised Conceptual Framework for Financial Reporting in March 2018. They have now created a quiz to help test your knowledge and understanding of this document. The International Ethics Standards Board for Accountants (IESBA) seeks public comment by August 15, 2018 on its consultation paper, Professional Skepticism – Meeting Public Expectations.

The lifelong benefits of lifelong learning

Wednesday May 16th, 2018 09:07:58 AM
Lifelong learning according to the oracle that is Wikipedia is "the ongoing, voluntary, and self-motivated pursuit of knowledge for either personal or professional reasons". I would take this to mean that it is what we do after we have finished our “compulsory” education – we have been through school and possibly gained a third level qualification to access a career path. It can be considered to encompass the things we do for personal and professional development. What will enhance our skills set, help us secure and improve our performance in our current jobs and attain our next role? Also, what will make us happy and enhance our lives in and outside of work? More and more importance is being placed by both staff and employers on their learning: on the job, in the classroom and informally. It has been linked with staff retention, higher individual and team morale, meeting of targets and goals, improved performance and more. Some employers have taken a novel approach to personal development by gifting staff money or course vouchers that can only be used for non-work pursuits from yoga to languages to art: the idea being that a happy worker is a productive worker and crucially someone who will stay with the organisation. Someone with diverse or unusual skills may be able to offer something unique to the team or the organisation. That’s all well and good but what about the more serious stuff. Yours truly undertook a Masters degree by distance learning a few years ago in an area not at all related to what I was working in – it was purely to get some “me-time” while I was on maternity leave but also with a view to the future: I might go that direction sometime and I might use it. The truth is that I didn’t really use it in terms of the content or subject matter. It was a fascinating and unbelievably challenging and rewarding two years juggling a young baby, full-time work, as well as all the other things life threw at me in that time…and there was a lot. Add to that finding time to study and access modules online along with researching and writing assignments and a thesis to deadlines. To say that it helped my time management and workload planning skills would be an understatement. There were times the alarm clock went off practically in the middle of the night so I could squeeze in a couple of hours study before the school drop off and work. My bedtime was in the early hours of the morning. Coffee and chocolate biscuits were constant features on my desk and my uniform was my PJs or on more glamourous days, my tracksuit. This is the joy and freedom of self-study. I have applied these skills to my workplace, not to mention in my hobbies, personal and home life. I can plan anything with military precision and make a list and pack a bag like nobody else. My family quite likely dread my approach at what are supposed to be fun times like a walk with the dog or a holiday: all will probably be prefaced with a spreadsheet, catering plan or other logistical, tactical planning. On the upside I have gained the confidence that I can do anything I set my mind to and undertaken more pursuits for myself since then. Whereas before I would have approached most things with the “I haven’t got time” attitude, now it’s more with the awareness of the old adage that “if you want something done, ask a busy person”. Since completing the MA I thought I didn’t have time to do, I have completed other recreational evening classes, started new hobbies, started volunteering in my community, completed a fundraising project and hopefully been of more benefit to my employers too. I have also met some lovely people and made new friends and contacts along the way. Lifelong learning is ongoing in every sense – it encompasses the new courses and classes we might do from year to year but it is also the learning we take with us from one area of our lives to the next. It is always interesting to see where a seemingly odd and disparate mix of skills and learning can coincide to give an edge at interview or make you the perfect candidate for a job or project or even just an interesting person to talk to socially. Once you have the qualification, it can’t be taken away so get searching for your next pursuit. There is always time. Amy Dawson is in the Member Services team of Chartered Accountants Ireland who provide numerous specialist qualifications many of which are available by either classroom or distance learning, hopefully making it even easier to find the time to do one! 

GDPR resources for practices

Tuesday May 15th, 2018 03:49:55 PM
Practice Consulting has produced a suite of practical tools and guidance on GDPR for practices. These are for both ROI and NI and are free to our members. They include an eight step guide, outline template procedures and clauses for engagement letters. View the GDPR resources for practices

Survey on HMRC performance – have your say

Monday May 14th, 2018 10:34:42 AM
Earlier this month, HMRC confirmed that it has processed 10 million transactions using robots since 2015, a development which the department says “has improved efficiency and customer experience.” But what is your experience of HMRC service levels?  Today we are launching a survey of members to find out their recent experiences of HMRC services. The survey should take no more than 10 minutes to complete and will be available until 1pm on Tuesday 22 May. Access the survey here. We intend to use the results of this survey to identify major areas of concern and any areas where there have been improvements.  The results will be fed back to HMRC and published on our website. HMRC also recently published the outcome of research into customer experience of the acceptability of the time taken to reach an end result. According to the Executive Summary of that report “Service failure was a common experience among those interviewed. As a result the service they received was not representative of the normal service offered by HMRC.  Customers became dissatisfied with the journey length as the query progressed, encountering challenges in reaching a resolution, which ultimately extended the length of the transaction beyond what had been expected.”

Double tax convention/agreements update, 14 May 2018

Monday May 14th, 2018 10:34:08 AM
Recent developments in this area are outlined.  HMRC have published the 2017 Protocol to the 1977 UK-Switzerland Double Taxation Convention The Belarus and UK Double Taxation Convention was signed on 26 September 2017 The double taxation convention between the UK and Kyrgyzstan was signed on 13 June 2017 The UK-Germany: Exchange of Notes concerning the Convention for the Avoidance of Double Charging of Bank Levies, done on 7 December 2011 and presented to Parliament in July 2017, has been published Use form Ireland-Company (SI 1976 Number 2151 and Protocols) to claim relief from UK Income Tax Details of tax treaties between the UK and Uruguay and related documents have been published The bilateral agreement between the UK and Bermuda for co-operation in tax matters through exchange of information has been published Details of tax treaties between the UK and Algeria and related documents have been published The Protocol to the UK-Ukraine Double Taxation Convention has been published Qatar has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters The guidance on Double Taxation Relief and a list of territories with a double taxation treaty with the UK has been updated The 2018 Protocol to the 1993 UK-Uzbekistan Double Taxation Convention has been published The 2018 UK-Cyprus Double Taxation Convention was signed on 22 March 2018 Use updated form Netherlands-Company (SI 1980 Number 1961 and Protocols) to claim relief or repayment of Income Tax HMRC have publisheddetails of the UK-Chile Double Taxation Convention – 'Most Favoured Nation' clause The 2018 protocol to the 1981 UK-Mauritius Double Taxation Convention was signed on 28 February A memorandum of understanding on the UK-Spain 2013 Double Taxation Convention’s Article 25 Mutual Agreement Procedure arbitration process has been published The International Tax Enforcement (Bermuda) Order 2018 has been published The Double Taxation Relief and International Tax Enforcement (Colombia) Order 2018 and the Double Taxation Relief and International Tax Enforcement (Lesotho) Order 2018 have been published HMRC have also published a number of tax information exchange agreements as follows: UK-Gibraltar Tax Information Exchange Agreement (entered into force 15 December 2010) and exchange of letters UK-Aruba Tax Information Exchange Agreement (entered into force 1 January 2012)  UK-Anguilla Tax Information Exchange Agreement (entered into force 17 February 2011) and exchange of letters UK-Bermuda Tax Information Exchange Agreement UK-St Lucia Tax Information Exchange Agreement (entered into force 19 May 2011) UK-Liberia Tax Information Exchange Agreement (entered into force 30 March 2012)  UK-Monaco Tax Information Exchange Agreement (entered into force 22 April 2015) UK-Turks and Caicos Islands Tax Information Exchange Agreement (entered into force 25January 2011) and exchange of letters UK-Marshall Islands Tax Information Exchange Agreement UK-Netherlands Antilles Tax Information Exchange Agreement (entered into force 1 May 2013)

Government responds to Taylor review

Monday May 14th, 2018 10:33:23 AM
The government has published its response to the Taylor Review into modern working practices.  In addition to the response document, four consultation documents have been published to take forward the project.  At the moment, changes to rates of tax and national insurance contributions have been ruled out. Employment status – closes 1 June 2018 This consultation is seeking views on whether the options proposed in Good Work could achieve more certainty and clarity for businesses when determining employment status, particularly in relation to the realities of the modern labour market. It is also seeking to understand the potential impacts and implications of those proposals and whether there are alternative approaches that could better achieve these aims. For tax, this consultation considers the tests that define the boundary between those currently taxed as employees and those who are taxed on a self-employed basis. However, changes to tax and NIC rates are not within the scope of the consultation. The Northern Ireland Tax Committee will be responding to this consultation. Agency workers - closed 9 May 2018 This consultation looked at: how to increase transparency of contractual arrangements for agency workers how umbrella companies or intermediaries could be brought within the scope of the Employment Agency Standards Inspectorate (EAS) It also sought to gather evidence on the level of abuse of the ‘Swedish Derogation’ with consideration of whether EAS’ remit should be extended to cover the enforcement of the Agency Workers Regulations. Enforcement of employment rights – closes 16 May 2018 This consultation: sets out the government’s intention to enforce a wider range of basic employment rights on behalf of vulnerable workers seeks evidence on the extent of the problem faced by low paid workers in accessing sick pay and holiday pay to help target enforcement efforts sets out the government’s plans to simplify the enforcement process for employment tribunal awards ·outlines the government’s intention to introduce a naming scheme for unpaid employment tribunal awards takes forward the review’s recommendations that employment tribunal judges should be obliged to consider stronger punishments for employers who ignore previous tribunal judgments; and seeks views on how best to implement these measures Increasing transparency in the labour market – closes 23 May 2018 This consultation seeks views on the recommendations in Good Work that focus on increasing transparency between employers and individuals in the UK labour market. 

This week’s UK tax tidbits, 14 May 2018

Monday May 14th, 2018 10:31:57 AM
The requirement to correct and updated guidance in several areas feature this week. In a recent press release, HMRC warns offshore tax evaders that they should report offshore non-compliance by 30 September 2018, or face new, tougher penalties which start on 1 October 2018 under the requirement to correct legislation HMRC has published a policy paper setting out how users can either provide or withdraw their consent to receive electronic communications SI 2018/363 amends SI 2001/1004 as a consequence of SI 2018/337 setting the rate of Class 2 NIC from 6 April 2018 The Welsh Revenue Authority has released technical guidance on Land Transaction Tax (LTT) returns and payments, and cross-border and cross-title transactions. Use the updated register to check the status of overseas corporate lenders who are passport holders for Double Taxation Relief on UK loan interest VAT Notes 2018 Issue 1 has been published together with VAT appeal updates, VAT returns, VAT gap estimate and EC Sales Lists Online: VAT CA40: Employees allowed to pay their own National Insurance has been updated  

Ireland's corporate tax regime and possible future game changers

Monday May 14th, 2018 10:30:42 AM
With recent US tax reform and the current EU tax proposals for CCCTB and digital taxation, is the Irish Corporation Tax system sustainable? Join this panel discussion which takes place in Brussels this coming Wednesday 16 May at 18:45 with three distinguished guests, Dr Brian Keegan, Director of Public Policy & Taxation at Chartered Accountants Ireland, Irish MEP, Brian Hayes and Dutch MEP, Dr Paul Tang.  To read more about the event and to register, use this link.

Bahrain and Saint Lucia join the Inclusive Framework on BEPS

Monday May 14th, 2018 10:29:48 AM
Bahrain and Saint Lucia are the latest jurisdictions to join the Inclusive Framework on Base Erosion and Profit Shifting (BEPS).  This brings the number of countries participating in the framework to 115.  The Inclusive Framework refers to jurisdictions collaborating on the implementation of the OECD/ G20 BEPS Package.

Series 9 Back to Brexit Basics - Equivalence in financial services 14 May 2018

Monday May 14th, 2018 10:29:19 AM
Last week, as part of Series 8 Back to Brexit Basics, we looked at what losing passporting rights might mean for the UK.  This week we look at equivalence and what this process entails.  Equivalence Should the UK lose passporting rights when it ceases to be a member of the EU and EEA, a possible option for the UK could be to apply to the EU for equivalence.  Equivalence can in some cases allow countries from outside the EU to access the Single Market in limited circumstances. According to the European Commission, equivalence means that one country declares that the standards of another in a defined area are sufficiently close to its own to be deemed ‘equivalent.’  It is the basis for granting a non-EU banks and financial services firms certain rights in the EU financial services market. Equivalence cannot give full passporting rights to non-EU banks or financial services firms.  The EU market access rights available under equivalence are considered to be narrower, more onerous and more unstable. Many banking and financial services cannot be provided at all via equivalence.  For example, there is no equivalence regime applicable for UCITS (Undertakings for Collective Investment in Transferable Securities) which allows the marketing and sale of certain funds. How is equivalence determined? Equivalence is not negotiated but requested from the European Commission.  Assessments are launched at the discretion of the European Commission and a detailed assessment of the regulatory regime of the third country is carried out.  Determining equivalence is not based on a direct or exact transposition of EU laws into another country’s rules. Rather it is a close comparison of the intent and outcomes of the EU system and that of the other country.  The length of the process may also vary considerably as the European Commission has no fixed deadlines for completion.  Some research has found that the process can take between two and four years. If the equivalent country changes its rules in any way that materially affects a judgement of equivalence, equivalence and any rights based on it can be removed. This can also result from the EU changing its own rules.  Equivalence can be revoked with only 30 days’ notice and this could make long term investment plans difficult. Decisions on equivalence are listed on the European Commission website. Tune in next week the next in our series of Back to Brexit Basics. Read all of our Brexit updates and Back to Brexit Basics on the dedicated Brexit section of our website.






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