TAX DEADLINE EXTENSION

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Nothing strikes fear into the hearts of business-owners quite as harshly as a looming tax deadline. Here at DCA Accountants we aim to make your day brighter and simpler, so we are delighted to bring you the news of an extension on the ROS Pay & File Tax Deadline.

 

Now, before you all celebrate too much, it is a very slight extension. The previous deadline was October 31st 2015, and has now been shifted to November 12th 2015. Not quite as magnificent a time lapse as you might have hoped, but it might give some much needed wiggle room. This extension will only apply if you file your FORM 11 tax return and use Revenue’s Online Services (ROS) to complete the required income tax payment.

 

We would advise completing this ASAP, as opposed to waiting it out until the last minute to avoid unnecessary stress or mistakes in filing.

 

Whilst this is a welcome extension for most, it is noteworthy that the deadline is becoming consistently earlier each year making returns increasingly difficult. As such, it is vital to stay on top of your documentation throughout the year.

 

It is not yet known if this extension will apply to all tax returns, and until this is confirmed we would suggest assuming that it remains October 31st and aiming for this date in order to avoid any issues. If all taxes are paid under the PAYE system and you yourself had a Capital Gain in 2014, FORM CG1 CAPITAL GAINS TAX must be completed and returned by October 31st.This new extension will not apply.

 

Whilst this extension may be of relief to some, it is advised to carry on as normal and as though the deadline remains at October 31st as it is safer to act under this assumption, than take chances and risk penalties. As always, should you have any concerns or queries we at DCA Accountants are available to assist you in this matter.

AIRBNB – TAX TROUBLE IN THE NEIGHBOURHOOD?

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Short-Term rental website Airbnb has become a go-to staple for travel in recent years. Airbnb acts as somewhat of a middle man between the ‘hosts’ who wish to rent a room or home on a short term basis, and the holidaymaker seeking accommodation. The Airbnb website is one of the easiest travel websites for users of all ages to navigate. The user simply enters the area they wish to stay, and they are given all of the advertisements in this area, complete with pricing, pictures and information about the property. In harder financial times, Airbnb has blossomed as it offers users something different, more transparent, and often cheaper than the usual hotels, without having to pay the host directly.

 

In recent months however, there has been some concern over tax issues with the website, as Airbnb recently stated that they had been asked by the Revenue Commission to provide information on all transactions for the previous year. This revelation caused confusion among many Irish Airbnb hosts who believed themselves to be exempt from tax under the ‘rent-a-room’ scheme. This scheme ensures that those renting out a room in their home are exempt from paying tax on income they earn by doing so, up to a designated threshold. The small-print on this scheme does however specify that it is not applicable to those renting rooms on a short-term basis, which is of course Airbnb’s main ethos.

 

Declan Rigney, assistant secretary of the Revenue’s planning division has stated that there will now be a larger focus on digital marketplaces and peer-to-peer trading in terms of tax payments.

“There are a huge number of businesses trading online. We need to make sure during the course of our audits that all income is returned.”

 

It has been advised that those who feel they may be affected by this information should voluntarily submit the required information ASAP to avoid issues.

 

The Revenue Commissioners have stated that this confusion over the rent-a-room scheme was clarified by them earlier in the year as they view businesses such as Airbnb as a trade. Airbnb’s website currently states that they expect all hosts to adhere to the tax demands of their respective areas.

 

We would advise that any Airbnb hosts keep detailed and correct records of all income and expenses gained through their dealings with the website. If you should require any assistance or advice in this matter please contact us at DCA Accountants.

CREDIT CARD INFORMATION AND TAX EVASION

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It was reported earlier this month that the Revenue were to begin targeting credit card transactions as a way of uncovering tax evasion. This new endeavour came to light after it was revealed that over 2000 Irish companies had made payments to the Revenue Commissioners after failing to declare tax in full.

The Revenue Commissioners say that the practise of examining credit and debit card data to investigate tax payments is now active. The information is being released by merchant acquirer firms. These firms process credit card payments on behalf of the merchant you purchase from. Their data will then be compared to the data submitted by the individual or business in order to assess any issues or differences. Any discrepancies found would be flagged as a potential risk of evasion, to be given a closer look.

How is this information being released, you may ask? Legislation enacted two years ago states that these merchants are obliged to divulge information on transactions over a certain threshold. The Revenue are currently making an attempt to ramp up its digital focus as concerns grow regarding the easier tax evasion in this area.

The general idea here, is to ensure that The Revenue Commissioners have all the information they possibly can, in order to assess effectively. In order to do this, As the Revenue Commissioners have now increased their digital focus, they are now engaging new teams in the advanced analytics area. This process utilises a wealth of digital resources in order to flag potential tax evasion.

Declan Rigney, assistant secretary in the Revenue’s planning division has stated that the information has been of great benefit to their research into potential evaders:

“We are able to match information up with our records and see firstly, do we know about them, and secondly, have they registered with us and have they declared income and so on. After that, we can examine if that cumulative figure for the year matches what they have told us in their income tax or corporation tax returns”

Revenue have now stated that their advanced software, known as the Risk Evaluation Analysis and Profiling (REAP) system – (which sounds a lot more violent than it is we promise), can now accurately predict whether someone is potentially evading tax payments or not. This system can also compare cases in order to highlight potential issues that may otherwise have gone unnoticed.

So, it would seem that the ‘Tax Man’ has now well and truly entered the modern age, and with all this technology at the Revenue’s disposal it hopes to ensure that tax evasion becomes a thing of the past.

If you require any assistance or advice on managing your own or your businesses taxes and finances, please don’t hesitate to contact us at DCA Accountants.

CREATING AN EFFECTIVE WEBSITE FOR YOUR COMPANY

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In this digital dominated age, a website is a necessity for fledgling and well established businesses alike. A website may be the first port of call for customers or investors searching for the services and products you offer. Regardless of any other marketing methods you may put in place, a website is of great importance in order to get the message of your business out there and give potential clients the information they need. Think of your website as being an extended, digital version of your business card. A way of introducing yourself and your company to the wider world.

As well as the existence of your website, the quality of your website and the ease with which it can be navigated could make or break a transaction with a potential customer. How can you ensure that your website is both visible and accessible to those who will need it? We have compiled a few handy tips for you to consider:

Choose Format.

This is one of the most important initial decisions you will make regarding your website. This will decide how your content is updated and managed. If you intend on doing regular updates yourself, a content management system such as that used by WordPress or Joomla would be the best choice. With a Content Management System you simply input blocks of text and photos as necessary using a set template. Alternatively, if you have hired a web developer or have experience with code yourself, you can build your website from the ground up. Of course this option comes with its challenges and may make regular updates more challenging.

Generate Content

Next to your website’s general layout and design, your content and copy will be the key to generating website traffic. Content is what will attract and keep visitors on your website so it is important to keep content varied and interesting and avoid having massive blocks of text apart from the blog section. It has been suggested that visitors decide whether to stay on your website or go elsewhere within 4 seconds so this is good to bear in mind when generating content. You have a limited amount of time to impress your visitors, and it would be advisable to have some copy already on hand so that as soon as your website is up and running there are a few options for your new visitors to choose from.

Social Media

Social media is one of the biggest ways of generating a following these days so as well as setting up a website it is a good idea to set up relevant social media channels for your business such as Twitter and Facebook. Linking these social media channels to the blog aspect keeps your followers updated and generates some extra traffic to your website. These are also excellent tools for getting your company message out in a quick and informal format.

Maintain Content

Finally, the most important thing to remember when creating your own business website is that it must be consistently in flux. Your content must change and be updated on a regular basis as this is what will keep prospective clients returning to your website.

DIFFICULTIES IN VALUING A BUSINESS

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Valuing a business can be one of the most challenging issues faced by business owners and analysts alike. Valuing is a difficult and incredibly complex task, but one that is utterly essential. On occasion, traditional modes of valuation simply do not suit the business type. These techniques often assume a certain level of stability and an imagined risk profile which may not be applicable, and without being adapted, this can result in critical errors in valuation.

In the early stages of your business it can often be a struggle to value the business in an accurate way. This is also often a stage in which it can be difficult to predict the risks associated with the business. In this instance three things must be predicted which can be challenging to do in changing financial times: how will the market you are entering grow and change? What is the likelihood of your business surviving and what risks will be associated with the venture in the longer term?

Analysts can often be more concerned with the general economic growth, rather than the growth of the individual company and this may be something you will have to take into account in your own calculations. For ease: we have collected some of the most common forgotten issues that may become a problem in your valuation and risk assessment, in the hope that you may be able to avoid these pitfalls.

Originality/Diversity: A good thing to bear in mind when valuing your business is that businesses which offer an original/single product or service are subject to a higher risk level than those which offer a well-known or a great many products and services.

Clientele: It is important to take into account your current and projected clientele when valuing and assessing your business. For example, if your business is one which has relatively few clients, then your risk factors will be much higher as the results of losing one of your clients will be much more detrimental to your business than one which has a wide range of clients.

Projected Lifespan: Your Company’s projected lifespan is often difficult to assess but it is important to take into account the changing business world you are entering and whether or not it is likely that your product or service may soon become outdated.

Location: Location is not only a factor in setting up your business, but also in valuing it and assessing its growth capabilities for the future.

Assets/Liabilities: When valuing your business it can be easy to forget to factor in current and projected assets and liabilities. When included, these can paint a more in depth picture of the current and projected value of your company.

Expectations: It is vital to remember that valuations are essentially expectations by nature, and they can be used as a blueprint for the planning and maintenance of your business.

There are always unforeseen circumstances both negative and positive that will affect your business and these cannot be predicted. As such, your valuation is a blueprint for you to build upon rather than a strict prediction.

If there is any way at all we can be of benefit to you in the start-up, maintenance or valuation of your business please don’t hesitate to contact us at DCA Accountants.

DELEGATION IN BUSINESS

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Delegation is defined as being “the act of giving control, authority, a job, a duty, etc., to another person.” You could be forgiven for thinking that delegation is just another buzz word used in management meetings or team building exercises but the truth is that whether your business is small and just now finding its feet or an enormous multinational corporation, delegation is an absolutely essential part of all aspects of business from the ground up. It has been noted that delegation is not a task, but an on-going process that becomes an integral part of a successful business.

 

We all know the saying “if you want something done right, do it yourself” and we are all guilty of reneging on delegating when we find ourselves frustrated or in a time crunch. Whilst this is a perfectly acceptable and sometimes expected practise, continually refusing to delegate can have serious professional and personal repercussions including exhaustion, low morale depression and burnout. It is essential to employ more long-term thinking practises. The process of delegation can also be beneficial in avoiding the pitfalls of micromanagement wherein your employees may not feel valued or trusted to carry out certain tasks. Delegation is not easy, but sometimes the most fulfilling and worthwhile things are difficult at first. Here we have collected some of the most important things to bear in mind, to help you engage in effective delegation in your workplace.

 

Plan ahead:
Long-term thinking is essential in all aspects of business, but particularly when it comes to delegation. It is important to know in advance what it is you want to achieve and be able to express this to your colleagues.

 

Know when to delegate:
Whether you are in a managerial or a more secondary role, the most important aspect of delegation is to know what tasks you can delegate and to whom. There will always be some tasks which should be completed only by you and it is important to identify what these are in order to separate them from all other tasks. Once you have identified your own most critical tasks, you can then make a note of those you feel could be completed by others – and if applicable assign those tasks as necessary. This frees up your own time to be used more wisely and also shows a level of trust in your employees/colleagues which they might not have felt previously.

Know which tasks suit which employees:
The next important step in effective delegation is deciding which person will be the right fit for the job. This can be as simple as assigning a sales job to a sales oriented employee, or simply matching an employee’s skillset or personality to the job at hand. Don’t be afraid to offer further training to employees who will require it before taking on a task.

 

Be specific:
This is perhaps one of the biggest keys to effective delegation, and also where many people go wrong. The worst thing you can do when delegating is to be vague, as this leaves your employee unsure of what their role is, causing undue stress to both them and yourself when you invariably fall into the “if you want something done right, you have to do it yourself” trap. The key here is to identify the task clearly, know what results you want to achieve here and ensure that the person to whom you are delegating is well aware of the expected outcome. Communication is the key to effective delegation and a successful business.

 

Deadlines:
Deadlines must be discussed when delegating so that the individual taking on the task is well aware of the parameters within which they are expected to complete the task. At this point, agreeing on methods of communication and “checking in” on the project should also be agreed. Setting a defined deadline can avoid problems further down the road.

 

Accountability:
This is the hardest part of the delegation process. All involved must know who is accountable should there be a problem from the outset, as well as what will be expected of them with this task. Accountability cannot be passed on, it can only be shared. Ensuring accountability means that your employees/colleagues will stay

 

Feedback:
Offering feedback on how the process/project has gone boosts staff morale and also ensures that all involved know their strengths and what aspects they can work on for the benefit of future projects.

The process of delegation is a difficult one to begin, but will become easier each time as your employees/colleagues become better equipped and experienced at dealing with certain similar tasks in the future. You will soon find yourself wondering why you didn’t start this process sooner as your business becomes a more defined and organised organism.

PENSION DEADLINES

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The Revenue Commissioners have recently extended the deadline for people in excess of current pension savings to notify them. It has become a standard practise in the current financial climate for the amount of pension funds an individual can accrue while availing of tax relief to be reduced.

 

Those above the new threshold can notify Revenue and receive a new personal fund threshold, reflecting the size their pension fund was on the date the lower limit was announced. This is to ensure that these individuals do not face a further tax bill.

 

In January 2014, the threshold fell from €2.3 million to €2 million, those with savings between these figures were given until July 2nd, 2015 to notify Revenue. Despite the deadline, it is thought that many people have not been in touch with Revenue and as such the deadline has now been extended to July 31st 2015.

If you have pension savings between €2million and €2.3 million you are encouraged to notify Revenue ASAP in order to avoid any further taxation on these amounts. It is unlikely that further extensions will be granted.

 

The deadline for staff in the public service to retire if their pensions are to be calculated on the higher salaries has also been extended in recent months. The new deadline will be July 2016. Minister for Public Expenditure and Reform, Brendan Howlin has said that the new deadline is intended “To minimise impacts on schools in particular.”

 

It is hoped that this extension will reduce the number of key managerial senior staff retiring en masse, which could lead to significant financial strain on schools in particular.

The Department has said that under the Haddington Road agreement, public service pay rates were reduced by 5.5% or more. “Retiring within the extension period will allow an affected public servant to benefit from superannuation calculated at the pre-cut pay level.”

 

If you are unsure about how these changes may affect you or you require any assistance with your own financial matters, please don’t hesitate to contact us here at DCA Accountants.

VENTURE CAPITAL FUNDING

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Venture capital groups have become one of the most popular methods of gaining equity. This method has become so popular of late that Irish Venture Capital Companies have become one of the primary sources of funding for SME’s.

The purpose of venture capital groups is to provide equity to growing start-ups.  These groups may also act as a mentor of investment as they often provide essential advice to the companies in whom they invest as well as assisting in the expansion of the company.

 

It was reported in February of this year that Venture Capital Funding for SME’s had hit the 400m mark. This is the highest level of venture capital funding seen in over 10 years.  Over 80% of this money was dedicated to the expansion of existing companies. This growth in the popularity of venture capital funding has lead to growing confidence among Irish entrepreneurs.

 

Obtaining venture capital is very different from raising debt or a loan from a lender such as a bank and is an option that should be considered carefully. One of the ways in which this method of funding is unique is that instead of seeking security on their investment, lenders of venture capital will usually charge interest on the loan. Another way in which this option is different is that venture capital is invested in exchange for a stake in your company; creating a symbiotic relationship between the investor and the company they are investing in. The investor’s return is dependent on the profitability and growth of our business.

 

Recent research has shown that Venture Capital backed companies grow faster than other companies. Research has also shown that these companies are more profitable than their peers at a similar level. As well as injecting cash into the business, the investment is also likely to inject the start-up with credibility

 

So, is Venture Capital a viable option for your company?

Venture Capital is the best option for you if you are hoping to rapidly grow your company, and have the ability to protect your intellectual property throughout the investment period. In order to appeal to venture capital investors it also helps to have a USP (Unique Selling Point).

 

If you decide that Venture Capital Funding might be for you, you must ensure that your investor has a strong track record, excellent credentials, industry contacts that can help you grow your business and the time to invest in growing your company.

 

There are a wealth of venture capital funds available in Ireland at your disposal. For your convenience we have compiled a short list of those available:

 

  • AIB Seed Capital Fund
  • AIB Start-Up Accelerator Fund
  • Bank of Ireland Early Stage Equity Fund
  • Bank of Ireland Start-up and Emerging Sectors Equity Fund
  • SOS Ventures Ireland Fund
  • Frontline Ventures Fund
  • Delta Partners
  • Enterprise Equity

It is vital to choose the correct investor for your business, as your investors will be some of your most important contacts. Your venture capital provider should be able to provide advice and guidance as well as capital and it should be a relationship that will grow alongside your company.

ACCOUNTANT JOKES

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The return to the working week is always a struggle after the weekend, and it can be quite hard to immediately switch your brain into working gear on Monday morning. Monday often finds a worker more adept at song lyrics and recipes than numbers.

Friends and family who work on weekends may bemoan us as the luckiest of the lucky, but here we all are having a quick internet break as we attempt to rouse ourselves with copious amounts of caffeine and the occasional bit of gossip, that’s right, we see that Facebook tab open!

So, today we thought we would bring you something completely different to brighten up the post-weekend slump. Here are some of our favourite accountancy jokes:

  1. What is the definition of Accountant? Someone who solves a problem you didn’t know you had in a way you don’t understand.
  2. What do accountants do for fun? Add the telephone book.
  3. What’s the difference between an accountant and a lawyer? The accountant knows he is boring.
  4. How do you spot an extroverted accountant? He/she looks at your shoes while he’s talking to you instead of his own.
  5. What does an accountant say when you ask the time? “It’s 10.42 am and 10 seconds; no wait – 11 seconds, no wait – 12 seconds, no wait…”
  6. When does a person decide to become an accountant?
  7. When he realizes that he doesn’t have the charisma to become an undertaker.
  8. What do you call an accountant with an opinion? An auditor.
  9. How does Santa’s accountant value his sleigh? Net Present Value.
  10. An accountant is reading nursery rhymes to her young child. When she is finished, she answers her son’s question: “No, son. When Little Bo Peep lost her sheep that wouldn’t be tax deductible, but I like your thinking.”
  11. An accountant is having a hard time sleeping and goes to see his doctor. “Doctor, I just can’t get to sleep at night,” he says. “Have you tried counting sheep?” inquires the doctor. “That’s the problem — I make a mistake and then spend three hours trying to find it.”

NEW FUNDING FOR IRISH CONSTRUCTION SECTOR

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A recent report has suggested that Sankaty, a well-known leading global credit specialist is now looking towards lending in Ireland. It was reported that Sankaty has been planning to raise up to $1 billion for a lending fund intending to target businesses that have found it difficult to gain funding in the wake of the recession – in particular, those in the construction sector.

 

Sankaty have teamed up with Irish financier Dermot Desmond to back a new venture called Broadhaven Credit Investments, which was officially set up on June 24th 2014. The venture is being fronted by Stewart Doyle and David Cullen and is backed by Sankaty London team.

 

Broadhaven has earmarked €200million to support house construction in Ireland, one of the sectors of Irish business which has been hit hardest by the financial crisis. The hope is that this extra funding may reduce the risk of another housing bubble, and by extension the consumer may see a reduction in the skyrocketing house prices. Broadhaven is prepared to support credible house builders in Ireland. Despite having its primary focus be on the construction sector, Broadhaven also intends to widen its gaze to the wider lending world by extending its funds to some Irish SMEs.

 

It is believed that while the initial seed capital for Broadhaven is estimated at €200million, there will be additional opportunities for this seed capital to grow exponentially over time. Sankaty has told potential investors in its new fund that the middle market presents an opportunity to earn “attractive risk-adjusted returns with significant premiums to the liquid credit markets. Structural changes in the global banking sector continue to constrain traditional lenders, leaving a supply and demand imbalance for middle-market financing.”

 

Since the company’s inception, Sankaty has invested over $7.5 billion in middle market investments and brings a debt-oriented approach to funding, and the move to the construction sector is an interesting one for such a huge company. Similarly, the move into this sector for such a well-known financier as Dermot Desmond may suggest that the long-suffering housing market in Ireland may indeed be about to pick up.

 

The funds being raised for this venture will have a six-year lifespan and offer funds over a three-year period. These funds may be an attractive prospect for you and your business. Should you require any assistance on how to manage your funds or repayments we here at DCA Accountants are here to offer you advice and assistance.