Changes that could negatively impact your Pension

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Fail to Prepare?

If the economic climate of the last decade has taught us all anything, it is that it is never too early to start planning ahead for the future of you, your family, and your business. Often we forget that when the time comes for our retirement from the business world, State Pensions may not offer us the lifestyle we wish to have during the Golden Years of our lives. As such, it is always advised to begin looking into pension options as early in your working career as possible to begin saving for your own future and that of your family. We have spoken in the past about preparing your business for your departure, but preparation of the self can often be overlooked.

A recent report by leading pension actuaries Tony Gilhawley and Roma Burke has found that when it comes to State Pensions and the tax reliefs on same, public servants are the primary individuals who benefit from these reliefs. It is suggested that any movement to reduce tax reliefs may encourage Government workers to seek pay increases which could have consequences in many areas.

According to the report, the State’s contribution to the pension of public servants is on average just under 30%, or 53% for Gardai. This of course applies only to public sector workers engaged in employment before 2013. This is in stark contrast to the average private sector worker who will receive an employer contribution of as little as 7%, if they receive any employer contributions to their pension at all. The leading actuaries even went as far as to state:

“If you want to retire on a good secure pension, don’t work in the private sector. Join the public service.”

Suggesting that the current pensions system in Ireland is somewhat discriminatory against workers in the private sector. The report also suggests that there are incredibly few employers in the private sector willing to make decent contributions to the future pensions of their employees. Whether or not this discrimination is the case, or whether your own company chooses to contribute to your pension it is wise to begin looking into your options and begin making plans for your extended future beyond the working world.

Should you have any queries on any business or personal financial matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we are always happy to help.

Safeguarding your Business against the Brexit Blizzard

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It seems that we have been talking about the looming shadow of Brexit for many years at this point. Now that there is finally a set date, it may seem that there is still very little information available for Irish companies with ties to the UK, so today we will focus on some possible implications of Britain’s upcoming exit from the European Union for Irish companies to enable you to best prepare and secure your company.

The United Kingdom (UK) is now set to leave the European Union (EU) on March 29th 2019 and there are many ways in which this could have implications for many Irish companies with ties to the UK. The main implication from the outset will be that the UK will no longer be part of the European Economic Area which may cause a number of shifts for Irish companies.

EEA Resident Director:

Under the Companies Act 2014, all Irish companies are required to have at least one director who is resident in the European Economic Area. Any companies who have directors ordinarily resident in the United Kingdom will be required to appoint a director who is resident within the EEA, or to take out a Section 137 Insurance Bond against non-compliance until they are fully compliant with this rule. It is suggested that this be done immediately to avoid issues.

There may be a loophole available should the director have a “real and continuous link to the State of Ireland”. These specifications must already be met and will not be satisfied on the basis of future intent.

Exemptions for Irish Subsidiaries:

In certain cases, Irish subsidiary companies may not need to file ‘Individual Entry Financial Statements’ with their annual return. This applies only to Irish subsidiaries held by holding companies under the laws of an EEA country, and in no other circumstance. If the subsidiary is held by a UK holding company, this will not apply.

Changes to Year End:

Under current Irish law, a company can change their financial year end date once every 5 years. Currently, if the aforementioned company is part of an EEA multi company structure, the financial year end dates of all companies can be aligned. This will no longer be applicable to company structures which include a UK company.

Irish Branches:

Many UK companies have registered an ‘Irish Branch’, which would naturally be a branch of an EEA company. Following Brexit, this will no longer be applicable and the Irish branch will find itself subject to stricter filing rules.

Imports and Exports:

This is arguably the most crucial item for Irish companies with links to the UK. It will be required post-Brexit for all companies importing or exporting goods into or out of the European Union to have an Economic Operators Registration and Identification Number (EORI). This will be essential for customs purposes and it is advised that all companies with trade links to the UK ensure that they have this ready.

As we have stated in the past, the future post-Brexit is uncertain but does not need to be clouded in doubt and negativity. The above issues are important to be aware of so that you can safeguard your business in these uncertain times, but many businesses can continue to thrive in this new environment without the assistance of our closest neighbours.

As always, we here at EcovisDCA are ready and waiting to assist you with any issues you may have on any business or financial matters and we look forward to continuing our relationships with all our clients and friends.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Boom or Bust?

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We have spoken on many occasions over the years about the difficulties faced by prospective first-time home owners in the current market. From the inception of the more stringent rules for attaining mortgage approval, to the ever-increasing cost of living, renting and the increasing prices of homes available for purchase as demand increases and supply dwindles. With many effectively pushed out of the property market for the time being, it may come as a shock to learn that almost half of all properties sold in 2018 were paid for with cash or savings.

The latest Consumer Market Monitor from the Marketing Institute of Ireland and UCD Smurfit Business School confirms that despite a property market which remained sluggish throughout 2018, approximately 45% of all properties sold in 2018 were snapped up by cash buyers. Whilst remaining relatively sluggish, there was an increase of 8% in the amount of homes sold with 55,000 being sold and 25,000 being paid for with cash or savings. While this may seem like a rather large number of sales and a positive step for the industry, it is in fact still a massive difference to the number sold during the last boom, which reached 105,000 sales. The current numbers of cash sales in fact are more similar to those in the recession years during which mortgage approval numbers were at an all-time low.

Whilst cash buying may seem like harking back to boom times, and other areas of the economy continue to improve, the numbers actually suggest that while more mortgages are being approved than previous years, this is by no means a boom as levels remain consistently much lower than during that period.

Author of the report, Professor Mary Lambkin has said that;

“The property market’s sluggish growth does not reflect the large increase in the working population. […] While the number of homes for sale has increased, the level of property sales should be about double the current level, approaching the level that the market experienced during the early 2000s, when the workforce was about the same level as it is today.”

The cash buying phenomenon we currently find ourselves in has seen the price of modest homes skyrocket as cash buyers would appear to be more likely to purchase homes on the cheaper end of the spectrum. It is hoped that an increase in the construction of new homes will facilitate an increase in residential property sales in the coming year. As 35,000 homes are needed each year, it is hoped that construction will continue in order to begin to meet rising demand, with 23,000 new homes set to be built this year and next year.

As always, we here at EcovisDCA are available to assist should you have any queries on any business or financial matters. We look forward to hearing from you.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Help your Employees Burn Bright not Out

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We have all had weeks during which we envision the perfect working environment as being a set up at home with convenient access to snacks, caffeine and maybe even a dash of cheeky daytime television viewing. There have been times for us all when someone mentions their remote status and we release a sigh of envy at their not having to venture out into the bitter wilderness (let’s face it, we are all that dramatic at 6am) before the sun has even risen. Is remote working or working from home all it’s cracked up to be?

Recent studies have shown that contrary to our own inherent bias about the joys of working from home workers who come in to the office at least once a week are in fact happier than those who work entirely remotely. Whilst flexible and remote working have obvious positive points for the employee, there are some issues that employers should be aware of in order to assist these workers in maintaining productivity and avoiding burnout and loneliness issues which can damage employee wellbeing on a number of levels.

Loneliness is an obvious issue with remote workers as they don’t have access to the conversations and personal daily interactions one has in an office environment. Remote workers can often feel entirely separate to the office environment and a bit cut off from this world. These workers miss out on the sense of community that comes from working in an office environment and also the bonds that result from daily interaction with others. Humans are social creatures by nature and thrive on interaction, when a worker receives no interaction for extended periods it can lead to times of depression.

The term ‘burnout’ is unfortunately one which is becoming increasingly common in recent years as workers begin to push themselves further and further in the pursuit of success. Burnout generally refers to employees pushing themselves to a point at which they can no longer function. It is said that this phenomenon is seen regularly in remote workers due to the fact that they can more easily stretch their working hours in a way that is not sustainable in the long term. Burnout is perhaps one of the worst things any employee can suffer as once the employee has fallen behind, this can become a negative cycle as they attempt to catch up.

So how can the employer best support remote workers and assist them in avoiding the pitfalls of burning out, and the deep loneliness that can result from the lack of daily interaction?

  • Ensure that remote workers feel part of a larger community.
  • Consider having a chat or video conference feature in which remote workers can interact with office workers for regular updates and to ask questions etc.
  • Check in with remote workers regularly to ensure that they are ok.
  • Offer a day in which remote workers are welcomed into the office for an office lunch or meeting.
  • Engage in conversations with remote employees and colleagues that relate to issues outside of work, so that they feel that others have an interest in their lives similarly to how they would feel in an office environment.
  • Ensure that remote workers are not keeping unsociable hours and that they have their standard non-work time.

The new flexibility of working hours that modern technology affords us is of course a positive, but it takes effort on both the sides of the employer and the employee to ensure that remote workers do not feel isolated from the rest of the company community.

As always, we here at EcovisDCA are available to assist should you have any queries on any business or financial matters. We look forward to hearing from you.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Benefits Are Kind

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As Irish people, we are hard wired with that “nothing comes for free” mentality, which is excellent for maintaining that hard working focus and work ethic we are often known for, but can also be a negative attribute as it can sometimes mean that we fail to know what options are available to us and never enquire further. We here at EcovisDCA value our clients and friends so much that, as always, we endeavour to ensure that you are fully informed and up to date on your entitlements. After all, the squeezed middle, is surely squeezed enough so any relief SME owners can get is welcome.

Here in Ireland we have only really begun our journey into becoming more energy efficient, resulting in new initiatives being announced in order to encourage and support companies endeavouring to become more energy efficient. In recent Budgets it was announced that there would be a Benefits in Kind (BIK) exemption on Electric Vehicles, this can also be applied to company cars. A Benefit in Kind refers to any non-cash benefit of monetary value provided by an employer for an employee, often known as ‘benefits’ or ‘perks’. Due to the monetary value nature of these benefits, they are deemed taxable income. As such, deductions must be made by the employers on these benefits. How can a BIK Exemption on Electric Company Cars work for you?

From January 1st 2018 no taxable benefit applies for an employer providing an employee with an electric car or van. The BIK exemption will only apply to cars fuelled solely by electrical means, there will be no change to the status on hybrid cars. This could lead to valuable savings for you and your company in the long term. The addition of company owned car charging points is an optional additional benefit for these employees as these too are exempt and offer the employee free fuel with no taxable deduction on either side.

  • There are however a number of points to consider as with any exemptions there are of course conditions.
  • Per the announcements of Budget 2019, there is now a cap on the original market value of the vehicle that is exempt. Any electric vehicles with an original market value in excess of €50,000 will remain taxable in the normal manner.
  • Should an electric car or van be made available to an employee for private use, no taxable benefit will arise in relation to that use.
  • The exemption remains in place from January 1st 2018 until December 31st
  • Cars and vans must derive their power only from electrical means, hybrid vehicles do not qualify for this exemption.

We hope that this information will be of use to you going forward and as always, we here at EcovisDCA are always on hand should you have any queries or concerns on any business or financial matters.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Employee Relationships

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Once More unto the Breach (of trust)

We have spoken in the past about the importance of having a happy workforce of employees in your business, as well as speaking about how vital having a decent work-life balance is for personal and business health. Reports this week suggest that many Irish employees remain sceptical of their employers in recent years, hopefully something that can be rectified going forward. As big supporters of Irish SMEs we would always advise checking in with your employees and ensuring that they are happy in their roles through regular reviews etc.

Communications Group Edelman published their 2019 Trust Barometer this week, suggesting that less than 7 in 10 employees in Ireland trust their company management. This places Ireland in the bottom three quarters of all countries surveyed in terms of trust in business management structures.

Edelman CEO Richard Edelman has been quoted as saying of the findings:

“The past two decades have seen a progressive destruction of trust in societal institutions, a consequence of the recession.”

That same old refrain we have heard for many years now as who among us would have guessed that the recession would have such far reaching effects further on in time? The report also suggested that globally, employees are more likely to trust their direct line manager as the person that they are most closely in contact with. Many of those surveyed believe that it is up to the CEO to impose changes to the working world, rather than waiting for Government heads to impose changes.

Employees remain willing to open their trust, but this report has found that this trust must be earned and efforts must be made to meet the expectations of their employers. An employee should feel secure in their role and confident to approach in the event of any issues or queries. This in turn leads to employees who are often more willing to go above and beyond in their roles, because they feel valued on both a personal and a business level. In addition, happy, satisfied and valued employees remain more likely to speak up and advocate and recommend their company.

As employers, and especially employers in the SME market, we must continue to recognise our employees as people in their own right and allow employees to grow and flourish in their roles without feeling taken advantage of. It is vital as management to keep abreast of all goings on within your business and though this is a daunting task, getting to know your employees and creating a happy and thriving workplace can also be an incredibly rewarding and gratifying one. Valued employees are loyal employees.

As always we here at EcovisDCA are always available to help with any new business or finance queries you may have. Please don’t hesitate to get in touch.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

SMEs Come In To 2019 Fighting

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As we cruise in to the middle of January, and we finally stop writing the incorrect year on all of our notes, we begin to look towards what 2019 may have in store and what we can bring forward into this New Year that was learned in 2018. It is natural to be caught somewhere between cautious and optimistic for the year ahead even on a personal level, and reports this week suggest that the feeling amongst the Small Business Community is no different.

The latest report from the Small Firms Association (SFA) this month suggest that the mood within the Small Business Community at present is very cautious yet somewhat optimistic with just under 60% of members (all small businesses with 50 employees or less) stating that they feel that the business environment is improving and continuing to do so. This is a drop of just 2% from last year which emphasises the level of uncertainty within the year ahead as the idea of a Hard Brexit and border issues for Irish businesses continues to loom large.

Brexit was naturally highlighted as one of the larger areas of concern, which is unlikely to change for a number of weeks as talks in Britain ramp up and the situation becomes more tense, fraught and confusing for those of us that could be impacted. We have often discussed the increasing cost of living in Ireland, but we have not highlighted another cause of concern with small businesses and SMEs which is the increasing cost of running a business which rises in conjunction with the cost of living. With unemployment decreasing steadily, attracting talented staff has also become a tripping point for some small businesses.

Director of the SFA Sven Spollen-Behrens has stated that;

“2018 has been a challenging year for small business […] The confident mood of a year ago has eased a little on account of Brexit and the tightening labour market. Nevertheless, the Irish economy remains in a strong position and this is confirmed on our member’s feedback.”

Despite these concerns, over two thirds of the businesses surveyed outlined their plans to recruit and expand their business over the course of 2019, whilst half of those surveyed had reported continuing growth. This shows that even when the environment is clouded by uncertainty and difficulties, Irish SMEs will always come out fighting.

Whether 2018 was your businesses most successful year to date, or fell somewhat short of business expectations, there is a full year of opportunity to embrace ahead. While we may be wary of the changes Brexit may bring to our shores, we must also be prepared and safeguard our businesses against any coming storm. We hope 2019 will be an incredibly successful year for all and as always we here at Ecovis DCA are ready and available to assist with any queries or concerns you may have with regards to any business or financial matters. Please don’t hesitate to contact us we are always available to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

2019 Economic Crystal Ball Gazing

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Hello and welcome to 2019! We here at EcovisDCA hope that all of our clients, colleagues and friends had a wonderful festive season and are well-rested and ready to face the working year ahead. With 2019 just getting ready to kick off, we have decided to begin the year with a little run down of the most prominent predictions for the financial year ahead. Chief Economist for EY, Professor Neil Gibson has given his predictions for the year even amidst all of the Brexit uncertainty surrounding the year, and it will be interesting to see what comes to pass.

  1. GDP Growth to rise by 4.2%

According to Dr. Gibson it is likely that 2019 will see GDP growth remain strong. Rising employment levels and increasing wages should all contribute to this growth which he estimates could reach 4.2% this year.

  1. Employment Growth to rise by 2.7%

In welcome news for our island’s continued economic recovery, it is predicted that employment rates will continue to rise in 2019. According to EY’s studies, Dublin is now the most popular relocation location for firms needing to move in full or part out of Britain due to Brexit

  1. Wage Growth to rise by 3.6%

Following on from the previous, it is predicted that wage growth will remain strong in 2019.

  1. Consumer Spending to rise by 2.9%

It is predicted that consumer spending will grow steadily in 2019, with Brexit making Ireland a very attractive trade location.

  1. Migration to Increase the Population by 40,000

In perhaps one of the more unexpected predictions, it is presumed that Brexit tensions and a growing labour market may create migration, as Ireland becomes a more attractive prospect for companies and workers alike. The risk here is that our ever increasing rent prices may postpone some of the influx.

  1. Inflation to Increase by 1.8%

It is predicted that in 2019 inflation may increase, as prices continue to push upwards.

  1. House Prices to Increase by 4%

An unwelcome prediction for many who already feel pressured by the house prices in Ireland. It is predicted that migration following Brexit may mean that this will be largely felt in rental prices.

  1. Construction Inflation to rise by 7.5%

As we have spoken about many times, there is an increasing demand for housing in Ireland and rising prices reflect this. It is predicted that the cost of construction will continue to rise in the year ahead.

  1. Housing Completions to top 25,000

Demand for housing is set to rise in 2019 and this is set to place a further push on the construction sector.

  1. Tax Collected from Businesses and Tax Payers will rise by 4.2%

This is likely to be a simpler process due to PAYE modernisation, and it is said that a strong labour market and strong economic growth should see an increase in collected tax going forward.

  1. Government to Spend more than Collected in Tax by 0.1% of GDP

According to Dr. Gibson, “Ireland looks set to enjoy its first positive general government balance in a decade.” As the pressure to spend increases, it is thought that the balance may tip in a more positive direction this year.

  1. Unemployment will reduce further to 4.9%

Unemployment was an issue that plagued Ireland during the economic downturn, and it is predicted that growth will cause unemployment levels to drop even further, perhaps even down to the levels seen at the peak of the financial boom.
It remains to be seen whether these predictions will come to fruition, and it will be interesting to check back in on them next year. We ourselves are very much looking forward to the year ahead and as always, should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

PAYE Modernisation – Part 2

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Getting Ready to Face 2019 Head On

Following on from last week’s focus on Revenue’s end of year notice, today we will focus on some of the other main points raised in the notice which may be of benefit to you and your business in the new year of change ahead. Here at EcovisDCA, we want to ensure that our clients and friends head in to 2019 with the right mind-set and have their most successful year.

Statements:

As we have already discussed, Revenue are abolishing a number of their regular forms including the P30 and P35. Instead of these forms, Revenue will issue a monthly statement on your payroll submissions. This statement will include a summary of total liability as well as a breakdown of liability.

It is important to note that the monthly statement will be accepted as your return if no amendments are made by the return due date which will be the 14th of the following month.

Employees:

Beginning January 1st 2019, commencing and ceasing employees will become part of the normal payroll process. We discussed RPNs in last week’s post, and these must be requested for any new employees before payment is issued to them. This action creates the employment in Revenue records and is the only action you need take on this.

USC (Universal Social Charge) and Emergency Tax:

It was announced in Budget 2019 that there will be changes to USC and Emergency Tax, the information on the Revenue online system has been updated with these details.For employees who are exempt from USC, their exemption will be noted on their RPN. If circumstances change, the employee may need to contact Revenue to have a new RPN created.

Further Information:

Revenue are constantly updating their guide to PAYE Modernisation for 2019 on their website so be sure to stay informed. Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

PAYE Modernisation – Part 1

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Everything Changes and Stays the Same

It’s getting to that special time of year again, when everything starts to wind down (or ramp up for those in retail businesses of course), the evenings get darker and darker and the early birds begin putting up twinkling lights much to the chagrin of the late starters. It is also that time of year when thoughts begin to turn inwards and you may be reminiscing about the year 2018 and whether it has been a successful or turbulent year for your business. It is important at this time of year, to take time to focus on the year ahead and make plans for the future. As such, Revenue have released an end of year notice for employers, and we thought this would be the perfect time to take you through the main points. This week we will focus on the first half of the notice, with next week’s post detailing the second half.

2018 Employer Tax Credit Certificates:

Revenue have stated in their brief that they would cease issuing 2018 P2Cs as of November 30th, with the exception only of those employees commencing employment notifying Revenue in December, these will continue to be issued until the end of the year.

PAYE Modernisation:

This will come as no surprise to our regular readers as we have focused quite heavily on this of late, but this long discussed and well overdue change will be introduced on January 1st 2019. The old PAYE system will be changed to a real time system. In advance of this it is imperative that you ensure all employees are registered with Revenue, and that all of your employment and payroll data is correct and up to date. This will ensure a smoother transition into the new system.

It is also advised that if you currently utilise payroll software, to contact your provider to ensure that you are set up for the new system.

Similarly, if you use the services of an accountant for your payroll, it is advised to contact them and ensure that all is in order for the changes ahead.

ROS Digital Certificates:

As we have previously discussed, all Revenue operations will be moving to the online system, it is crucial that you should review your digital certificates and ensure that they have not expired to avoid any delays to your services as these certs must be renewed every 2 years. Ensure that your contact details are up to date so you do not miss any important reminders.

P2Cs:

As discussed above, Revenue will be discontinuing the practise of issuing these, instead you will utilise your payroll software or input Revenue Payroll Notifications (RPNs) onto the ROS system yourself. This system will provide you with all information required to process taxes etc. and will be available from December 5th.

Forms:

As we have discussed previously in relation to PAYE modernisation, forms such as the P45, P46, P30, P35 and P60 are to be abolished in favour of real time reporting.

Further information on how to prepare for the coming year is available on the Revenue website. Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY