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2019 Economic Crystal Ball Gazing

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 PARTNERSDECLAN DOLAN & EAMONN GARVEY

PAYE Modernisation – Part 2

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 PARTNERSDECLAN DOLAN & EAMONN GARVEY

PAYE Modernisation – Part 1

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 PARTNERSDECLAN DOLAN & EAMONN GARVEY

Where to now for Brexit?

The Swings and Roundabouts

After a period of relative silence on the topic, Brexit has quickly become a hot conversation topic once more in recent weeks as Brexit talks begin to ramp up. Despite the constant chatter, however, there have been no official announcements or updates on what we can expect from a final Brexit decision. Naturally, this has caused an atmosphere of concern and uncertainty, particularly for our own minute island as questions about border issues, and difficulties in trade swarm around us and we remain uncertain about our place in all of this. As we have discussed recently however, many Irish companies appear to be thriving in this uncertainty and beginning the process of protecting their business against any potential fallout. Something we have learned from this continued confusion is that Irish companies show great resilience in the face of adversity and have attempted to learn the lessons enforced by the economic downturn.

Recently, there have been growing concerns about the impact Brexit could have on our already troubled housing sector. We have spoken at length in the past about the housing sector as rents continue to rise and many are being elbowed out of any attempts at gaining a foothold on the property ladder. It was announced this week that the Economic, Social and Research Institute (ESRI) believe that the country should make itself ready for Brexit to have an effect on housing, as they expect private sector construction to drop, encouraging the Government to invest more in social housing. It is also believed that rent increases will continue to spiral, leaving many more families in need of support. As well as the ESRI, the Nevin Economic Research Institute feels that housing issues will fluctuate massively following Brexit and that demand will reach an all-time high. It was reported this week that both bodies will present TDs with their findings on November 20th.

Head of Economics with the ESRI, Kieran McQuinn has stated that the Housing Assistance Payment may become the main income support for private renters in the wake of Brexit:

“If income and employment growth are slower than anticipated due to Brexit, the numbers of families that qualify for HAP over the coming years will likely be higher than currently expected,”

Mr McQuinn also believes that demand may decrease but that this may not have the expected positive implications. Meanwhile, the ERSI have highlighted that mortgage arrears remain an issue in Ireland, and that following Brexit, these arrears may continue to increase.

There is some mild good news on the horizon for prospective buyers, however as Mr McQuinn of ERSI has stated that Brexit may have the effect of slowing the increase of mortgage interests rates, which would in turn finally see some levels of affordability return to the Irish housing market.

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 PARTNERSDECLAN DOLAN & EAMONN GARVEY