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Pandemic Unemployment Payment

Restart Grant / Restart Grant Plus

Payments received by entities:

The Minister for Finance confirmed that Revenue will treat the taxation of these grants differently depending on the purposes for which the grant was used.

Where the grant is used to defray expenditure which is revenue in nature like utility bills or insurance costs then it will be taken into account when calculating the amounts chargeable to income tax or corporation tax.

In essence such grants are taxable income and for accounting purposes the grant receipts will be credited against the expenses incurred thereby leaving the net expense reflected in the accounts which is then allowable as a deduction for income tax or corporation tax purposes.

For example – Insurance premium annual cost paid by company A in the sum of €5,000. Company A uses the proceeds of the grant of €2,500 to part finance the premium payment. A net cost of €2,500 will be reflected in the accounts and allowable as a deduction against profits for tax purposes which reflects the economic reality that the company had a net cash outflow in relation to the premium of €2,500.

Entities should keep a log of the expenditure which they have discharged from the grant receipts which can then be used by the agents to make the appropriate credit entries against the expenditure to arrive at the tax deductible net figures.

Where the grant is used to defray capital expenditure like acquiring plant and machinery for use in the business, then the entity will be entitled to claim capital allowances on the expenditure incurred net of the grant received.

For example – Machine A acquired for €5,000 and proceeds of the grant of €2,500 were used to part finance same.

Capital allowances can be claimed on the net cost of €2,500 at 12.5% per annum.

Revenue have confirmed the above treatment will apply for both the restart grant and restart grant plus

Revenue's Tax Bill

Revenue’s Tax Bill

Since the beginning of the Covid-19 emergency, we have spoken many times about the various supports made available to both employers and employees to help weather the storm. Two of the main supports that was put in place by the government are the ongoing Temporary Wage Subsidy Scheme (TWSS) and Pandemic Unemployment Payment (PUP). The scheme has seen a number of changes since its inception last year, but this month saw many recipients left confused and concerned.

Over 630,000 taxpayers who were in receipt of either scheme will have received their preliminary end of year statements and found themselves facing a tax bill from Revenue. Any individual who was in receipt of either scheme must pay particular attention to their end of year statement as it is likely that there may be an underpayment of tax listed. While Revenue have long stated that this will be the case, this has still come as a shock for many recipients.

These bills have arrived because neither the TWSS nor the PUP schemes were taxed at the source through the PAYE system from March to August 2020. As a result, the employee is seen to have underpaid income tax and USC for 2020. Although tax was not paid during this period, recipients will still be deemed to have made their PRSI contributions, so neither scheme should affect social welfare entitlements.

The scheme which replaced the TWSS in September 2020, the Employment Wage Subsidy Scheme (EWSS), is now taxed through the PAYE system, so no further hefty tax bills should be seen as a result of this scheme.

The brighter news for those who find themselves with a somewhat unexpected tax bill following these schemes is that the bill is not required to be immediately paid, nor required to be paid in a lump sum at all if this is not something the employee can manage. Revenue have said that they will collect the full, or remaining bill interest-free by reducing tax credits over the course of a four-year period, beginning in January 2022, so there will be no need for immediate action.

It is recommended that you complete your online tax return via MyAccount to ensure that all information is correct and that your outstanding bill is also correct, this also allows employees to claim any tax credits or reliefs they may be due in order to reduce the overall bill (for example, the remote working credit is one which is often overlooked).

We hope that this information has been useful for you and as always, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. Please do not hesitate to contact us.

For more information visit revenue.ie

Euro Currency

Employee Wage Subsidy Scheme (EWSS) Update

The first week’s of 2021 may not have held all the solutions or change from 2020 that many had hoped, with many businesses once again closing after a brief opening for the Christmas period, so we wanted to take the time to remind you that we are here and happy to help with any business questions or queries you have. We will also continue to bring you the information to help your business and financial lives, across, what will be hopefully, a brighter 2021.

As we work our way through another lockdown, we find ourselves once again focusing in on the supports available to keep businesses alive during Level 5 restrictions, with the Employee Wage Subsidy Scheme (EWSS) finding itself swooping in to save the day once more.

However, it is vital to highlight the changes to the EWSS since its inception and it’s important to keep yourself informed of the requirements and guidelines for eligibility, even if you are currently in receipt of the scheme. So it is important that you stay aware of what is required:

The Company must:

  • Have a Tax Clearance Cert for the duration of the scheme.
  • Have turnover projections and demonstrate that the business is expected to experience a 30% reduction in turnover between January 1st and June 30th 2021.
  • Show that this reduction in turnover is directly caused by Covid-19.
  • Show that this reduction is relative to the same period in 2019 if the company was in existence prior to this date.

Revenue’s in-depth guidelines can be viewed by CLICKING HERE

When calculating your projections for 2021, we strongly advise you to keep copies of both the projections and the actual turnover figures as they come in, in case Revenue requires them in the future. As always, it is better to be over than underprepared.

Should you have any concerns or queries about these or any other business and financial issues, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. Please do not hesitate to contact us.

Brexit - The Urgent Need To Be Prepared

Brexit – The Urgent Need To Be Prepared

In another lifetime we spoke regularly about the looming threat to Irish business that was Brexit. With the Brexit date of January 1st now fast approaching, Brexit preparations join the long list of issues facing Irish businesses going forward. Irish businesses are currently under more pressure than ever before with the current Covid-19 crisis and with a recent survey by Enterprise Ireland finding that just 42% of businesses feel prepared for Brexit, the time to act and prepare is now.

Taoiseach Micheál Martin has recently stated amidst negotiations that a failure for the EU and Britain to reach an agreement on post-Brexit trade would be “very, very damaging all-round”, and he re-positioned Brexit as an issue economically on par with Covid-19:

“We’ve all had a very significant shock to our economic system because of Covid-19, the last thing we need now across all of our respective economies is a second major shock”.

With this in mind, and despite all other issues currently facing us, we advise early preparation for Brexit, as it is essential to prepare as much as possible. As the relationship between Britain and Ireland is soon to change, there will now be additional hoops for Irish businesses to jump through in order to trade with Britain. This week we will step away from the usual topics associated with Covid-19 and focus on the issue of Brexit and ways in which Irish businesses can be Brexit ready.

EORI Number

As we have recently discussed, one of the most urgent steps that Irish businesses need to take ahead of Brexit is to register for an EORI (Economic Operators Registration and Identification) number. This number is essential for all businesses importing and exporting goods into the European Union. Applications are made through the Revenue Online System (ROS).

Brexit Readiness Checklist

A helpful way of ensuring you have all Brexit bases covered is to check in with your Local Enterprise Office and avail of their ‘Brexit Readiness Checklist’. This may assist you in identifying any areas of weakness that need to be addressed before January 1st and show you the steps that need to be taken to prepare your business for Brexit.

Customs Issues

One of the main changes which will arise on January 1st for Ireland is the new scenario of facing customs issues in trade between Ireland and Britain. As we have long relied on trade routes with Britain, this will be a major stumbling block to be prepared for and will require your product to be priced with this in mind.

The Clear Customs Virtual Training:

One major issue facing Irish trade with Britain going forward will be the issue of customs. As this will be an entirely new stumbling block between Britain and Ireland, it is advised to research and review any areas in which this may be an issue for your business. Many businesses may not deal with customs in house and will need training in this area.

With this area of confusion in mind, Skillnet Ireland has created a new free of charge online training programme (The Clear Customs Virtual Training Programme) to assist businesses in dealing with the increased customs requirements that will arise as a result of Brexit. Advance training will reduce the likelihood of delays and disruptions for customers and business owners.

The programme will be available to all eligible businesses and will be run as part of the “Getting Ireland Brexit Ready” initiative. Visit the Skillnet Ireland website for full information and criteria.

The Ready for Customs Grant:

Enterprise Irelands “Ready for Customs” grant has been set up to provide companies with the financial assistance they may require as a result of Brexit. Once Brexit occurs, companies may incur additional costs in hiring in house customs officials, mobilizing existing staff to other locations for customs related roles. The grant allows for €9,000 to be made available for each full-time employee as well as €4,500 available for each part-time employee. Repayment may be required if it is established that a customs role was not sustained. Applications will be accepted until December 15th via Enterprise Ireland’s online portal. Visit Enterprise Ireland’s website for full details and eligibility criteria.

Deferred Payments:

Deferred payment can be applied for via Revenue and can allow the deferral of the payment of import charges until the month following import. There may be other reliefs available to you, we advise researching via the Revenue site to see what is available.

Communication:

With the issue of customs, open communication will be key. Communicate with your courier’s & logistics carriers so that you have the full picture of your product’s journey going forward. In uncertain times, knowledge is key.

Funding

We have recently discussed the funding opportunities available to Irish SMEs due to the Covid-19 pandemic, and with Covid rightfully taking up so much airtime, it may slip the notice of many that there are still some funding options available to assist in the Brexit transition for Irish businesses.

Brexit Loan Scheme:

The Brexit Loan Scheme is operated by the SCBI (Strategic Bank Corporation of Ireland) and is intended to assist with liquidity issues that may arise as a result of Brexit and makes funds of up to €300 million available to Irish businesses. Applications can be made through the SCBI website.

Ready for Customs Grant:

The Ready for Customs Grant was announced in the July Jobs Stimulus Package. It was announced that Enterprise Ireland would manage a new fund to assist Irish businesses to increase their capacity to manage the new customs processes ahead. Eligible businesses should visit the Enterprise Ireland website for full information.

Brexit Information Hub

In terms of overarching preparedness, it is advised to visit the Government’s new Brexit Information Hub which is intended to help business prepare for Brexit and beyond. This new service is free of charge and provides information, resources and webinars for all businesses.

We hope that this information assists you in some way to get ready for these further business changes. As always, should you have any concerns or queries about these or any other business and financial issues, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. 

Brexit - The Urgent Need To Be Prepared

Brexit – It’s All Customary

It seems so long ago that one of the largest looming threats to Irish business life was the notion of Brexit and the atmosphere of uncertainty that surrounded not knowing what form Brexit was to take. Obviously with the current Covid-19 emergency there are much bigger threats to Irish businesses, but Brexit remains a very real issue that we need to be aware of.

If your business trades directly with the United Kingdom, there will obviously be some changes to your daily business life which it is important to prepare for. From January 1st, 2021, all goods imported into Ireland from Great Britain will be subject customs processes.

As we have discussed previously, one of the most vital ways to prepare for these changes is to register for an Economic Operator Registration Identification (EORI) number, we recommend completing this step ASAP if you have not done it already. This can be done through Revenue’s MyAccount online system.

Once you have your company’s EORI number you must then decide if all customs work will be completed in-house if you feel competent to do so, and have the required software and access to Revenue’s customs systems. If you are not comfortable with completing customs work yourself, you can engage a customs agent to work on your behalf.

We hope that this information has been of use to you and your business, and as always would like you to know that we are here for you and your company at any time should you have any queries.

The SME Credit Guarantee Scheme

The SME Credit Guarantee Scheme

We have discussed Covid-19 business supports at length since the onset of this global emergency, while also discussing the vital nature of the SME area in Ireland. SMEs make up a huge portion of Irish businesses, and whilst last years looming Brexit panic may have seemed like an enormous threat to their business activities, this year has proven the ultimate challenge. With this in mind today we will be discussing another area of assistance for these types of businesses both in the wake of Covid and in the realm of what the new normal will look like.

The SME Credit Guarantee Scheme is intended to encourage additional lending to SMEs, something we can all agree is absolutely essential. This scheme offers a partial Government guarantee of 80% to banks against losses, essentially placing the Government as a guarantor against the SME’s loan. The scheme is aimed at SMEs facing difficulty in accessing traditional lending and is operated on behalf of the Strategic Banking Corporation of Ireland (SCBI) and is accessible from lenders such as AIB, Bank of Ireland and Ulster Bank. These loans are available to fund working capital, refinancing current Covid19 funding and also in order to invest in your business so it can adapt to the current emergency.

Loans range from €10,000 to €1million and can have a term of up to 7 years. A guaranteed premium will apply to be paid directly to the Government. The scheme is available until December 2020. We recommend checking in with your local banking branch for further information and eligibility requirements.

As always, we here at Ecovis DCA are available should you have any concerns or queries on any business or financial matters.

For more information visit Enterprise.gov.ie

The Phased Payment Plan

The Phased Payment Plan – (PPA)

We have dedicated ourselves over the past couple of months to sharing important information with our clients and friends, information which could assist in keeping businesses alive and kicking during such a difficult time, as our country begins to play hopscotch between the levels within the Living with Covid Plan.

As we discussed in recent weeks, a number of extensions have been granted which may assist businesses in filing on time, despite the ongoing challenges posed by the Coronavirus Emergency. It was announced recently that companies would be given more time to pay any outstanding tax bills to Revenue using a payment plan at a discounted rate of interest and would have until the end of September to agree.

Previously the July stimulus package allowed the warehousing of Covid tax debts until a period of reopening, as well as offering a level of amnesty on non-Covid tax debts. This saw a phased payment plan (PPA) enacted by Revenue wherein companies could repay their outstanding dates at a 3% interest rate over a phased plan. The deadline for putting this arrangement in place has now been extended to the end of October, which may allow for many other companies to avail of this plan.

Revenue themselves issued a statement stating that the extension was due to the challenges faced by taxpayers and tax agents during this time, while Collector General Joe Howley state that:

“The 3% interest rate available to taxpayers under this measure is a significant reduction from standard interest rates of 8% to 10% per annum that normally apply to late payments of tax. I strongly encourage the uptake of this opportunity and of the extended deadline that now applies”.

Another bonus to partaking in this PPA is that your company may qualify for tax clearance as a result of utilising this plan of debt payment.

Visit the Revenue site for more information on this and other matters, including a comprehensive booklet here Revenue information booklet .

We hope that this information is of use to you, and as always, we are fully available should you have any queries or concerns on any business and financial matters.

Revenue Irish Tax Firm

Important Tax Deadlines 2020

We are living and working through some challenging times at present with a need to adjust to a ‘new normal’ which can be as difficult in the business world as it is in our home lives. As always, we here at Ecovis DCA want to help our clients and friends stay up to date, and have compiled the current tax return deadline changes we believe you may need to be aware of.

In light of the current public health situation, any shift in deadlines may make all the difference to your company. In addition to the below, it is worth noting that the HMRC are currently readying for Brexit, if your company has dealings with the United Kingdom, it would be wise to stay up to date on any changes here. In these volatile times, any shift in deadlines can be a massive boost to companies.

Income Tax:

The Government have recently stated that income tax will remain unchanged in the coming Budget. The deadline for self-assessed customers filing online will be extended from November 12th to December 10th.*

Corporation Tax:

Revenue recently announced a 4-week extension of the online filing system for Pay and File customers. The new date for customers submitting their 2019 self-assessment online will be Thursday, December 10th. Those not paying online must still file by October 31st. In addition to this change, Revenue has confirmed that the deadline for Corporate Tax return surcharge suspension will remain September 23rd.

Gift Tax:

Revenue has also announced that they will be extending the filing deadline for beneficiaries of gifts or inheritance for the year ending August 31st, 2020. This deadline has been shifted to December 10th for customers to make their CGT return, and as always this must be done via the Revenue Online System (ROS).

Local Property Tax:

For the third time, the reevaluation date for Local Property Tax has been deferred. The new date has been set as November 1st, 2021. This deferral is intended to bring forward legislation on the basis of fairness, bring new homes previously exempt into the system and to ensure that all monies collected in a given county will stay within that county.

Carbon Tax:

Minister for Finance, Paschal Donohoe has stated that he intends to repeat last year’s change to carbon tax and reinvest funds into areas that will assist with climate change.

*Please remember that these deadline extensions apply only to those filing online via ROS. If you are not filing online, your deadlines of October 31st will remain unchanged and failure to file on time may result in disciplinary action.

We hope that this information will be of use to you and that if these extensions are the wiggle room your company needs. As always, we here at Ecovis DCA are here for you. Should you require any assistance or guidance on any business or financial matters, please do not hesitate to contact us.

5 Tips for leading your company out of a crisis

Getting out of a crisis is difficult and requires extraordinary measures and great efforts from a company and its people. Since we’re here to help, we’ve listed 5 tips for leading your company out of a crisis or turnaround situation. Read on and make smart use of these tips.

1. Identify (and solve) the problem

The first step to overcoming a crisis is to identify the main problem that caused it. You can’t deal with a crisis until you determine its core issues. It can be caused by internal factors such as poor financial assistance by management accountants or external factors such as natural disasters like the COVID-19 pandemic. To solve the causes of underlying problems, you should analyze the common signs of distress listed below.

Distress signals

  • Declining or negative cash flow;
  • Declining stock price;
  • Regulatory inquiries;
  • Large or unplanned workforce reductions;
  • Increase in outstanding accounts payable;
  • Resignations of key finance staff;
  • Management turnover;
  • Shrinking EBITDA (Earnings before interest, taxes, depreciation and amortization) margin.

2. Find (and retain) talented people

One of the few good sides of a crisis is that the opportunity arises to find the next level of talent in an organization. As a turnaround manager, you should look beyond the leadership team for people with institutional knowledge. They know all the ins and outs of the company and are essential to realizing the impact of potential changes on the business. Be aware though, in many cases, they are the dissatisfied ones, unhappy with the company’s performance. But because of this, they are willing to point out the painful truths – and that’s just what needs to be done on the road to leading a company out of a crisis.

You should also keep an eye out for people that want to add value and impact. In most cases, you won’t find these people sitting around the table at the beginning, but two or three levels down – waiting for an opportunity to be part of something greater than themselves. Retaining these people isn’t always about money and bonuses: it’s about figuring out their individual needs and get them involved.

3. Approaching financial experts

A crisis is usually not the result of a single decision but an accumulation of multiple unsound decisions. Trying to deal with it by yourself and not asking for help can be an unsound decision. Financial advisors are adept at solving cash flow issues that are stifling the growth of an organization. Their strategies can be useful in a crisis scenario that requires you to make hard choices as well. Getting help from experts such as chartered accountants and business support advisors can lead your company out of a crisis.

4. Concentrate on cash

In general, the board and management of most companies focus on complex, long-term metrics like EBIT and turnover. There’s nothing wrong with that, but unpleasant surprises are waiting when no one is concentrating on cash, especially during a crisis. So, the opposite needs to be done to keep a company financially healthy. The best way of doing this is by finding out which investments are making or burning cash, and by subsequently bringing your business back to its fundamental element of success.

Monitoring your cash flow will help you understand your company’s income and expenses. Every asset the company owns, from investments, physical assets to services rendered should be numbered and assessed for monetary value. When going through a crisis, it is critical to make sure employee salaries, credit payments and invoice payments can be met. You should also consider loans to ease through the current deficit. But make sure to not burden yourself further since banks and other financial institutions charge high interest on loans.

5. Dare to criticise your own business plan

The best thing you can do to avoid distress is to periodically review your business plans and see how the company scores on operational and market performance. Find out where you stand as a company using essential financial and cash flow milestones, and do the same concerning your business and competitors. If that shows that you’re not moving with – or outpacing – the rest of the industry, then your business plan may be out-of-date.

Conclusion

According to recent reports, the corporate crisis has increased in Ireland due to the recent COVID-19 pandemic. Getting out of a crisis may take some time and effort since it can’t be controlled instantly. At last, don’t forget to analyze your past mistakes, get help from experts like business advisors and accountants, make an effective strategic plan and manage your company’s finances. By following the steps mentioned above, you will be able to recover and overcome the ongoing crisis.

Limiting the Impact of Cybercrime

This new crisis of Covid-19 presents a number of unforeseen challenges to companies, with many needing to create a new standard for working remotely, or where this is not possible the requirement becomes to seek funding, reduce employee numbers/hours or close temporarily.

One of the more unexpected challenges of this time is the resurgence of cybercrime. Cyber criminals tend to utilize major news events as an opportunity to mount a criminal campaign and the Covid-19 crisis is no different. This campaign can take many forms. One of the most common at present being the false emails issued regarding a change of banking details, luring the receiver into issuing payments to the wrong account at what is already a deeply difficult time for companies.

Des Ryan, solutions director for Microsoft Ireland has explained this new resurgence is an attack of opportunity as cyber criminals tend to prey on events which may weaken the defences of a business, in this case the shift to remote working situations.

“Cyber criminals are opportunistic […] we are definitely seeing Covid-19 related attacks as attackers are just using this to find the weak link.”

It is also suggested that cyber criminals are merely adapting their usual tactics to profit from the current crisis. The current breed of cyber criminals is known for sending false emails detailing a change of bank details or requesting a change to Revolut (which would ensure that the funds are transferred with immediate effect). There have also been a number of fake charity accounts set up purporting to benefit the current Covid-19 crisis. These criminals are preying on companies who may not have been prepared to work remotely and have had to set up a temporary system quickly and without training and protection in place and targeting staff members who are now outside of their comfort zone and possibly distracted with their surroundings. Utilising personal laptops and phones etc. may also be a point of weakness as these will not be as secure as those in the workplace.

Many are already feeling the strain of this current atmosphere of anxiety and so it seems We are all protecting our staff health during this time, but how can we protect the digital health of our business at what is already an intense time?

  • Consider setting staff up with work laptops and phones where necessary. This will ensure that the devices are as protected for home use as they are within the office environment. Having equipment to hand that requires multi-step authentication will provide extra security.
  • Where possible, if a work laptop is not issued, staff should try to ensure that the computer is used only for their work during this time if they deal with sensitive information.
  • Online security training may be a good way for staff to utilize this possibly quieter time to upskill.
  • Remember and remind your staff of the basics of verifying the origin of an email or phonecall before dealing with any bank details. Often, false emails can be incredibly convincing until you hover over the email address and notice that it isn’t correct.
  • Ensure that all staff are aware of these targeted campaigns and are extra vigilant when dealing with any bank details or personal details.

We hope that this information will be of benefit to you and your company and that you and your staff are staying healthy and well in these difficult times. We are as always available should you require any advice or guidance on any business of financial matters.