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How to Calculate Annual Leave Entitlement

Annual leave can be a tricky area for employers to navigate, particularly with regard to employee contracts or those leaving the business. In this article we answer some of the most frequently asked questions, helping to provide employers and managers with a better understanding of the calculations behind annual leave entitlement. Firstly, let’s cover the basics The legislation provides a basic annual leave entitlement of 4 weeks. If the normal working week is 5 days, the employee entitlement is 20 days. However, if the normal working week is 6 days, the annual leave entitlement is 24 days. There are 3 different methods for calculating the duration of the annual leave entitlement.
  1. Based on the employee’s working hours in one year. An employee who has worked at least 1,365 hours in the leave year is entitled to the maximum of 4 working weeks’ annual leave.
  2. By allowing 1/3 of a working week for each calendar month in which the employee has worked at least 117 hours.
  3. 8% of the hours worked in the leave year, subject to a maximum of 4 weeks.
How do you calculate holiday pay? Firstly, if the employee is paid by salary or by time rate, the amount due for one week of annual leave will be the amount paid to him/her for a normal working week prior to the commencement of holidays. In cases whereby the amounts are variable for a normal working week (i.e. commission), the average of the last 13 weeks immediately prior to taking the leave should be used to calculate the amount. This payment includes any regular allowance and bonus but does not include overtime. What are the holiday pay entitlements when my employee leaves? When your workers leave a job they must receive pay for any statutory leave they are entitled to in the current leave year but have not taken. You can calculate this using our convenient Annual Leave Days Calculator below. [CP_CALCULATED_FIELDS id="1"] You will need to consider the total annual leave in days, the total amount worked in months and the amount of leave taken in days. The calculator will display the number of days due to the employee upon leaving the business.   Can annual leave be carried forward to the following leave year? The employer must ensure that employees take their annual leave entitlement within the leave year or, in exceptional circumstances, within six months of the following year with the employee’s agreement. It is the responsibility of the employer to ensure that employees take their full statutory leave allocation within the appropriate period. Can an employer pay in lieu of annual leave? The Act does not allow an employer to pay an employee in lieu of annual leave. The Act only provides for payment in lieu of annual leave where the employment relationship is terminated. Please get in touch if you have any further questions with regard to annual leave entitlement and we’ll be glad to assist you. Our dedicated Payroll team provide a number of clients with Payroll services using a wide variety of methods.We have the systems in place to facilitate your business with a reliable service at a competitive rate.  Please contact us via the live chat icon to discuss outsourcing your businesses Payroll.  
July 23, 2019
  Business Advice

Are you a UK Based Director of an Irish Registered Company?

While the potential deal or no deal scenarios of Brexit continue to play out, a very real risk has arisen for a number of companies and their Directors in the UK and Ireland. Although there are more than 60,000 Irish Directorships of UK registered companies there are also a significant number of UK based directors of Irish companies for which Brexit will create significant changes. In this article, Roberts Nathan Partner Aidan Scollard reviews the potential significant changes for UK resident Directors of Irish registered companies where the UK becomes a third country to current EU legislation. EEA Resident Director Requirement Companies Registration Office have alerted service providers to the fact that under Irish company law an Irish registered company must have at least one European Economic Area (EEA) resident director on the board on an ongoing basis. Many Directors based in the UK who are either of Irish decent or UK based companies who have established Irish entities as part of their Brexit planning will need to consider this likely change. Where an existing Irish company has fulfilled this Director requirement by appointing a UK resident director they should now consider replacing that director or adding an additional director who is an EEA-resident. It should be noted that this requirement is based on residency, not nationality. Thus for example, a company director of Irish nationality who lives in the UK and has done so for a number of years is unlikely to satisfy the EEA requirement in the future which is a question a number of our clients have been considering. S137 Bond It is possible for a company to put in place a Section 137 Revenue Bond which is an insurance policy that CRO approve in replacement of having an EEA resident individual on the board. This insurance policy covers against fines or penalties incurred to the value of €25,000 for non-compliance and covers the company for a period of two years at which point the company will either need to renew the bond or appoint a director who meets the requirement. The bonds are relatively easy to put in place but will have a premium cost to maintain for the two year period and which we have put in place for a number of clients recently. The Exception to the Rule – ‘Real and Continuous link’ It is possible for the Directors of an Irish Company who have no EEA-resident directors to apply to the Revenue Commissioners for a Statement under Section 140 of the Companies Act 2014 which, if granted, will relieve the company from the requirement to hold a Bond or to have an EEA-resident director. This Statement is granted based on the company having a ‘real and continuous link to the State of Ireland’. The successful company will need to satisfy one or more of the following two conditions:
  1. The affairs of the company are managed by one or more persons from a place of business established in the State and that person or those persons is or are authorised by the company to act on its behalf.
  2. The company carries on a trade in the State.
Furthermore, a company may be granted this Statement based on either of the following two conditions:
  1. The company is a subsidiary or a holding company of a company or other body corporate that satisfies either or both of the conditions specified in 1 and 2.
  2. The company is a subsidiary of a company, another subsidiary of which satisfies either or both of the conditions specified in 1 and 2.
This Statement is granted based on retrospective activity and will generally not be granted to a company that intends to have a real and continuous link to the state. Once the Statement is made by Revenue to the successful company, the Company Secretary can apply to the Registrar of Companies for a certificate that exempts the company from the Section 137 bond requirement or the need to have an EEA-resident director appointed to the board. Application for this exemption to Companies registration office must be accompanied by this statement from the Revenue Commissioners made within two months of the date of the application of the Revenue Commissioners statement. We have helped a number of clients in this area where they can clearly prove that there is a real and continuous activity here in the Irish state. Final Word Company Directors need to consider the implications of the UK leaving the EU and consider their options. As with any legal or accounting issue forewarned is forearmed. Contact us if you wish to discuss the impacts of any of these potential imminent changes to your company structure and planning requirements.
July 9, 2019
  Business in Ireland

What is KEEP and when is it most effective?

Acquiring and retaining key members of staff is arguably the greatest challenge facing Irish based employers currently. Incentivising employees, whilst securing adequate levels of protection for both the business and it’s key stakeholders is a balancing act that most growing businesses face. Employee incentive plans can be structured using various methods including share-based remuneration. Tax treatment is often one of the most important considerations and a key factor to the implementation of a successful programme. The Key Employee Engagement Programme (KEEP) offers a solution to employers who wish to award employees with the opportunity to earn an incentive bonus without them necessarily becoming long-term shareholders in the company. How the programme works KEEP applies to qualifying share options granted between 1st January 2018 and 31st December 2023. The programme entitles employers to award a bonus incentive, contingent on appreciation of the company’s share price value that is not subject to Income Tax, PRSI or USC. Instead the employee is subject to capital gains tax (CGT) (currently 33% as opposed to a potential for 52% under Income tax treatments) on the ultimate disposal of the shares. The shares must be fully risk-bearing, unquoted, ordinary shares that carry no preferential rights to dividend or value.  The employee is granted an option to acquire the shares at market value and if, by the time the employee exercises the option, the shares have increased in value, they are not subject to Income tax on the increase at that time. The option cannot be held for longer than 10 years and cannot be exercised within the first 12 months of the grant. The option must not exceed 50% of the employee’s salary or €100,000 per annum. Furthermore, the total options granted to an individual employee over a three-year period must not exceed €250,000. Qualifying Criteria The qualifying employee or director must be required to work more than 30 hours per week in a position that is capable of lasting for more than 12 months. In addition the employee or director cannot own more than 15% of the ordinary share capital of the company. The qualifying companies must be classified as micro, small or medium sized enterprise. While there are also some additional restrictions on certain industries and company structures. When is KEEP most effective? There is no doubt that providing employees with an option to benefit from future share price appreciation is an innovative approach which further incentivises the employees to perform. However, as with any share-based remuneration scheme, much of the success will be determined by the method used to implement the scheme and by having clear objectives in place for implementing the scheme. We can assist you with the necessary professional guidance to ensure your KEEP programme implementation is effective and successful. The most effective use of KEEP is when the objective of the employer is to extend the benefits of share-based remuneration to a wider group of employees without them necessarily becoming long-term shareholders in the company.  Once the employees exercise the option there is no requirement for them to retain the shares for a minimum period of time. In practice, employees tend to quickly sell the shares to realise their value meaning employers can continue to extend the option to a wider group of employees without greatly expanding the shareholder base. If you are thinking of developing an employee incentive scheme using KEEP or other schemes, please contact us for assistance.  
June 25, 2019
  Business in Ireland

Top 5 Reasons to Establish Your Business in Ireland

Ireland offers a flexible and competitive regime to companies who are looking for a location to structure European operations. Countless international groups use Irish holding companies to hold other subsidiaries and conduct M&A activities. With Brexit now looming, Ireland is set to thrive as the only English speaking full member of the EU. In this article we explore the top 5 reasons to establish your business in Ireland. Skilled Workforce Ireland has one of the most educated workforces in the world with one million people in full-time education. As an English speaking country with direct access to the EU labour force of approximately 250 million people, over half a million Irish residents now speak a foreign language fluently. Ireland is also number one in the world for the availability of senior management talent, many of whom gain employment with the multi-national companies based in Ireland. Tax Benefits There are many tax benefits for companies investing in Ireland, either with fully fledged trading operations or global holding company structures. We outline some of those benefits here. Ireland’s low rate of corporation tax (12.5%) is half the OECD average. Knowledge Development Box (KDB) 6.25% tax rate is available on development activities carried out by an Irish Company. Research and Development (R&D) benefits from 25% tax credit, tax depreciation on acquired or capitalised Intellectual Property (IP) and a competitive holding company regime combine to offer your company an unrivalled location of choice for inward investment. Connectivity Extensive transport links between Ireland to Europe and the rest of the world and US pre-clearance facilities at Dublin Airport and Shannon Airport, the only ones of their kind in Europe, make Ireland one of the most connected countries to establish a business. Quality of Life With 33% of Irish citizens under the age of 25 and almost half under the age of 34, Ireland has the youngest population in Europe. Ireland has unrivalled heritage, culture and impressive natural landscapes, all within close proximity to the busy cities of Dublin, Cork, Galway and Limerick. This is ideal for escaping the city noise after a busy week at the office. Government Programmes Additional to the generous tax benefits on offer, government programmes are available to companies looking to establish a base in Ireland. The Special Assignee Relief Programme (SARP) provides Income tax relief, of up to 30%, to employees who are assigned to work in Ireland from abroad. This programme was designed to help companies provide key employees with incentives to relocate to Ireland. The Key Employee Engagement Programme (KEEP) offers further benefits to employers who wish to award employees the opportunity to earn a bonus based on the share price performance of the company, without them necessarily becoming long-term shareholders in the company. Ireland is home to many of the world’s leading high-performance companies including Amazon, Intel, Pfizer, Citi, Fujitsu, Apple, Dell, Twitter, Facebook and Google. The country is positioning itself to become a world leader in Health Innovation, Cloud Computing, SAAS, Big Data, ICT Skill, Sports Tech, Energy Efficiency and Internet of Things. Over 1,200 overseas companies call Ireland home
  • 1 in the world for investment incentives and inward investment jobs per capita.
  • 1 for flexibility and adaptability of people.
  • 1 for European investment from US.
  • 7 of the top 10 global software companies based in Ireland.
  • 10 of the top 10 pharma companies based in Ireland.
  • 8 of the top 10 industrial automation companies based in Ireland.
  • 14 of the top 15 global aviation lessors have operations in Ireland.
  • 19 of the top 25 financial services companies are in Ireland.
  • 14 of the top 15 medtech companies based in Ireland.
Figures provided by IDA Ireland Our Areas of International Expertise
  • International Company Structuring
  • International Strategic Planning
  • Company Formation & Maintaining
  • Annual Statutory Financial Statements
  • Preparation and Submission of Annual Returns
  • Provision of Corporation Tax Returns
  • Provision of Registered Office
  • Provision of Company Secretary
  • Maintaining EEA Directorships
  • Assistance with opening a company (Euro) bank account
  • Payroll Solutions
  • VAT Compliance
  • Other Business Advice
If you are considering locations for structuring your company’s European operations, Ireland has a lot to offer in this regard. Please
get in touch with one of our International Business experts to discover how we can best assist you in this process.  
June 11, 2019
  Corporate Structure

Have You Reviewed Your Corporate Group Structure Lately?

Corporate group structuring is often an attractive way for organisations to acutely position themselves to drive greater levels of financial growth. For example, the creation of a subsidiary company, which acts as a separate legal entity allows for diversification within the group and can provide a vehicle for holding companies to enter into acquisitions or joint ventures.       Group structuring can also provide tax and debt structuring benefits to the overall corporate group. In particular, utilisation of finance subsidiaries within a corporate structure will help to mitigate the risk of the parent company for subsidiary debts and can also act as a tax shield when subsidiary loans fail. Why Review Your Corporate Structure? A review and overhaul of a group structure can bring many benefits, including cost savings, reduced management time and improved efficiency. This may be undertaken following planned changes such as a refinancing, in connection with tax-driven changes, as part of a corporate governance initiative or following Mergers & Acquisitions. It is essential that directors are aware of the legal and business risks inherent in corporate group structures. Additionally, corporate groups must be structured to reflect the group’s needs and should implement appropriate governance procedures that delineate responsibilities and authority. At Roberts Nathan, we assist clients in reviewing their corporate group structure and highlighting any existing threats or opportunities. Please do not hesitate to contact us to discuss planning for your corporate group structure.
May 28, 2019
  Business Advice

Thinking About Selling Your Business?

Selling a business is time consuming, emotive and can be costly if not executed correctly.  As our economy continues to prosper there is increased interest in small and medium enterprises across all sectors. This coupled with the availability of funding makes it a great time to consider an exit strategy Once you have decided to sell the hard work begins!  In this article we explore a range of considerations when selling a business.


Preparation is key to achieving the best value. The preparatory phase is when you should engage with your advisor and carry out a thorough review of the business and it’s value drivers. Ask ‘why would someone want to buy my business’ and then focus on this.   Prospective purchasers will demand transparency, so dealing with potential red flags and ‘deal breakers’ in advance of the buyer due diligence process will help protect value.   Telling your business’s story is important and understanding how to present it’s financial information, both historic and forecast is a crucial element of the process. What is the succession plan? With many owner managed businesses the owner is the business. A potential buyer will attribute little value to a business where it’s driving force (the owner) will be exiting or retiring in a short period after sale.   Tax planning in advance of sale will protect value. You should firstly consider the shareholder structure. Is there an opportunity to get family members (children and siblings) involved? Is there an option to claim retirement relief or entrepreneur relief or through a holding company group structure to claim participation relief on exit?

Identify prospective purchasers 

Understanding and researching the potential buyers for your business is a very important part of the process. Every business owner will be able to name a number of potential buyers, be that a management team or a key competitor. However there might be other potential buyers who may not appear on a list, who may have other strategic reasons for buying and may pay a premium for the business, i.e. new market entry, to acquire IP or to gain access to resources (e.g. people).   Keeping the process confidential during these early stages is important as it may ‘spook’ potential customers or suppliers and may unsettle key employees. Having an advisor on board will help maintain confidentiality.  

Negotiating the deal   

Once potential purchasers are identified they may enter a period of limited due diligence. A lot of valuable insight can be gained during this period for the seller in terms of how the due diligence is conducted the type of queries and questions raised. Having this insight early will help in the price negotiation phase.    You should never name your price, solicit offers for potential acquirers setting strict deadlines for offers. It is important that the seller maintains control of the process at this stage.  A second round of offers maybe required until a preferred bidder is selected after which they may enter a period of exclusivity to carry out a more detailed assessment of the company.    This selection criteria should not be based on price alone and factors such as the ability to execute the deal and sources of funding should also be considered.     

Closing the deal  

Negotiating the transaction documents is the final part of the process and also very important for both buyer and seller protection.  Considerations will need to be given to the deal structure. Will part of the consideration be based on an ‘earn out’ from future profits? Will the owner manager be required to remain with the business for a period post sale to help with handover of relationships and integration?  The sale process is a time consuming and involved process for the business owner and often management teams are distracted by the process taking their ‘eye off the ball’ to the detriment of the business. Getting your advisers involved early in the process will help avoid many of the common pitfalls and ultimately protect the value that in many cases has been built up in business over many decades. At Roberts Nathan we have a wealth of experience advising owner mangers through the transaction process both on the sales side and buy side. Please contact us if you would like to understand more. 
May 17, 2019

CRO set key dates for the Register of Beneficial Owners

A statutory instrument establishing the much anticipated Central Registrar of Beneficial Ownership of Companies (RBO) was signed into law by the Minister for Finance, Paschal Donohoe on the 22nd March 2019. Timelines are now set and companies can expect to be contacted by the office of the RBO with regard to their filing obligations over the coming weeks. When will the RBO accept online filings? In accordance with the SI, the RBO will begin to accept on-line filings from 22nd June 2019, after which there will be five months for companies and Industrial and Provident Societies to file their RBO data without being in breach of their statutory duty to file. The office of the Registrar of Beneficial Ownership (RBO) will contact each company and Industrial and Provident Society about their filing obligations in the coming weeks. The RBO website will be launched on 29th April which will provide further information. Key Dates
  • 29th April 2019 – The RBO will launch an official website to provide further guidance.
  • 22nd June 2019 - The RBO will start accepting online submissions via live portal.
  • 22nd November 2019 – This will be the last date for companies formed prior to June 2019 to submit their details.
Companies incorporated after 22nd November 2019 will have five months to submit their details without being in default. If you would like assistance in submitting your details to the RBO, please don’t hesitate to get in touch and we’ll be glad to provide you with further guidance.   
April 10, 2019

New “One Step” process for annual return deadlines introduced by CRO

The Companies (Amendment) Bill 2019 was published in January 2019 and proposes to change the Annual Return Deadlines for Irish Resident Companies. These new filing dates will directly impact every Irish company and is likely to become law in just a few months. Current ‘Two-Step’ Process Currently, there is a ‘two-step’ process for the companies to meet their reporting obligations. The annual return must be electronically filed to the CRO within 28 days of the Annual Return Date. Once this step has been completed, the company is allocated a further 28 days to submit their Financial Statements. Proposed New ‘One-Step’ Process: It is proposed to change the annual return filing deadlines to a “one-step, 56 day process”. While the new ‘one-step’ process does not provide companies with any additional time, it does allow for companies to avail of a continuous 56 day period to:
  • Electronically file the annual return,
  • Upload Financial Statements, and
  • Deliver any signature pages to the CRO.
When will the New Deadlines come into effect? It is proposed that the new system will be implemented in early 2020. This will result in a new filing software system replacing/updating the CORE platform. The CRO has also indicated that the new system will allow for digital signatures, this will speed up many of the CRO processes. How will this impact your company? The new ‘one-step’ process will allow companies a straight 56 day period to complete their filing obligations. It also means that the current 28 day deadlines will be removed, and therefore companies are less likely to incur late filing penalties. The new ‘one-step’ process aims to simplify the annual filing obligations for companies and to encourage compliance. If you are concerned about your company’s CRO obligations, please do not hesitate to contact one of our Audit & Compliance experts, they will be happy to help!  
April 2, 2019
  Business Advice

Save Time and Money with Our Complete Payroll Service

In today’s competitive business world, it is important to make the most effective use of time.  Outsourcing routine tasks, such as payroll, means you have more time to focus on your business. If you’re doing your payroll in-house, it can be both time-consuming and complicated. And keeping up with PAYE Modernisation and tax changes can be an added headache. We have an established a dedicated payroll department, headed up by Susan Lennon who has over 20 years’ experience. We have well-trained staff and we use the very latest software packages which are fully compliant and integrate seamlessly with the Revenue Commissioners system.          

Our Payroll service includes:

  • The benefit of a dedicated payroll team.
  • A computerised payroll system that streamlines the entire payroll process.
  • Options for weekly, fortnightly or monthly payroll runs.
  • Submission of all statutory returns required by the Revenue Commissioners in line with the new requirements introduced under PAYE Modernisation in January 2019.
  • Paperless delivery – with all authorisations carried out via email to make life easier for you.
  • Payslips emailed directly to employees, saving you time.
  • A smooth transition from your old system to one that is simple and stress-free.
We would love to help you make your payroll more efficient. Let’s get started - Tell us a little about your business and payroll requirements.

Would you like to consider outsourcing your payroll?  

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March 29, 2019