Finance Bill 2022
On 3rd November 2022, Brendan Murphy, tax partner at Roberts Nathan, analysed the Finance Bill as part of the annual Irish Tax Institute's Finance Bill seminar. A few of the key items discussed on the day were: 1. Full details of the Temporary Business Energy Support Scheme which will apply from 1st September 2022 to 31st December 2022; the first claim for which will be due by the end of January 2023. 2. The impact of the changes to the R&D tax credit and the cash flow impact of the new refund process. 3. New proposal on returns required by employers of reportable benefits provided to employees. For more information, please contact Brendan Murphy. [video width="1280" height="720" mp4="https://www.robertsnathan.com/wp-content/uploads/2022/11/RN_Finance_Bill.mp4" autoplay="true"][/video]
November 7, 2022
Are You Thinking Of Selling Your Business?
As the owner manager of a business, which you have spent a lifetime building, the thought of selling it is a very daunting prospect. It is critically important that you get the best possible price for it and that it will ideally continue to trade into the future under control and directorship of new owners. A number of key steps need to be taken in order to sell your business, including:
- Valuation of the business.
- How to structure any potential sales deal.
- The best way to advertise the business and which potential buyers should be prioritised as possible purchasers.
- The best time to sell.
- The formality of due diligence and legal matters involved.
- Executive Summary
- Background to the Company
- The products or services offered together with an outline of the business model in operation
- Details of the customers and market in which the company participates
- Future opportunities attached to the business going forward
- Key financial information and financial forecast, reasonably reflecting how the company is expecting to perform in the next one to three years.
June 21, 2022
Have you Planned out your Payments for the Debt Warehousing Scheme?
During the pandemic, the Government introduced a number of measures to help companies and individuals who were facing cashflow difficulties. One of the helpful and widely used measures introduced was the debt warehousing regime whereby companies and individuals could warehouse their VAT, PAYE and Income Tax liabilities that occurred before 31 December 2021. The main points of the debt warehousing scheme were as follows;
- The scheme allowed for the deferral of unpaid VAT and PAYE debts for businesses restricted from trading due to the Covid-19 pandemic for a period of 12 months after a business resumes trading.
- The debt warehousing scheme also applied to Income Tax. This allowed for the warehousing of the Income Tax liability falling due on 31 October 2021 which comprised of the balancing payment due for the 2020 Income Tax year and Preliminary Tax due for 2021 Income Tax year.
- The debt warehousing scheme was also expanded to include the recovery of any overpayment of the TWSS and EWSS which was paid to employers during the pandemic.
May 24, 2022
Dealing with Inflation: Advice for Business Owners
Current inflation factorsThe Irish economy is going through an unprecedented period of inflation. This was initially driven by supply chain hangovers from COVID 19, which saw prices of building materials, materials for cars and increased costs of consumer goods. Since the start of 2022 there has been further inflationary pressure mainly as a result of the Russia/Ukraine conflict. This has resulted in a dramatic increase in energy costs and food product costs. Annual inflation in Ireland neared an almost 40-year high of 6.7% in March, a jump from 5.6% a month earlier. Diesel and petrol have increased by 46% and 35% respectively year-on-year while food prices rose by 3.1%. Electricity prices were up 22.4% while gas prices rose 28%.
OutlookThe Central Bank predicts that price growth will peak at 7.7% in the second quarter of 2022 before retreating to 5.1% towards the end of the year. SME’s have endured a turbulent few years as a result of COVID 19 and are still dealing with legacy issues as a result of the pandemic. There is now an additional headache as they navigate inflationary increases.
What companies need to consider
- How to deal with any Revenue warehoused debt
- A significant amount of SME’s took advantage of the Revenue debt warehousing scheme. The interest free period comes to an end on the 31 December 2022 and companies will need to engage with Revenue and agree as to how they intend to deal with these liabilities.
- As a result of inflationary pressures margins for businesses are likely to come under pressure due to:
- Higher raw material costs
- Higher energy costs
- Upward pressure on employee wage costs as staff deal with a higher cost of living
Steps companies need to take now
- Preparation of reliable management information will be crucial to help companies deal with the current headwinds. This information should include:
- Up to date Management Accounts
- Cashflow and Budgets which reflect accurately any cost increases and are reasonable in terms of increases in turnover.
- Engage with Revenue and agree how warehoused taxes are to be dealt with.
- In a high inflation economy, it is important to engage with suppliers and lock in prices as early as possible.
- Engage with customers / clients early and flag increased prices. Any lag in passing on price increases will affect margins and profitability.
How Roberts Nathan can helpWe have been assisting many of our clients recently with their plans to navigate through this challenging time with the preparation of the above-mentioned Management Accounts and Budgets. If you are concerned about these current challenges and would like to consider availing of these services we would be delighted to assist you. If you would like to discuss the above you can contact Brendan or email us at email@example.com Contact Us
May 11, 2022
5 Planning Steps To Take Before Preparing Your Business For Sale
If you want to make selling your business simple, consider this fundamental principle: You must work each day preparing your business for sale. It makes no difference whether you intend to sell your business or not. The point is that preparing your firm for sale long before you’re ready to sell can boost its health while also making it more appealing to potential purchasers. You will also be preparing your business for sale quickly. There are things you can do to increase your chances—and the sale price—whether you want to sell your firm now or later. To get a great price, follow these five steps.
- Step 1: Learn to discover and recognise strategic buyers
- Step 2: Instead of focusing on debt, concentrate on profitability
- Step 3: Resolve any pending legal actions or liens
- Step 4: Reduce your business expenses
- Step 5: Be the one who is difficult to obtain
October 20, 2021
The Process To Think Through When Selling Your Business
Selling a business is time consuming, emotive and can be costly if not executed correctly. As we emerge from the rollercoaster of lockdowns over the last eighteen months, our economy is starting to roar back into life, and as a result, there is an increased interest in SME's across all sectors from both trade and private equity buyers. This, coupled with the availability of both debt and equity funding, makes it an opportune time to consider an exit strategy. In this article, we explore a range of considerations when selling a business.
PreparationPreparation is key to achieving the best value. The preparatory phase is when you should engage with your adviser and thoroughly review the business and its 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 businesses story is essential and understanding how to present its financial information, both historical 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 company where its driving force (the owner) will be exiting or retiring in a short period after the sale. Early tax planning protects value. The shareholders should consider the tax implications in advance of the process as time is of the essence where restructuring is required to effect a tax plan. Early key questions to be answered;
- Is there an opportunity for family members (children and siblings) to be involved in utilising tax reliefs such as business asset relief for capital acquisitions tax purposes?
- Is there an option to claim retirement relief or entrepreneur relief for capital gains tax purposes?
- Is there an option to review the group structure as a holding company can be beneficial when selling all or part of a business?
Identify Prospective PurchasersUnderstanding and researching the potential buyers for your business is an essential part of the process. Every business owner can name several potential buyers, be that a management team or a key competitor. However, other potential buyers may not appear on a list, may have different strategic reasons for buying and may pay a premium for the business, i.e. new market entrant, acquiring IP, or gaining access to resources (e.g. people). Keeping the process confidential during these early stages is vital as it may 'spook' potential customers or suppliers or unsettle critical employees. Having an adviser on board will help maintain confidentiality.
Negotiating The DealOnce potential purchasers are identified, they may enter a period of limited due diligence. Much valuable insight can be gained during this period for the vendor, regarding how the due diligence has conducted the type of queries and questions raised. Having this insight early on will help in the price negotiation phase. It's not advised to name your price, solicit offers for potential acquirers setting strict deadlines for offers. The seller must maintain control of the process at this stage. A second round of offers may be 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, ability to execute the deal and sources of funding should also be considered.
Closing The DealNegotiating 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 the handover of relationships and integration? The sale process is a time consuming and very 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 the business over many decades. At Roberts Nathan, we have worked on many buy-side, sell-side and management buy-outs in the recent past, and we have a wealth of experience advising owner-managers through the transaction process. Please get in touch with us if you would like to understand more, my details are in the link below: https://www.robertsnathan.com/member/derek-dervan/
September 9, 2021
Bidding On The Right Contracts
Our aim at Roberts Nathan is always to add value to your business and to support you as it grows. To do this effectively we listen and we understand. Only then do we offer expert financial and business performance advice to allow you make better decisions for you and your business. When it comes to our business advisory services, one specific challenge we help our clients overcome is around the correct process for bidding on new contracts. Making a bid is a time-consuming process that requires a lot of effort for any business. Hence, it's imperative that you carefully choose the projects you want to pursue. While you can see a lot of potentially lucrative contracts in your industry, there are some that won't be as suitable for your business. This is why it is really important you have a system and methodology to perform a comprehensive contract bidding analysis that is in accordance with your long-term plan and fulfils your company's objectives. Factors to consider to ensure bidding on the right contracts Here are a few variables you should evaluate before bidding on a contract to ensure that you are making a decision based on an agreeable logic.
- Long-term planning
How can we help?From comprehensive business advisory to making bids, we provide you with the assistance for each of these business aspects. When you choose us for your bidding solutions, we'll simplify the process and show you how to create winning bids that will incur the highest profits for your business. In addition, we'll assist you with identifying allocation bases and dividing pools of expenses, compiling indirect costs, and calculating fair and attractive rates for contract proposals. By working with the Roberts Nathan team, you can rest assured that all your contract bids will be made after comprehensive, thorough analysis of your resources which will guarantee to deliver your business the best possible returns. Please reach out to me on firstname.lastname@example.org or feel free to give me a call on +353 (021) 494 3977 if you have any questions in relation to any part of the contract bidding process.
July 7, 2021
Covid Restriction Support Scheme
As many businesses begin reopening their doors this week, the Revenue have confirmed those eligible for the Covid Restriction Support Scheme should be able to avail of two weeks double payment of the scheme in order to assist with restarting their businesses. See details of the Revenue press release here. As Revenue have reiterated in recent times, all reliefs such as the CRSS require up to date tax clearance certificates which mean the taxpayer must have all tax returns filed and payments made or debt arrangements agreed. At Roberts Nathan we continue to assist our clients both applying for and maintaining Covid reliefs. Feel free to contact us if you wish to discuss any Covid supports or any issues arising for your business as the economy reopens over the coming weeks.
May 12, 2021
RN Podcast: 2021 – What is in store for the Irish tax landscape in the year ahead
Vivian Nathan, Managing Partner, welcomes Brendan Murphy, Tax Partner, to Roberts Nathan. Brendan joined the firm at the beginning of 2021 to continue the firms expansion and our commitment to providing our clients with dedicated specialist within specific sectors. On this podcast, Viv and Brendan discuss the opportunities Brendan sees for businesses from a tax perspective in the year ahead and what will be the key areas of focus for tax advisors. They also look at the impact to date of Brexit and how this will continue to effect trading between Ireland and the UK. Finally they will look at the cost Covid-19 is having on the Irish economy and what the future Irish tax landscape may look like.
We hope you enjoy listening to our podcast and if you have any questions regarding any of the points raised please let us know.
April 19, 2021
UK Businesses – Do you have the correct Irish VAT number?
Check your VAT number VIES VAT number validation
Since June 2019, companies registering for VAT have had to specify whether they wish for a “domestic only” or “intra-EU” VAT registration.
The domestic only registration has helped speed up registration process for business seeking to register for VAT however, we have seen a number of instances where businesses are unaware of the need to include an intra-EU registration within their application. In particular we have noted many UK businesses applying for Irish VAT numbers on the basis of being a non-resident company with operations in Ireland and obtaining an IE VAT reg. If the company is importing goods into Ireland for domestic only supply, then the domestic VAT registration is sufficient and they are charged Irish VAT at the point of importation of the goods into the EU. Thus the domestic VAT registration applies only if the company is importing goods into Ireland, storing and distributing them here and not further distributing outside of Ireland.
However if your company is looking to use Ireland as a new trading base in dealing with EU customers this will not be an effective VAT number for EU wide trading.
So check your VAT number. If you get the above message on the VIES system then it is only a domestic VAT registration.
This will cause issues if you are bringing goods into Ireland and then intending to export them to another EU country as you will need to apply for an intra-EU VAT number. It will be the exact same number but will need to be validated as otherwise your customers will get the above notice when the VAT number is checked for EU trading. This causes an issue for your EU customers as you will not have issued a valid VAT invoice.
We have helped a number of clients with this by amending their VAT registration and getting the option for intra-EU VAT registration. This requires additional information for Revenue which we can assist with.
If you would like to explore further options around your business, please contact Brendan Murphy who would be very pleased to assist you.
Brendan Murphy: email@example.com
|No, invalid VAT number for cross border transactions within the EU|
March 31, 2021