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News Business in Ireland

  Business

Budget 2023 – What does it mean for your Business?

Paschal Donohoe and Michael McGrath have delivered Budget 2023 which the Minister for Finance specifically referred to as a “cost of living” Budget. The Minister referred to the difficult balancing act faced by the Government to help ease the burden of the rising costs of living on the public while also not driving up inflation which is currently at 8.5%. In this regard, the measures introduced were weighted strongly towards individuals’ financial position rather than towards businesses and corporates. Some of the main changes introduced to help for individuals include:
  • Each PAYE worker/sole trader in the higher tax band will see tax savings in 2023 of over €800 over the course of the year with the following measures:
    • increase of the standard rate band to €40,000,
    • increase of personal, employee and earned income tax credits by €75 each, and
    • increase in the 2% USC rate threshold by €1,625.
  • A tax credit for those who are renting of €500 per annum including for the year 2022.
  • Electricity credits of €600 of which €200 will be paid in December 2022 with the remainder early in the new year.
  • There were a number of increases for social welfare recipients including:
    • Social welfare payments to be increased by €12 per week;
    • One off double week payment to social welfare recipients in October in addition to the Christmas bonus in December;
    • One off payment of €200 for those in receipt of the Living Alone Allowance;
    • One off payment of €500 to those on Disabililty Allowance, Invalidity Pension and Blind Pension;
    • One off payment of €500 to those on Carer’s Support Grant.
  • Parents will benefit greatly in this budget with the following items being introduced
    • A 25% weekly reduction for those availing of the National Childcare Scheme
    • A once off double payment of child benefit to all qualifying households
    • Free school books to be provided for primary school children.
While the above are welcome measures for individuals feeling the strain of increased fuel and living costs, SME’s are also in danger of seeing increasing overheads reducing profits and having a major impact on their survival. The lack of measures to ease this burden will have caused great concern to business owners, many of whom have just got back to normal trading following the Covid pandemic. Many of these businesses will also have debt warehousing balances to begin paying off from 1 January 2023 and this will put further financial pressure on their cash flow next year. The main support introduced for businesses is the Temporary Business Energy Support Scheme. The scheme will compare the average unit price for the relevant bill period in 2022 to the corresponding period in 2021 and any increase of more than 50% will entitle the business to support calculated as 40% of the increase. A monthly cap of €10,000 per trade will apply. However, the scheme will need to be approved by the EU Commission in advance of payments being made. For businesses carrying on R&D functions, the Government has committed to enhancing the current R&D credits to make amendments to the payable element of R&D to align with other EU countries. We would hope this would see the refund of credits not used arising in year one rather than being spread over 3 years. The Knowledge Development Box regime has been extended a further 4 years to allow an effective corporation tax rate of 6.25% for businesses making a qualifying KDB claim. As noted above, employees will have some additional income in their take home pay due to the individual taxation measures, but to help businesses reward key employees the KEEP scheme has been extended to 2025. The KEEP scheme is an important consideration for SMEs who may wish to reward key staff with a share in the business, however, the administration and compliance of running the scheme has been known to be quite onerous and we would hope to see some tweaks to legislation in the Finance Bill next month to further encourage uptake in this scheme. The once off tax-free gift employers can provide to employees has also been increased from €500 to €1,000 with two vouchers now being allowed instead of one. Finally, the Special Assignee Relief Programme will continue until 2025 and the qualifying income has increased to €100,000 to encourage inbound expertise. These business measures, along with the continued commitment to both the 12.5% corporation tax rate and working closely with the EU and OECD on international changes, are aimed at keeping Ireland competitive and safeguarding Ireland’s attractiveness as a destination for talent and foreign direct investment. However, the lack of substantial support for SMEs given the rising overhead costs is a worrying result of the Budget announcements.  The implementation of the new TBESS once it gets EC approval will be of major interest to all business owners as this is the only significant financial saving for businesses arising from the announcements. Some may argue that business owners did benefit from significant supports during Covid but the cost-of-living crisis that we are facing could be every bit as detrimental to the future of many Irish SMEs if sufficient support is not provided. We would hope that the application of the TBESS is made seamless and practical to ensure at least this support is fully utilised by businesses in need. We await the publication of the Finance Bill on 20 October to see if any further measures are introduced.
September 27, 2022
  Business Advice

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.
While every business sale will be different, typically it takes about six to nine months to complete the process from planning stage to the ultimate sale. Occasionally it can be done in a shorter time period, but it is unusual as a certain amount of preparation work will need to take place in order to get the business into the best possible shape prior to placing it on the market. This article has been prepared in order to give an overview of the process of selling your business. Preparation for Sale The first stage to be addressed is the preparation of the business for sale. This generally takes a period of four to eight weeks depending on the circumstances of the business. A major part of the preparation stage involves you and your accountants/advisors drafting an Information Memorandum (IM) on the business. Your input as the owner manager to this process is critically important as it sets out a sense of the company and how the sale itself is likely to proceed. The IM document should be drafted in a positive way and typically would contain the following sections:
  1. Executive Summary
  2. Background to the Company
  3. The products or services offered together with an outline of the business model in operation
  4. Details of the customers and market in which the company participates
  5. Future opportunities attached to the business going forward
  6. Key financial information and financial forecast, reasonably reflecting how the company is expecting to perform in the next one to three years.
A comprehensive list of possible buyers should be prepared at this stage. This will need to be a combined effort between you and your accountant to ensure that all potential purchasers of the company, both in Ireland and overseas, are identified and graded in terms of their potential.   Making Contact with Potential Buyers At this stage, your advisors will be ready to make contact with potential buyers of the business. Before the IM is issued to the potential buyers for their consideration, they should firstly be asked to sign up to a confidentiality agreement. At this point, your advisors would request that potential buyers, who have expressed an interest, would revert back within three to four weeks providing an indication of any non-binding offers for the business. Once the indicative offers are received, you and your advisors will review the offers and a number of the potential buyers will be invited to meet the sales team for discussion purposes. This second stage can take up to four to six weeks.   Meeting with Bidders and Management Presentations At this stage, meetings can take place between interested parties and the sales team (including some of your senior management team, if appropriate.) In many respects, this is a critically important stage in the whole sales process. Face to face meetings with interested parties tend to reveal a great deal in terms of the actual interest level in acquiring your company. In person meetings of this nature can also be very effective in identifying common ground and shared objectives. Following these meetings, interested parties would be contacted seeking revised offers, as appropriate. Once revised offers have been received, your advisor interacts with the bidders in order to work out the best final offers. Following this, your advisor will work through the final interested parties and prepare a prioritised list of preferred purchasers. Needless to say, the price on offer will play a very large part in that decision, but other factors may also be relevant. Once a preferred party is identified, a Heads of Terms will be prepared. This is a short document capturing the key commercial and financial terms of the proposed deal for the sale of your business. This stage can take between six to eight weeks, involving a significant time commitment from you as the seller of the business.   Due Diligence and Final Negotiations Following completion of the Heads of Terms, the final stage in the sales process will involve a due diligence exercise being undertaken by the preferred party on your business. This will involve a detailed review of all key aspects of the business, so that a full understanding of the detailed operations of the business can be achieved. Following satisfactory completion of the due diligence process, the Sale Agreement is prepared by your solicitor, in consultation with your advisor. It is then issued to the selected purchaser for legal review and to sign. Once this document is signed by both parties, the sale proceeds are transferred by the purchaser to you and then the sale of your business will have been completed.   We have assisted many clients with the successful sale of their business so if you require assistance in relation to preparing your business for sale, we would be happy to assist. You can contact us at
info@robertsnathan.com   The content of this blog is intended to convey general information and educational advice. It should not be relied upon as professional advice. We have done our best to ensure that the information provided by Roberts Nathan is accurate and up-to-date but unintended errors or misprints may occur. If you wish to obtain business advice or taxation advice please do not hesitate to get in contact with a member of our team.
June 21, 2022
  Business Advice

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.
The scheme allowed for the deferral of these unpaid liabilities for an interest free period of 12- months which is ending in most cases on 31 December 2022 and will provide for a reduced interest charge of 3% on those debts from 1 January 2023.  In December 2021, Revenue announced that the scheme would extend from 31 December 2021 to 30 April 2022 for certain companies. In essence, the interest free period for debt warehousing will be  coming to an end later this year. If the debts are fully paid off by the end of the year, no interest will occur. Any debt outstanding from 1 January 2023 will have an interest rate of 3% per annum applied to the debt provided a Phased Payment Arrangement (PPA) has been agreed with Revenue in advance. Revenue have advised that anyone who will have outstanding debt in place going into 2023 will be required to contact Revenue with a payment plan before the end of 2022 outlining how they intend to pay the outstanding liabilities to Revenue. Given we will shortly be entering the second half of 2022 companies should begin thinking about their cash flow management now and the PPA proposal they intend to put forward to Revenue before the end of the year. If you require assistance in relation to contacting Revenue with your payment plan, we would be happy to assist. You can contact us at
info@robertsnathan.com To learn more about our services see our Personal and Corporate Taxation page. Contact Us
May 24, 2022
  Business Advice

Dealing with Inflation: Advice for Business Owners

Current inflation factors

The 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%.

Outlook

The 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

  • 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
Directors need to plot how they can manage the increase in overheads without impacting the profitability of the business.

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 help 

We 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 info@robertsnathan.com Contact Us
May 11, 2022
  Business Advice

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.
  • Profitability
The main thing is that there's no contract bidding on a project if it doesn't generate enough profit. To accurately estimate your project expenses, ensure you have an accurate and detailed accounting of your yearly labor and equipment expenditures. Incorporate taxes, insurance, workers' compensation, holiday pay, tools and equipment, and any other perks you offer your employees when determining labor expenses. After determining how much it will cost to finish the project, you must examine additional factors such as location, contract requirements, expected construction technique, and so on to decide if the project will be lucrative if you make the winning bid.
  • Potential
After you've established that the project is beneficial for your business, you must evaluate if your business is capable of completing it. Examine your existing backlog of future projects to ensure that you have the workforce, equipment, crew, and other resources in place to devote to the project when construction is scheduled to begin and finish it on time. It is also important to verify that your business is financially competent to finish the project, which means that you have the necessary bonding capacity and cash flow to complete the job without compromising your other commitments.
  • Long-term planning
Check if the project you're interested in bidding on aligns with your business's long-term strategy and objectives. Whether you want to expand your business or to grow the business into new markets or geographical regions? Or maybe you want to switch to private work, or maybe you'd like to take on bigger projects, like hotels or hospitals. Irrespective of the company's long-term plans, make sure you're discovering and pursuing projects for contract bidding which support those objectives. Project location, duration, scale and nature, competitiveness, client, and designer are things to consider when deciding about the contracts to bid on. 

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
shane.meade@robertsnathan.com 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
  Business in Ireland

Setting Up a Company in Ireland F.A.Q’s

What are the basics I need to know? Before they became clients of ours, many business owners had the following questions they needed answers to when considering setting up a company in Ireland. As a result, we have decided to answer the most frequently asked questions we regularly receive.  
  • What do I need to consider when registering for a VAT number in Ireland?
Difficulties can arise when registering VAT due to how common VAT fraud is and therefore the authorities can be slow to issue a VAT number. It helps if you have Irish-based clients, suppliers and/or employees as well as an Irish-based office. Registering for VAT is not mandatory and can take a number of weeks.  
  • Is it possible to set up a business bank account as a non-resident and what’s required?
A face-to-face meeting with the bank and an Irish director is required and typically we would arrange this and facilitate the meeting for you. Usually, this takes about 2 weeks after you meet with the bank.  
  • How long does it take to register a limited company?
Usually we find it takes 4 working days from when we receive all the signed documents from you.  
  • What are those documents? 
  1. A copy of your passport
  2. Proof of address
 
  • What paperwork is required to be filed annually for this company?
An annual return must be filed by all companies with the Companies Registration Office (CRO).  
  • Are the company directors required to be residents in Ireland?
No, it’s not a legal requirement, however, for tax residency purposes it is advisable to have an Irish-based director on the board of your company and we are able to provide that service for you should you require it.  
  • Do I need a company secretary?
All Irish Limited Companies are required to have a company secretary. We can provide this for you.  
  • How do I get a postal address in Ireland, do I really need it?
We can provide you with an Irish address in Dublin or Cork. Yes you need it, registered companies in Ireland must have an Irish address.  
  • How much does this all cost?
That all depends on what you need and want, no two businesses are the same, but rest assured we will advise and work together with you to minimize investment.   If you are considering registering a company in Ireland and would like our help in doing so, then please contact me, Shane on +353 21 494 3977 or
shane.meade@robertsnathan.com
May 13, 2021
  Uncategorized

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