fbpx

News Business

  Business

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
  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
  Audit

Does your Irish Company Require an Audit?

Subsidiary Audits

A frequent question we receive from international clients is in relation to what group and local Audit requirements apply for their Irish subsidiary or stand alone companies.  We work with several large international groups to provide group and local audit services to those Irish subsidiaries.  

Do I need an audit?

The common initial question we are asked is whether the Irish company can avail of audit exemption due to its size. Where the company is a standalone company then this is to be considered under the Small company Audit exemption. Where the Irish company is a subsidiary or where there are a number of Irish companies (forming a sub group) then this would be an intermediate parent of the group and would need to consider the small group audit exemption:  

Small Company Audit Exemption

In order for an Irish registered company to qualify for the small company audit exemption the company must satisfy TWO or more of the following conditions in the current financial year and in the preceding financial year (unless it is its first financial year):
  • Balance sheet total does not exceed €6m
  • Turnover does not exceed €12m
  • Number of employees does not exceed 50
Also, the company must not come within any of the 18 classes of companies listed in the Fifth Schedule to the 2014 Act (generally financial services / banks and insurance). More importantly the company’s annual return, to which Financial Statements are attached, must be filed on time for the year in question and the previous year. It is therefore vital to maintain on time annual return filings with the CRO in order to maintain the audit exemption for these smaller companies.  In many cases due to a simple failure to file on time in the prior period leads the company into a 2 year period of audited financial statements for the Irish entity.  

The look through - Small Group Company Audit Exemption

However even if the individual subsidiary company qualifies as a small company, where it is part of a group then it must also consider whether it can avail of the small group company audit exemption.  Thus, it is a ‘look through’ position and where the subsidiary forms part of a larger group it may still require to be audited. Audit Exemption applies to any group company if the group as a whole qualifies as a Small Group.  The entire group and all its subsidiary undertakings must, taken as a whole, satisfy two of the following 3 conditions in order to claim a Group Company Audit Exemption.  The conditions must be met in the year and also in the preceding year unless it is the holding company’s first financial year):
  • The balance sheet total of holding company and subsidiaries taken as a whole does not exceed €6m net (or €7.2m gross)
  • The amount of turnover of the holding company and subsidiaries taken as a whole does not exceed €12m net (or €14.4m gross)
‘net’ means after set-offs and other adjustments made to eliminate group transactions
  • The average number of persons employed by the holding company and its subsidiaries does not exceed 50.
So just because an individual Irish subsidiary company is ‘small’ may not mean it can avail of audit exemption automatically.  This is essential for many international groups to understand for their Irish companies within the group.  

Contact

As many international groups now have Irish entities within their structures they should consider their local Irish Audit and Advisory needs and whether our specialist subsidiary audit services could work for them. With our services you have a professional and dedicated Audit team with local knowledge and international experience from a contactable team.  We ensure that the local statutory audit and financial statements requirements of the subsidiaries are completed and filings maintained.   For an initial meeting or discussion, please contact: Aidan Scollard FCA Partner and Registered Auditor - Roberts Nathan Email aidan.scollard@robertsnathan.com Office + 353 1 876 4550 Mobile +353 86 25 23 026     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 7, 2022
  Business

How SCARP Helps Small Companies Settle Debts with Creditors

SCARP, the Small Companies Administrative Rescue Process is a restructuring process similar to the Examinership process in Ireland, used to restructure companies in, or facing financial distress. Examinership, whilst it has saved thousands of jobs over the last thirty years, is expensive and complex for many small and medium sized companies. SCARP is the government’s response to the need to provide a restructuring process that is cost effective and more accessible to micro, small and medium sized companies. Its introduction is timely, as we emerge from Covid-19 many businesses are facing difficult and uncertain trading conditions. With government Covid-19 supports now tapering off, the commencement of repayment of warehoused tax liabilities, the impact of the war in Ukraine, increased energy costs, raw material shortages and labour supply issues, businesses are now heading towards what one might consider a perfect economic storm. Whilst the indications are ‘the economic headwinds’ will be short lived; companies and businesses will have to weather these storms and unfortunately some will not survive. SCARP provides a restructuring tool that will allow companies to restructure their debts whilst continuing to trade. The restructuring plan once finalised and agreed with creditors becomes legally binding. Key considerations Who is SCARP available to: SCARP is available to companies where:              
  • Turnover does not exceed €12 million.
  • The balance sheet total does not exceed €6 million.
  • The average number of employees does not exceed 50.
This captures approximately 98% of all Irish businesses. In addition to be eligible a company must:
  • be unable or is likely to be unable to pay its debts.
  • not be in liquidation or have a receiver appointed.
  • have not used the process or had an examiner appointed in the last five years.
Key features of the process
  1. The process is led by a qualified Insolvency Practitioner (IP). The IP will be appointed as Process Advisory (PA) and will be tasked with formulating a rescue plan for the company.
  2. The process will have a defined timeline lasting up to 70 days.
  3. There is no automatic court protection from creditors once a company enters the process. The PA can seek this court protection once appointed.
  4. A rescue plan is approved when a 60% majority in number and a majority in value of one class of creditor approves the scheme.
  5. There is the ability to repudiate onerous contracts (e.g. leases).
  6. State debt is classified as ‘Excludable Debt’. Essentially the state creditors (e.g. Revenue) has the option to opt out of the process.  It has 14 days from the giving of notice to opt out, if there is no objection within that timeframe, Revenue may be included in the rescue plan.
  7. A rescue plan may require additional investment in the company. There is the ability to fund the plan over a period of time, subject to the approval of creditors.
  8. The PA is obliged to report to the Officer of the Director of Corporate Enforcement (‘ODCE’) on the historical conduct of the directors of the company.SCARP Process
Summary In essence, SCARP is a process that, if successful, will ultimately be an agreement between a company and its creditors to settle its debts. It is a very welcomed process that allows businesses to restructure their balance sheets to enable them to protect employment and to continue to trade. Fundamentally the company must have a reasonable prospect of survival to avail of the process. Early-stage action and intervention is key to a successful outcome in any scenario where companies are facing financial distress and/or liquidity issues. This affords businesses the time to consider all available options. We at Roberts Nathan have significant formal and informal restructuring experience to help you navigate through these challenging times, so if you would like to discuss the above or any other issues or concerns facing your business, please contact Derek, or get in touch with us at derek.dervan@robertsnathan.com
May 17, 2022
  Business

Company Registers – What You Need to do

Having seen a recent an increase in new company incorporations with many companies having been incorporated post Brexit by UK parent groups we are receiving more queries around the legal requirements around the statutory books to be maintained for these companies. Company registers are the official books kept by a company relating to legal and statutory matters and are often referred to as the statutory registers, combined registers or company books. There is a legal obligation under the Irish Companies Acts for every company to have and maintain their company registers which is a responsibility of the Company Secretary. Failure to keep the registers correctly is a category 3 offence by the company and every officer of it who is in default. The company registers are however often overlooked and not reviewed and updated on a regular basis. It is often only when there is a possible sale or a dispute within a company that the registers can suddenly become a priority which can lead to delays and issues between parties.  

Company sale

Questions about the whereabouts of the company registers and their status usually arise when a company is to be sold and the purchaser requests the registers in order to conduct the company secretarial due diligence as part of the sale process. If the company registers have not been properly maintained, they will need to be reconstituted prior to the sale. Even if the registers were maintained, they should be reviewed as part of the pre-sale company health check to ensure that they correctly reflect the current position of the company to avoid unnecessary complications during the sale process. If there are any deficiencies that cannot be remedied, the purchaser may require the seller to indemnify the purchaser for any loss they may suffer due to the statutory registers not having been properly maintained. We frequently see that transactions in relation to the share capital of the company or changes in company officers have not been kept up to date in the registers of the company.  

What are the registers each company must have?

Under European Legislation and the Companies Act 2014 there are seven mandatory statutory registers required to be maintained by all companies incorporated under the laws of Ireland. These are:
  1. Register of Members pursuant to Section 169 of the Act
  2. Register of Directors and Secretaries pursuant to Section 149 of the Act
  3. Register of Directors' and Secretaries' Interests in Shares or Debentures pursuant to Section 261 of the Act
  4. Register of Directors' Service Contracts pursuant to Section 154 of the Act
  5. Register of Directors' Interests in Contracts pursuant to Section 231 of the Act
  6. Register of Instruments creating Charges pursuant to Section 414 of the Act
  7. Register of Ultimate Beneficial Ownership pursuant to Article 30 of the 4th EU Anti Money Laundering Directive
Many companies often have additional registers that, although not legally required, are very useful such as a register of sealing of documents. Companies are also obliged by law to maintain minute books for the directors and shareholders' meetings and other corporate documents such as written resolutions.  

Register of members

The most important register is the register of members. The register of members shows past and present members and is evidence of who the current members of the company are and the number and classes of shares they hold. This information is vital for conducting company meetings and passing resolutions, especially in companies with large numbers of members or where members change frequently. It helps to ensure that all decisions are taken properly and to avoids decisions made to be challenged in the future. If there is a dispute in relation to the company’s shareholding, the Court will ask to see the register of members as evidence of who the existing shareholders are.  

Inspection and location of the registers

The registers should be kept at a company’s registered office address or its principal place of business or another place within the State. The registers shall be open to inspection by any member of the company without charge. The members of the company are also entitled to request a copy of the registers and a copy of the minute book of the members' meetings. It should also be noted that any other person may also inspect the register of members, directors and secretaries and disposable interests and request a copy of those registers (for a small fee). The registers can be kept in paper or electronic format.  

Rectification of company registers by Court Order

As mentioned above any person has a right to request to view the registers of a company. If a person’s name is omitted from the register or entered without sufficient cause or the registers were not updated to reflect that a person ceased to be a member, the aggravated person may apply to the court for rectification of the register. The Court may then order rectification of the register and payment by the company of compensation for any loss sustained by any party affected. If the company was sold, the seller could also face a claim for breach of warranty and associated damages in respect of the cost to the company and the purchaser. It is important to note however that a company can rectify its registers without a Court Order. As soon as any omission or error has been identified, the company registers should be rectified.  

How we can help

These issues highlight the importance of maintaining the company registers in good order which reflect the current company position from the outset when a company is first incorporated. How Roberts Nathan can help – we can review and assist in an overall health check on your company registers and where necessary carry out a reconstitution, or rectification of the registers. If you would like to discuss the above you can contact Aidan or email us at info@robertsnathan.com Contact Us
May 3, 2022
  Business

How To Minimise Your Tax Liability As A Business Owner

We know that tax is a significant variable facing business owners, which is why we invest heavily in experienced, highly qualified tax advisors. Our team works with a wide variety of clients in businesses across various industry sectors to meet tax compliance obligations and provide beneficial tax strategies to all types of business owners. In today's blog, we wanted to look at some simple methods for lowering your tax liability as a business owner.  Taxes, like any other expense, can be controlled and lowered with our proper planning and guidance. Cashflow and money will always play a significant part in the potential success for any business so ensuring proper compliance and setup will be crucial for you. The Revenue Commissioners will always get their percentage from your personal and company wealth, but, here are some methods to help you minimise your business's tax obligations and reduce your tax liability as a business owner.

Methods to reduce tax liabilities as a business owner

  • Maintain systematic record 
While this may seem self-evident, many companies lose out on valid tax deductions or face unjustified add-backs or penalties as their accounting records are insufficient to identify and verify all of the expenditures they are allowed to claim.
  • Tax credit
A tax credit is an instrument that lowers your tax liabilities by decreasing the amount of tax you pay over a financial year. Some of these are provided automatically, while others must be claimed. Any credits that aren't claimed can't be refunded or carried over to the next tax year. By contacting us or by doing some research on your own, you can get to know what tax-deductible expenditures are suitable for your business.
  • Finance capital expenses for tax exemptions
If you buy equipment with cash or a loan, you may receive a 12.5% tax reduction across six and a half years. However, it may be more cost-effective to purchase equipment on a lease and claim tax benefits throughout the lease, usually three years.
  • Engage your spouse or any other family member
Employing spouses or other family members can also be tax beneficial if you can establish and explain their role in the business.
  • Change your company's accounting reference date
In some instances, altering your company's accounting reference date can be beneficial if your business is seasonal or if your profit measures are rising or falling.
  • Preliminary tax
Choose to pay your preliminary tax based on current year projections if your income is expected to decrease.
  • Travel and subsistence 
Revenue allows for the tax-free payment of mileage and subsistence as long as the proper paperwork is held.
  • Consider turning into a Limited Company
There are other factors to consider when starting a business, but if you're making more money than you need to cover your costs, it may be worth setting up a company to benefit from further tax reductions.
  • Generate management accounts before the end of the year 
Calculate your possible tax liability before the end of the year to allow yourself enough time to prepare and manage your tax payment.   The methods mentioned above will given you an idea of how you can minimise your tax liability as a business owner. However, as is often the case with financial planning, we look at every business owner individually and set out a plan that is customised and fitted for them. For expert assistance in maintaining your financial records, digital accounting, beneficial tax strategies, auditing, and more intended to profit your business most productively, please reach out to me on shane.meade@robertsnathan.com or feel free to give me a call on +353 (021) 494 3977.
July 14, 2021
  Business

Roberts Nathan featured in the Business Plus July edition

Our Managing Partner Vivian Nathan speaking to the Business Plus July 2021 edition. Vivian shares his views on how Brexit has been a boost for Roberts Nathan.  
July 5, 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
  Business

Roberts Nathan featured in the Business Plus March edition

Our Managing Partner Vivian Nathan speaking to the Business Plus March 2021 edition. Vivian shares his views on activity levels, remote working, business supports and enterprise.  
March 10, 2021
  Business

Do you help international companies enter new markets?

Join Aidan Scollard, Partner at Roberts Nathan, who in conjunction with Soft Land Partners will be speaking to professionals who help international companies enter new markets at this free online event taking place on Thursday 4th February from 4-5pm. Register your attendance by clicking here.
February 1, 2021