Syndicated Archives - Page 3 of 240 - Devine Accountants

Brexit preparation – is business ready for the unknown?

The Kayfoam factory in Bluebell in Dublin is a labyrinthine complex of large warehouse units packed with noisy high-tech machines pumping out, shaping and sizing huge blocks of foam under the watchful eye of a team of busy staff.

The blocks are then quickly fashioned into mattresses and other foam based bedding materials like pillows, which in turn are packaged, shipped and sold under a range of brand names.

We’ve come to talk to the company about Brexit preparations, and with so much sponge at every turn, its hard to resist the obvious light-hearted references to “soft” and “hard” exits, and “firm” commitments, etc.

But for this Irish company employing over 300 staff, Brexit is no laughing matter.

The UK is Kayfoam’s largest market and so it is hoping its business there is not damaged in the coming weeks and months by the still live possibility of the UK crashing out of the EU without a deal.

To mitigate against the risk it is hedging currency, as it has done for years, and set up a venture in Estonia to supply mattresses into the Swedish market.

“If we end up with a hard Brexit it will obviously have a massive impact on industry in Ireland in general, particularly on food and other industries where you have very high tariffs,” said David Moffitt, CEO of Kayfoam.

“We would have concerns way beyond tariffs…the biggest is going to be currency as there is every possibility that sterling will plunge through parity with the euro.”

“You’ve also got the issue that consumer demand in the UK could plunge as well. The issue of credit ratings on retailers in the UK will be a massive issue.”

“So we see a whole series of issues, and then you’ve also got the issue that there will be some form of customs arrangement between the UK and Ireland and there will be costs associated with that.”

Kayfoam is in many ways typical of the hundreds of mid-sized manufacturing companies here, facing the unrelenting uncertainty around Brexit.

Working with them at the coal-face to prepare for as many eventualities as possible is Enterprise Ireland (EI).

It launched its annual results for 2018 today, which show that last year the number of jobs in companies it supports reached another record high of 215,000, with two thirds of those outside Dublin.

But amid all that positivity, the Brexit elephant is still in the room and could be about to trample all over the job creation progress that has been made in recent years.

Indeed, Julie Sinnamon, Enterprise Ireland’s CEO acknowledged this, admitting that there are 600 EI client companies that together employ up to 25,000 staff, who are vulnerable and at risk if there is a hard Brexit, due to their exposure to the UK.

Many, she said, are in the food sector and would face a range of challenges, including currency volatility, uncertainty around transition arrangements, customs and logistics barriers and certification and regulation issues.

“Obviously the big issue is the lack of certainty,” she said.

“In as much as they can plan we are saying plan for a hard Brexit, control what you can control and take steps.”

She added that tariffs pose the biggest risk for many UK-export focused businesses followed by currency volatility.

“It is one of the big issues when we have been talking to clients around the country,” she added.

“The whole transitional arrangements and the customs and logistics, those are issues that companies are concerning themselves about and making plans.”

Enterprise Ireland has been doing its best to prepare these companies for the worst on a one-to-one basis.

It’s held consultancy meetings with them, provided training, innovation, competitiveness and diversification advice, helped them diversify into new markets, run trade events for them and guided them in the development of new growth plans.

According to its last survey, 85% of client businesses here have begun taking action ahead of Brexit.

The most recent AIB Brexit Sentiment Index found just 6% of SMEs in the Republic have a formal Brexit plan in place, though it is fair to argue that you can’t be properly ready for something when you don’t know what it will involve.

According to Catherine Moroney, Head of Business Banking at AIB, there are three key questions businesses should be asking themselves right now.

“The first one would be to say to themselves if tariffs are applying to my business, do I know what they are going to be and do I know can I afford those tariffs,” she said.

“The reality is that tariffs can vary from 5% all the way up to 40%, so businesses need to know what those tariffs are going to be and then to plan for that.”

The second question is can they source items from their supply chain from elsewhere that wouldn’t have the same impact on their tariffs?

“That is actively happening already, we are already seeing evidence of customers doing that,” she claimed.

The third area is ensuring cash flow is solid.

“If you have products that you want to sell or some small component in your supply chain that’s needed for your product, you don’t want them stuck at a border.”

“So you just need to talk to your logistics company or export broker and make sure you are ready for that piece as well.”

She also urged companies to look at whether they can lock in their profit by hedging against sterling exchange rate volatility.

Regulation and certification is another big worry for some businesses when it comes to Brexit preparation.

For some big firms operating here and in the UK that have the resources and the scale to do it, dealing with that challenge involved internal reorganisation of functions from the UK to Ireland, or indeed the transfer of entire business units to here.

The Central Bank of Ireland says it has received more than 100 Brexit related applications for authorisations here since the 2016 referendum and that number is likely to be much higher by the time we learn exactly what Brexit means in reality.

But for others, such upheaval is neither financially or practically possible and they may have to tackle a possibly complex regulatory burden a different way.

Rapidly growing Irish fintech company Fenergo builds software products to help businesses, particularly those in financial services, to cope more easily with regulation and compliance.

It says it is likely that there will be a lot of regulatory change in the sector in the event of a hard Brexit, but it won’t happen overnight.

“Clearly for our UK clients this is a big change and there is a lot of uncertainty about what is going to happen,” said Emer Murray, Vice-President at Fenergo.

“We can expect that regulations will change over time, I expect that there will be a lot of increasing uncertainty and complexity in the regulations, we can expect a greater degree of friction.”

But she says it is not like a Y2K moment, referencing unfounded fears of a global computer shutdown on the eve of the new millennium 19 years ago.

“They will continue to operate with the regulations as they are encoded in the system, and that makes a lot of sense obviously because it is set up to manage fraud,” she said.

“And I think that will continue for a period of time. But it is really how it is going to change and evolve over time, and it is highly complex.”

Despite all the preparations though, uncertainty still prevails, at least for the moment.

And that continuing uncertainty may be the only certainty there is around Brexit for at least the next week if not longer it seems.

In that context the advice from most experts to businesses that they should continue planning for the worst and hoping for the best seems very appropriate.

Article Source:

Jobless rate remains unchanged at 5.3% in December

The rate of unemployment remained at a 10-year low of 5.3% in December, new figures from the Central Statistics office show today.

The CSO said the seasonally adjusted number of people who were unemployed in December stood at 127,100, a decrease of 20,000 when compared to December 2017.

The country’s unemployment rate has fallen from 6.4% a year ago and a financial crisis-peak of 16% in 2012.

Today’s CSO figures also show that the seasonally adjusted unemployment rate for men in December was 5.3%, down from 6.5% the same month the previous year.

The seasonally adjusted unemployment rate for women was 5.3%, down from 5.8% in December 2017.

Meanwhile, the seasonally adjusted youth unemployment rate eased to 12.2% in December from 12.3% in November.

Commenting on the CSO figures, Pawel Adrjan, economist at global job site Indeed, said that as the country edges closer to full employment it is worth considering the extent to which Ireland is maximising the use of the potential domestic workforce given the low participation rates for women, lone parents and those without third level education.

He noted that Ireland’s labour force participation rate for 25-64 year olds is below the EU average, and the gap has been widening in recent years for people without tertiary education.

“Policy efforts that focus on providing improved training and skills to those without tertiary education, will help people enter or re-enter the labour force, particularly those who are long-term unemployed or young people without jobs,” the economist said.

He noted that despite the declining unemployment rate long term and youth unemployment remain unacceptably high at 2.1% and 12.2% respectively.

These are both still above their respective pre-recession averages of 1.5% and 8.8% over the 2003-2007 period.

He also said it would also make sense to explore what can be done to help stay at home parents who would like to work to get jobs, adding that part-time roles and more flexible working arrangements could play an important role here.

“Searches for keywords related to flexible work, including remote and home working, have risen by 170% over the last two years on Indeed’s Irish site, suggesting rising interest from jobseekers in such arrangements,” the economist added.

Article Source:

Monthly retail sales edge 0.1% lower in November

New figures from the Central Statistics Office show that the volume of retail sales edged 0.1% lower in November on a monthly basis.

But retail sales were up 3.6% on an annual basis, the CSO added.

The figures were lower than expected.

When car sales are excluded, the CSO said that monthly retail sales rose by 0.2% in November compared to October while there was an increase of 1.9% in the annual figure.

Today’s figures show that sales of electrical goods jumped by 6.8% on the back of Black Friday promotions, while sales in bars also rose by 4.1%.

The sectors which saw the biggest monthly decrease in sales included pharmaceuticals, medical and cosmetic articles which fell by 7.5% while sales of food, beverages and tobacco were down 5.6%.

The CSO also said the value of retail sales in November was unchanged from October, while there was an annual increase of 2.7%.

In the first eleven months of 2018, retail sales are up 3.9% on average on the same time the previous year.

Commenting on today’s figures, Merrion economist Alan McQuaid said that retail sales continue to remain erratic on a monthly basis and are still swinging back and forth, but the underlying trend is positive.

“Even with the fluctuation in consumer sentiment, overall personal spending has been positive in the past couple of years, boosted by the increase in the numbers employed in the country,” he said.

The economist predicted that personal spending will post another positive increase for the whole of 2018 as the unemployment rate continues to drop and disposable incomes rise.

“Following these latest figures, we now think both headline and core sales will post an increase of between 3.5-4%. Looking ahead to this year, a lower spending rise of 2-3% is envisaged for the two measures,” he added.

Article Source:

NTMA to open 2019 fund raising with 10-year bond deal

The National Treasury Management Agency has hired a syndicate of banks and brokers to sell a new 10-year bond that a market source said was likely to raise around €3 billion.

That potentially could cover a fifth of the NTMA’s annual funding needs.

The NTMA has kicked off its funding drive with a syndicated sale every year since 2013 and was among the first euro zone sovereign out of the traps again this year.

The agency said it would issue the new bond “in the near future” – language it has previously used when selling the next day – subject to market conditions.

The NTMA said in a statement it had appointed BNP Paribas, Bank of America Merrill Lynch, Citi, Davy, NatWest Markets and SG CIB as joint lead managers for the deal.

The debt agency said last month it would issue between €14-18 billion of long-term debt in 2019, including at least one syndicated deal.

This is the same range it targeted last year when it ended up raising over €17 billion.

When the NTMA last issued a new 10-year bond via syndication in early 2018, it raised the funds at a yield of 0.944% having received over €14 billion worth of investor orders for the new paper.

Article Source:

Employers’ body says economic growth will be lower this year

Employers’ group Ibec says economic growth will be lower this year as a result of Brexit but also because the economy is at a mature phase of the business cycle.

The group also warns that a shortage of workers is already starting to have an effect on companies.

Ibec says growth will be around 4% this year, down from 7% last year, with labour shortages and an erosion of cost competitiveness playing a part in the slowdown.

But it says that this growth will add about 66,000 jobs to the economy.

Also wages should go up around 2.5%, say the employers, the same as last year, and inflation will stay weak at just over 1%, giving workers another year of real wage growth.

It says another 60,000 to 80,000 construction workers are needed to meet both housing demand and the Government’s infrastructure plans but says only 33,000 craft workers are on the live register meaning tens of thousands must come from abroad.

Those growth assumptions are based on the British parliament ratifying the Brexit withdrawal agreement, it says.

The group warns that a no deal Brexit means things will get a lot harder, notably for firms that export to the UK.

It says sterling could fall to an unprecedented level of 110p to the euro.

Article Source:

Credit unions set for higher interest rates on loans

The Minister for Finance has asked officials to begin preparing legislative changes needed to allow credit unions charge higher interest rates on loans and financial products.

If approved, the move would see the cap on interest rates rise from 1% per month to 2%.

But flexibility would also be introduced to allow the interest rate to be amended in future by the government using a Statutory Instrument following consultation with the Central Bank and credit union sector.

The proposals to allow higher interest rates will first have to receive the green light from the Cabinet though, before the necessary amendments can be brought before the Oireachtas.

It was reported that when the issue was raised at Cabinet last week, a number of ministers expressed concern about the idea because they felt it could lead to aggressive moneylending.

The changes are recommended by the Credit Union Advisory Committee (CUAC) Report Implementation Group, whose final report was published today.

The aim of increasing the allowable interest rates would be to enable credit unions to offer a broader range of products and services that take account of increased risk or creditworthiness.

Minister Donohoe said he would consider the majority of the other recommendations contained in the report in due course.

The most immediate priority for credit unions, according to the document, is the delivery of material change to lending regulations as soon as possible.

It says the Central Bank has requested credit unions complete a detailed questionnaire on the issue of lending limits and began a public consultation in October 2018.

The implementation group also says it does not now think it is necessary to have a formal two-tier model of regulation for credit unions, depending on their size.

Instead the report recommends that all new regulations should contain an element of tiering in them.

The report also notes that a service level agreement to aid consultation and engagement around the sector has not yet been introduced, despite it being recommended by the CUAC.

It says this remains a matter for consideration by the Central Bank within its statutory remit.

The implementation group also says that significant progress has been made in a range of areas around the development of business models for credit unions, including payment services, current accounts including debit cards, agri-lending and mortgage lending shared services.

The report says 2019 could prove to be an important year for the credit union sector as regulatory changes take effect.

A new regulatory framework for lending will allow a large number of credit unions expand their home-loan offerings.

2019 will also see up to 52 larger credit unions, which together hold almost half of the sector assets, become capable of providing new personal current accounts services, including a range of payment services including debit cards, and overdrafts.

It also says that more and more credit unions will also be expanding their digital and online offerings.

The report also says restructuring is expected to continue, albeit likely at a slower pace than over the past two years.

The Irish League of Credit Unions (ILCU) said it welcomed the recommendation to raise the credit union interest rate cap from 1% to 2% per month, particularly in the context of Personal Microcredit Scheme (PMC) loans.

It added that this will enable credit unions to compete more effectively with moneylenders, who charge much higher rates.

“This scheme is designed to provide access to credit to the most vulnerable in our society, and to offer a viable alternative to moneylenders,” said Ed Farrell, CEO of the ILCU.

“Any measure that can assist with growing this initiative is a positive step.”

Kevin Johnson, CEO of the Credit Union Development Association (CUDA), said he hoped the Credit Union Registrar will now embrace the proposals contained in today’s report.

He said he hoped in particular the Register will implement the proposals that will see those credit unions with the skills and financial strength needed, permitted to provide more credit.

“All of which will make different forms of credit more accessible to a greater number of people,” he added.

Mr Johnson also said that credit unions demonstrated incredible resilience throughout the recession.

He said this can be attributed to good governance and compliance with relevant regulation which sees them occupy the position of a trusted advisor to their members.

“They have earned the right to legislation and regulations that mirror this. The report includes lending proposals which are particularly important – not least, the basis of the calculation of permitted limits,” he added.

Article Source:

Revenue sees Local Property Tax compliance rate of 97%

A total of €482m has been paid by households in Local Property Tax to Revenue for 2018.

This includes about €2m in household charge arrears.

Revenue also reported a high compliance rate of 97%, which is in line with previous years.

Today’s figures from Revenue show that Carlow was the most compliant county when it came to paying Local Property tax last year with 99.6% of households paying it.

Donegal was the least compliant with 93.3% of households paying their Local Property Tax.

Revenue also said today that mandatory deduction at source for LPT has been applied for approximately 96,000 properties for last year.

The tax collectors also said that 797 cases were referred to the sheriff or external solicitors for collection.

Over 12,800 tax clearance requests were refused due to the non-payment of Local Property Tax, of which almost 97% were subsequently granted clearance following mutually acceptable payment solutions.

Revenue also noted that over 13,280 valuations have been increased arising from a combination of self-correction and Revenue challenges.

Revenue also today reminded property owners who have not already paid, or made arrangements to pay their 2019 Local Property Tax, that Thursday 10 January is the payment deadline to pay in full by debit or credit card, cheque or annual debit authority.

Article Source: <a href=”” target=”_blank”></a>

May faces battle to save Brexit deal as Commons vote looms

British Prime Minister Theresa May will continue efforts to win over Conservative critics of her Brexit deal as MPs return to Westminster, but both wings of the party warned that the plan is unlikely to receive support.

As the Commons returns from its Christmas break, Mrs May is expected to step up efforts to woo potential rebels while working with Brussels on further safeguards to address concerns about the Withdrawal Agreement.

But a significant number of Tory Brexiteers remain opposed to the Withdrawal Agreement and appear relaxed about the prospect of a no-deal scenario with the UK leaving the European Union on March 29 with no transitional arrangements in place.

Former Cabinet minister John Redwood said a no-deal Brexit “will work just fine” despite the “idiotic” warnings about potential shortages of food and medicines.

On the other side of the Tory divide, pro-EU veteran Ken Clarke said Mrs May’s deal – which he would be prepared to support – is “dying” and he would be “amazed” if the mood of MPs had changed over the Christmas break.

Instead, he called for Brexit to be delayed until a way forward can be found.

The prime minister delayed a vote on her Brexit deal last month, with MPs set to resume debate on it on Wednesday ahead of a vote the following week.

She is said to be considering offering MPs further safeguards about the Irish backstop – the measure aimed at preventing a hard border on the island of Ireland which critics fear could leave the UK indefinitely bound into a customs union with the EU and prevent future trade deals with countries around the world.

But former Brexit minister Steve Baker rejected the proposals, saying they were a “tedious and desperate attempt to rescue an unsalvageable deal”.

The Daily Mail reported the prime minister is working on a “double lock” to put a time limit on the backstop.

Officials are reportedly drawing up a possible Commons amendment to the Brexit vote which would give parliament the right to serve notice to the EU of an intention to quit the backstop after 12 months if Brussels fails to agree a trade deal with the UK that would resolve the issue.

Meanwhile, Mrs May is also seeking a written guarantee from the EU that a trade deal can be agreed within 12 months of the transition period ending.

The Times reported that the Prime Minister will host Conservative Brexiteers for drinks on Monday and Wednesday as part of a charm offensive.

On Friday, Mrs May had a “friendly” call with European Commission president Jean-Claude Juncker and the pair are expected to keep in touch next week, fuelling speculation about efforts to win further concessions from Brussels ahead of the Commons vote, widely expected to be on January 15.

As part of the no-deal planning, a major exercise will take place on Monday with up to 150 lorries testing out plans to use Manston airfield near Ramsgate as a mass “HGV holding facility” to alleviate congestion on the roads to the Channel ports.

Meanwhile, a dredger has been seen working in Ramsgate harbour, the port which is proposed as an alternative freight route to Europe if a no-deal Brexit results in chaos at Dover and the Channel Tunnel.

Article Source:

Revenue collected €54.5 billion in taxes and duties in 2018

The Revenue Commissioners collected €54.5 billion in taxes and duties for the Exchequer in 2018, according to preliminary results published today.

Revenue completed 572,785 audit and compliance interventions, which yielded €572.6 million for the government coffers. They settled 22 tax avoidance cases yielding €5.7 million and secured 17 criminal convictions for serious tax evasion and fraud.

Last year Revenue seized over 67 million cigarettes, which included 23.5 million cigarettes, with an estimated potential loss to the Exchequer of €37.5 million, discovered in March 2018 in a counterfeit cigarette factory. 6,487.

Nine kilos of drugs with an estimated value of just over €33 million were also seized in 2018.

Revenue Chairman, Niall Cody, said, “Against a backdrop of continued strong growth in the economy, Revenue collected €54.5 billion in taxes and duties for the Exchequer as well as over €13.5 billion on behalf of other Departments, Agencies and EU Member States.”

He said continued strong levels of timely, voluntary compliance by taxpayers “reflect the reality that the vast majority of individuals and businesses pay the right amount of tax, on time”.

Mr Cody said Revenue support voluntary compliance by making it as easy as possible, and the authority is focused on optimising its service to taxpayers. “We acknowledge their engagement and that of tax practitioners and agents in the very strong compliance we have seen again in 2018,” he said.

Revenue has seen a transformation of the administration and collection of payroll taxes. Mr Cody said the authority had completed work on the modernisation of the PAYE system, which came into effect on 1 January 2019. “We recognise that the new reporting arrangements represent a fundamental adjustment for employers and during 2018 we undertook a range of initiatives, including over 77,000 employer visits, to assist employers, and their tax agents, in understanding the changes. At close of business on 3 January, payroll details for 823,710 employees have been submitted.”

Article Source:

Mortgage lending growth highest in 9 years – Central Bank

Mortgage lending recorded its highest growth rate since 2009 during the month of November, according to figures published by the Central Bank, continuing a trend of positive lending seen in recent months.

Net mortgage lending was €131 million in November, while annual growth was €964 million or 1.3%.

Banks held €12.3 billion more in household deposits than loans at the end of November. This means that Irish household deposits are net funders of the banking system, with an overall loan-to-deposit ratio of 0.88.

At the same time, total loans to households declined by 1.1% in the year to the end of November.

The Central Bank said consumer lending was €22 million in November, and new lending exceeded repayments by €233 million.

Article Source: