Updates to the Tax Debt Warehousing Scheme

Tax Debt Warehousing Scheme Updates Interest Reduced to 0%

On 5 February 2024, the Minister for Finance, Michael McGrath, announced significant changes to the Tax Debt Warehousing Scheme.

The Tax Debt Warehousing Scheme allowed businesses who experienced trading difficulties during the COVID-19 pandemic to defer paying certain tax liabilities until they were in a better financial position.

Minister McGrath has reduced the interest rate applying to warehoused tax debt to 0% from 5 February 2024. In addition, Revenue has confirmed that, where a business has already paid warehoused debt, which was subject to interest at 3%, it will get a refund of that interest.

Businesses who availed of this Scheme still have until 1 May 2024 to pay the warehoused debt in full or to enter into a formal payment plan with Revenue. Revenue confirmed that it is taking a flexible approach in relation to payment plans for warehoused debt. This will include the possibility to extend the duration of payment plans beyond the typical three to five-year duration on a case-by-case basis, and that an initial down payment may not always be required.

If you would like our assistance with agreeing a payment plan with Revenue, please contact us.

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Infrastructure Guidelines – Outline of Changes to the Public Spending Code

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Infrastructure Guidelines – Outline of Changes to the Public Spending Code

From January 1st 2024, changes have been made to the Public Spending Code (PSC) concerning infrastructural and large-scale capital projects. The new “Infrastructure Guidelines”, which have replaced the PSC requirements for capital expenditure as previously outlined in Public Spending Code: A Guide to Evaluating, Planning and Managing Public Investment, December 2019, apply to all Government departments, local authorities, the HSE, public bodies, and any other body in receipt of public funding. The new “Infrastructure Guidelines” describe a new project lifecycle, with a series of stages to be completed prior to implementing a project. Here we will cover the key areas you should be aware of, while our Expert Team is available to provide further explanation and assistance.

Key Players in the new Guidelines

Addressed mainly to stages in project lifecycle relating to evaluation, planning and management of public investment projects, the “Infrastructure Guidelines” create new responsibilities for key individuals involved in these areas. Three individuals or positions are of particular importance, these being the Accounting Officer (AO), the Approving Authority (AA), and the Sponsoring Agency (SA).

The AO’s responsibilities are considerable here. It falls to the AO to ensure that their Department/Office/Body and any other relevant agency under their remit are compliant with these guidelines. Additionally, the AO is responsible for managing the budgets of the individual projects and the capital budget for their area overall.

Ultimately the AO is responsible for the project and the “Infrastructure Guidelines” provide a wide range of specific responsibilities for the AO to fulfill, such as monitoring the project as it is implemented and Assessing the Final Business Case. Alongside the AO in fulfilling these responsibilities is the AA, referring to the Department funding the project. Both the AO and AA should be aware of the wide-ranging responsibilities set out in the “Infrastructure Guidelines”.

The SA may be a government department, local authority, state agency, higher education institute, cultural institution or other state body and its responsibilities lie in evaluating, planning and managing public investment projects. Again the “Infrastructure Guidelines” set out key tasks that must be fulfilled.

Stages in Project Lifecycle

The core of the new “Infrastructure Guidelines” relates to the new stages of the project lifecycle which have been established and which all projects must follow. The new guidelines focus on three preliminary stages in the lifecycle which occur prior to implementation, these being:

  1. Strategic Assessment & Preliminary Business Case
  2. Pre-tender – Project Design, Planning and Procurement Strategy
  3. Post Tender – Final Business Case

It should be noted that the guidelines provide a simplified version of this process for projects with an estimated capital cost of less than €20m. For these projects, the following two approval stages must be fulfilled prior to implementation:

  • Preliminary Business Case
  • Post Tender – Final Business Case

The “Infrastructure Guidelines” emphasise that these stages are “incremental”. This means that a project is not locked in merely from having passed the first or second stage. Should a project at, for example, the third approval stage, be deemed to be no longer worthwhile for whatever reason, the project can be set down.

Extensive guidelines for following these phases have been made available by the Department of Public Expenditure, National Development Plan Delivery and Reform. Below are the key areas relevant parties should consider:

1. Strategic Assessment & Preliminary Business Case

This “Strategic Assessment” refers to the process of determining and defining the rationale for a project and ensuring that it is in line with government policy. This assessment should be submitted to the Approving Authority which will then, if acceptable, move the project to the Preliminary Business Case.

At this stage, the Sponsoring Agency must develop a Business Case which sets out, for instance, the investment rationale and objectives of the project. It should include a description of the short-list of potential options to deliver objectives set out, assessment of affordability within existing resources, assessment of delivery risk, and several other areas. The purpose of the Preliminary Business Case, then, is to provide the AO and AA with information regarding the viability and desirability of public spending proposals. It also creates a framework for assessing  a project’s costs, benefits, affordability, deliverability, risks and sensitivities.

2. Pre-tender – Project Design, Planning and Procurement Strategy

The purpose of this stage is to develop the options set out in the Preliminary Business Case, with the end goal of developing a Detailed Business Case which will set out procurement strategy and project execution plan. This is a process of reviewing and confirming assumptions; approval from the AO and AA here moves a project to Tender. The critical issue to be considered in the Design and Planning Stage is ensuring that output requirements are given strong definition to avoid amendments later in the project.

3. Post Tender – Final Business Case

The development of the Final Business Case represents the final stage in the approval process for a project. Again the purpose here is to subject a project to critical scrutiny, using understanding developed relating to costs, benefits, risks, and delivery and applying this. The Final Business Case will be the document which will be used by the Approving Authority to determine whether a project is to progress to the award of contracts. It should be noted that this occurs after tendering. However, completion of the tendering process does not represent the award of a contract.

Major Projects

As noted above, for projects costing below €20 million, the above process has been simplified, requiring a Preliminary Business Case and a Final Business Case. For projects costing above €200 million, considered as “major projects” in the new guidelines, there are additional requirements in the project lifecycle.

Specifically, all “major projects” must, at the Preliminary Business Case stage, pass through an External Assurance Process. Furthermore, at this same stage, the Preliminary Business Case must be submitted to and reviewed by the Major Projects Advisory Group. Finally, Government consideration must be given to the project at both the Preliminary Business Case and Final Business Case stages.

Contributors
                                                    

Vincent Teo | Partner & Head of Public Sector & Government Services

Vincent Teo
Partner & Head of Public Sector & Government Services

 Dr. Conor Dowling | Research & Policy Executive | Risk Consulting

Dr. Conor Dowling
Research & Policy Executive
Risk Consulting
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Preparing for Mandatory Sustainability Reporting

Preparing for Mandatory Sustainability Reporting

In recent years, the European Union (EU) has been at the forefront of environmental regulation and policy actions aimed at mitigating climate change. In this regard, two of the most important policy changes that entities should be aware of are CSRD and ESRS, which we will discuss in this article.

CSRD and ESRS form part of a broader European regulatory landscape that aims to accelerate a green and just transition. These measures were triggered by the European Green Deal, a set of policy initiatives with the overarching aims of making the EU climate neutral by 2050, to decouple economic growth from resource use and to ensure that no person and no place are left behind.

What is CSRD?

CSRD stands for Corporate Sustainability Reporting Directive, an EU Directive that came into force on January 5, 2023. The aim of the Directive is to strengthen standards regarding how organisations report their environmental, social and governance (ESG) information. Furthermore, it aims to introduce a comprehensive and standardised means for entities within scope to disclose information regarding the sustainability-related impacts of their activities and thereby provide increased transparency to investors, funding bodies and institutions, consumers, the general public and other stakeholders on the impact their entities have on people and the environment.

The CSRD builds on the existing requirements of the Non-Financial Reporting Directive (NFRD) by expanding the number of entities required to mandatorily report on sustainability matters and to increase the level of information and disclosures required to be reported.

All EU member states have been given a maximum of 18 months to incorporate the provisions of the European CSRD into their national law.

What is ESRS?

ESRS stands for European Sustainability Reporting Standards. The European Commission adopted these standards on 31st July 2023. The ESRS are the sustainability reporting standards that entities subject to the CSRD will be required to apply.

The standards address a wide range of environmental, social, and governance challenges. Initially, the ESRSs consist of 12 standards including:

  • 2 cross-cutting standards
    • ESRS 1 General Requirements and ESRS 2 General Disclosures
  • 5 sector agnostic environment standards
    • ESRS E1 Climate Change
    • ESRS E2 Pollution
    • ESRS E3 Water and Marine Resources
    • ESRS E4 Biodiversity and Ecosystems
    • ESRS E5 Resource Use and Circular Economy
  • 4 sector agnostic social standards
    • ESRS S1 Own Workforce
    • ESRS S2 Workers in the Value Chain
    • ESRS S3 Affected Communities
    • ESRS S4 Consumers and End Users
  • 1 sector agnostic governance standard
    • ESRS G1 Business Conduct

Other ESRSs including sector-specific standards, SME proportionate standards and third-country company standards are expected to follow in the coming years.

The ESRSs are comprehensive in scope and require entities to rethink their reporting and sustainability strategies, resulting in significant changes to how entities will report on their ESG impacts going forward.

These new reporting requirements for entities will be phased in over time.

What is the CSRD Implementation Timeline?

Entities will come within the scope of the CSRD in four waves depending on the size and nature of the entities and the effective dates for reporting are as follows:

FY 2024 (Report in FY 2025)

  • Large undertakings and large groups with more than 500 employees that have securities listed on an EU-regulated market (i.e. Listed PIEs)
  • All entities currently subject to NFRD
  • Non-EU companies that have securities listed on an EU-regulated market and who meet the above criteria

FY 2025 (Report in FY 2026)

  • EU PIEs with less than 500 employees
  • All other large undertakings and large groups

FY 2026 (Report in FY 2027)

  • SMEs listed on an EU-regulated market
  • Certain small and non-complex institutions
  • Captive insurance undertakings

Note however that listed SMEs may opt out until years commencing January 1, 2028 and separate disclosure standards are expected to be developed for these SMEs.

FY 2028 (Report in FY 2029)

  • Ultimate non-EU parent companies who have generated net turnover of greater than €150m in the EU for each of the last 2 consecutive years and who have at least either a large subsidiary in the EU or an EU branch generating a net turnover of greater than €40m in the preceding year

Note however that separate disclosure standards are expected to be developed for ultimate non-EU parent companies.

What is a large undertaking?

Currently a large undertaking is defined as a large EU company or an EU company that is a parent of a large group where at least two of the following three criteria are exceeded on two consecutive balance sheet dates:

  • > 250 average number of employees in the financial year
  • > €40 million turnover
  • > €20 million total assets

How many entities are expected to be subject to CSRD?

It is currently estimated that approximately 49,000 entities will be subject to CSRD across the EU. This is a significant increase on the estimated 11,000 entities currently subject to NFRD.

What is the scope of the sustainability reporting requirements?

  • Entities in scope will be required to report on a double materiality basis. This means that entities will have to disclose not only the impacts on financial performance they face from a changing climate and other ESG matters (i.e. financial materiality), but also the impacts they themselves may have on the environment and society (i.e. impact materiality). If a matter is material from either viewpoint then an entity must disclose it.
  • The type of sustainability information that each entity will be required to disclose will depend on the specific circumstances and characteristics of each entity and their activities. However, generally entities will be required to disclose information on governance, climate, strategy, management of risks and opportunities, and various metrics and targets related to ESG matters.
  • Entities within the scope of CSRD will automatically also be in scope of Article 8 of the EU Taxonomy Regulation which requires reporting in respect of three KPIs and for eight qualitative disclosures to be made.
  • Entities will also have to consider and provide ESG information in respect of their entire value chain. However, to assist entities with the transition to the new requirements, for the first three years of reporting, where all reportable information on the value chain is not available, entities may elect to explain the efforts made to obtain this information, the reasons why the information could not be obtained and the plans the entity has to obtain the information in the future.

Where should entities report the required ESG information?

The information required by the ESRSs should be reported within the Directors’ Report and published with the entity’s annual financial statements.

In what format should entities report?

Entities must report sustainability information in a format that is both human readable and machine readable. Reports will have to be created in accordance with the European Single Electronic Format and be electronically tagged.

Is independent third-party assurance mandatory?

The assurance of ESG information by an appropriately qualified third party (which subject to national law options may include statutory auditors and other assurance service providers) is mandatory for those entities that fall within the scope of CSRD. Initially the level of assurance to be provided will be limited but over time the aim is for the level of assurance required to move to reasonable i.e. similar to the level of assurance currently required in respect of the annual audit of financial statements.

In order for an assurance provider to be able to provide an assurance opinion it will be crucial for the ESG data reported by entities to be verifiable. Similar to financial reporting, entities will therefore need to establish sound control frameworks over the capture and reporting of ESG data. A core element of this will be the establishment of effective ESG governance structures and the tone from the top. Roles and responsibilities of all involved in collecting ESG data will need to be clearly defined, where the data is stored and / or who holds the data (internally or externally) will need to be identified, systems for the collection and processing of the data will need to be determined, implemented and controlled and the data will ultimately need to be validated internally in the first instance before it is submitted to the assurance provider for audit.

If you require further information in relation to sustainability and future reporting requirements, please reach out to Natalie Kelly (Partner, Audit & Assurance), Fiona O’Sullivan (Director, Risk Consulting) or Ciara Long (Senior Associate, Audit & Assurance) for assistance.

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Central Government Accounting Standards – What You Need to Know

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Central Government Accounting Standards – What You Need to Know

From January 1st, new Central Government Accounting Standards (CGAS) will see significant reform of financial reporting for all Government Departments and Offices of Government. These new standards, being based on the International Public Sector Accounting Standards (IPSAS) generally favoured by the European Commission, aim to modernise financial reporting in Ireland along lines proposed by successive IMF and OECD reports.

The CGAS will change how public sector Vote accounts are to be prepared, requiring that financial statements also include information prepared on an accruals basis in the Statement of Financial Position. This article will run through the key changes imposed by the CGAS and explain the principles behind these.

Requirements

The CGAS coming into effect from January 1st are envisioned as a stage in a wider process of reform of financial reporting in Ireland. For the moment, the CGAS and their requirements apply to the following bodies:

  • All Departments and Offices of Government
  • The Houses of the Oireachtas Commission
  • The National Training Fund
  • The Social Insurance Fund

For these bodies, the CGAS imposes requirements as to how their Statements of Financial Position are presented. Specifically, they are now required to account for all of the following in their Statements:

  • Property, Plant and Equipment
  • Intangible Assets
  • Impairment of Non-Cash Generating Assets
  • Impairment of Cash Generating Assets
  • Service Concession Arrangements
  • Inventory
  • Leases
  • Provisions, Contingent Liabilities, Contingent Assets
  • Short-Term Employee Benefits

For each of these areas, a relevant CGAS detailing the exact requirements has been prepared by the Department of Public Expenditure, NDP Delivery and Reform. In addition, each of the CGAS has been provided with a manual, or Central Government Accounting Manual (CGAM). These manuals provide guidance on how the CGAS should be implemented and are a support for Finance Officers working to bring their organisation into line with the CGAS.

Government documents relating to the CGAS have emphasised that all relevant bodies must ensure that the principle of materiality is observed in their financial reporting. As an accounting principle, materiality requires that financial statements include all information and items that relevant decision makers, such as investors, might consider to impact their activity. In other words, an organisation’s economic activity can be considered to be material if it might be of interest to any and all bodies which would view that organisation’s financial statements.

In principle, then, the CGAS are to replace a cash-based system of financial reporting with reporting carried out on an accruals basis. Under the CGAS, an organisation must record economic activity regardless of whether cash was exchanged or involved in that activity. For example, under the CGAS, contingent liabilities such as guarantees, where no cash exchange has yet occurred, have to be reported.

Transitions and Enforcement

As noted, the CGAS are being adopted as part of a modernisation of Irish financial reporting, with the aim of bringing Ireland into line with the majority of OECD and EU countries. Ultimately, this reform project will formalise accrual accounting financial reporting in Ireland. Given that this reform is to secure the international credibility of financial reporting in Ireland, Central Government guidance has emphasised the importance of compliance with the CGAS.

Where a relevant body is unable to comply fully with any of the CGAS, sanction for a temporary derogation should be secured from the Government Accounting Unit in the Department of Public Expenditure, NDP Delivery and Reform. This application should include a timeline for how the body will build its compliance with whatever elements of the CGAS it cannot currently meet. This sanction will have to be renewed on an annual basis; sanction received in 2024 will not apply in 2025, and so on. Where a Department or Office is non-compliant, this must be stated in their Statement of Accounting Policies and Principles in the Appropriation Accounts, as should whether any temporary derogation has been received.

It should be noted that as government reform of financial reporting is an ongoing project, future CGAS with new requirements are imminent. Continued monitoring of this area is recommended to ensure key reforms are not missed.

Contributors
                                                    

Vincent Teo | Partner & Head of Public Sector & Government Services

Vincent Teo
Partner & Head of Public Sector & Government Services

 Dr. Conor Dowling | Research & Policy Executive | Risk Consulting

Dr. Conor Dowling
Research & Policy Executive
Risk Consulting

 

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Reflecting on our 2023 Partnership with Aware

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Crowleys DFK Charity Partnership with Aware

As 2023 draws to a close, we reflect on the first year of our two-year partnership with Aware, marked by a significant fundraising total of €17,436.

Throughout the year, we participated in various fundraising events organised by Aware including the Liffey Loop, Resilience Lunch and Corporate Golf Day. Additionally, our employees generously signed up to our Donate As You Earn (payroll giving) programme and took part in a number of other internal initiatives.

Beyond fundraising, we partnered with Aware to provide learning and development opportunities for our employees in the area of mental health. Notably, our senior leadership team attended a half day workshop on Managing Mental Health in the Workplace. This informative workshop provided valuable insights and practical tips for developing mental health conversations. It received very positive feedback from all participants.

Speaking about our partnership with Aware, James O Connor, Managing Partner, commented:

“Looking back on 2023, we appreciate the contributions of our employees which not only led to a substantial fundraising achievement but has also actively promoted awareness and understanding of mental health within our firm. We look forward to building on these foundations in 2024.”

Drew Flood, Business Development Manager in Aware, commented:

“I want to thank everyone in Crowleys DFK for the wonderful contribution you have made over the last year. It has been absolutely brilliant working with you.

I want to thank you for the money you have raised but more importantly I want to thank you for highlighting ‘having the conversation about mental health’ in the organisation and attending our educational workshops.

We have had over 30,000 calls on our support line this year and at the end of the year we will have over 50,000 people contacting Aware. Your contribution has really made a big difference to all the service users.  On behalf of everyone in Aware a big thank you to everyone in Crowleys DFK and thank you for putting mental health on the map!”

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Crowleys DFK Introduce Work From Anywhere Policy

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Work from Anywhere Policy

In the ever-evolving landscape of the modern workplace, adaptability is key. We value the flexibility of our employees in effectively carrying out their job responsibilities, all the while providing the highest level of support to our clients.

We are excited to announce the latest addition to our suite of work-life balance and flexibility policies: a “Work from Anywhere” Policy.

The policy allows employees to perform the duties of their employment, away from their Crowleys DFK office for temporary periods within the working year, including time spent outside Ireland.

James O’Connor, Managing Partner commented:

“Our decision to embrace a Work from Anywhere policy is rooted in the understanding that the future of work is dynamic, and Crowleys DFK are committed to staying ahead of the curve. This policy is designed to empower our employees by enhancing the work experience and further cultivate a supportive work environment that values work-life balance, flexibility and inclusivity.”

If you are interested in a career with us, please check out our careers for experienced professionals or our graduate programme.

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Share Options: New PAYE Withholding Requirements from 1 January 2024 – What does this mean for Employers?

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Share Options - PAYE Withholding Requirements

The shift of share options from the Irish self-assessment system to PAYE withholding from 1 January 2024 is a significant change arising from Finance (No. 2) Bill 2023. Prior to this, employees were required to report and remit taxes within 30 days of exercising an option on Form RTSO1.  Additionally, they were required to file an income tax return for the relevant year.

The changes set out in the Finance Bill outline that under the new system, employers are now required to report and make withholdings under the PAYE system on any gains arising after 1 January 2024 on the exercise, assignment or release of share options by employees.

While employees are certain to welcome this change, companies have been given a limited time frame to implement additional procedures to ensure they are compliant with the new obligations.

What should employers do to prepare for the upcoming change in employer reporting obligations?

  • It is advisable that employers communicate this change in the tax treatment to their employees. Companies should also update their share option plan documentation in light of this change.
  • Employers will need to review the share option plan documentation in the context of funding the liabilities. This is because employees will need to be able to fund the tax liability collected through the PAYE system. A number of shares (received from the exercise) may need to be sold under a ‘sell to cover mechanism’ to ensure the necessary funds are available. This is particularly important for companies that allow previous employees to exercise their share option after their employment has terminated.
  • Employers should also ensure accurate records are maintained on an ongoing basis for all share option grants. With regards to mobile employees, employers will also need to monitor both Irish and worldwide workdays during the grant to vest period. This is required to calculate the Irish taxes due on the date of the exercise of the options. Furthermore, a process must be in place to determine whether the gain is subject to PRSI or exempt.
  • Employers will need to ensure that the process for reporting the gains arising from the exercise of share options is completed within the required timeframe. Gains arising from the exercise of share options are regarded as notional payments. Therefore, they must be reported on or before the exercise of the option.

Employer Annual Share Reporting

Employers are still obliged to file an RSS1 return by 31 March following the calendar tax year to report the grant, exercise, assignment, or release of an option.

If you require assistance with the annual share reporting return for share options, please contact us.

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Budget 2024 Analysis

Budget 2024 Highlights

Delivering a €14bn Budget package, Minister McGrath described Budget 2024 as a ‘’step change” in planning for the future. As we have navigated through unprecedented challenges – the pandemic, Brexit, the war in Ukraine, and rates of inflation not seen for some 40 years, the Irish economy made a strong rebound in the past 12 months.

However, the continued effects of inflation, capacity constraints in the housing and labour markets and the current cost of living crisis have resulted in a deterioration of living standards for individuals, families and businesses for which today’s Budget contained immediate once-off supports aimed to respond to the acute needs of those who need it the most.

While Ireland continues to generate strong tax receipts, for the first time in several years there is a downward revision for 2023 as compared to earlier projections, which will continue into next year. Whilst the Minister welcomed a projected Government surplus of €8.8 billion for next year, it was acknowledged that our tax receipts must be used wisely to deliver a comprehensive set of financial supports and set the scene for significant future investments in public services such as housing, health, education and transport.

Income tax changes were mainly limited to a threshold increase to €42,000, above which the higher 40% rate of tax would apply, small increases to the main income tax credits and USC rates.

Whilst the Minister confirmed that we will keep our attractive 12.5% corporation tax rate, today’s Budget is set to make a fundamental change in global tax policy with the introduction of a new 15% minimum tax rate for large companies as provided for under the OECD Pillar Two Agreement.  This is a once-in-a-generation reform to our corporation tax system, and marks the culmination of a ten-year, global project to reform the taxation of multi-national enterprises.

For the SME sector, we see positive enhancements made to The Employment Investment Incentive Scheme (EII) and the introduction of a new targeted capital gains tax rate of 16% for angel investors when disposing of qualifying investment. The changes will help encourage investment in innovative start-up SME’s and unlock more equity investment in smaller, early stage, businesses that are typically most in need of funding.

The extension of the R&D Tax Credit regime, with an increased tax credit from 25% to 30% is welcomed as Ireland aims to stay competitive in the FDI space.

What was significant though was the Minister’s reference to a “future-proof” of public finances by establishing two new funds to save for future generations. The larger of the funds is the Future Ireland Fund, set to grow to €100 billion by 2035, to assist with paying for the additional health and pension costs associated with Ireland’s ageing population.

The government will also establish a second, smaller €14 billion infrastructure and climate fund, available to catch up on targets to cut greenhouse gas emissions and act as a buffer against capital spending cuts in any future downturn.

It is likely that the one-off support measures will grab the media headlines. However, it is the discussions and outcomes around the changing future tax base to enable us to fund public services and put in place a long-term plan that will make the economic future safer for all.

View the Budget 2024 highlights here.

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Budget 2024 Highlights

Budget 2024 Highlights

Minister for Finance, Michael McGrath delivered the final Budget today, 10 October 2023. Below we outline the highlights of Budget 2024.

Personal Tax
  • Income tax standard rate bands increase by €2,000 to €42,000 (single person), with the married single earner band increasing to €51,000.
  • Personal, PAYE, Earned Tax credits to increase by €100 to €1,875.
  • Home Carer Tax Credit will increase by €100 to €1,800.
  • Incapacitated Child Tax Credit to increase to €3,500.
  • Small change to the second rate-band of Universal Social Charge which will increase from €22,920 to €25,760. The 4.5% rate is reducing to 4% from 1 January 2024.
  • Increase in the exemption from Income Tax, USC and PRSI to €400 on profits arising from domestic microgeneration of electricity which is supplied to the grid.
Enterprise/SMEs/Agri-sector
  • Introduction of 15% Corporation Tax rate, under the OECD Pillar Two agreement, on trading profits of large companies. SME sector unaffected. Further details to be announced in the Finance Bill.
  • Capital Gains Tax relief for Angel Investment in innovative start-ups. Qualifying investments will be certified by Enterprise Ireland with a minimum investment in new shares of at least €10,000. Relief will apply if shares are held for at least 3 years. A reduced rate of Capital Gains Tax of 16% will apply on a gain of up to twice the initial investment. A lifetime limit of €3m will apply to the relief.
  • From 1 January 2025 the upper levels of Retirement Relief will apply on disposals to children and to others between the ages of 55 and 70. A €10m limit will be introduced for disposals to a child up to the age of 70.
  • With effect from 1 January 2024 the minimum holding period of investment to claim relief under the Employment Investment Incentive (EII) scheme is being standardised at 4 years with the limit on such investments being increased to €500,000. Further changes to EII will be set out in the Finance Bill.
  • The rate of the Research & Development Tax Credit is being increased to 30% in respect of 2024 expenditure. The first-year payment threshold, which allows for a claim to be repaid in full rather than spread over 3 years, is being increased to €50,000.
  • Section 481 Film Relief investment cap being increased to €125m.
  • Accelerated capital allowances for energy efficient equipment are to be extended for a further two years to the end of 2025.
  • Accelerated capital allowances for farm safety equipment are to be extended to 31 December 2026.
  • Stamp Duty Consanguinity relief which reduces the duty applicable on transfer of farmland between family members from 7.5% to 1% is being extended to 31 December 2028.
  • The threshold for Stock Relief for registered farm partnerships is increasing to €20,000, while the aggregate lifetime limit of stamp duty relief for young trained farmers is being increased to €100,000 from 1 January 2024.
Housing/Cost of Living Measures
  • The Rent Tax Credit is being increased to €750. The tax credit will also be extended to parents paying their children’s rental costs while in third level education in the case of Rent-a-Room accommodation or “digs”.
  • A new Rented Residential Relief is being introduced for Landlords. The relief will be granted at the standard rate of tax and will be as follows; €3,000 in 2024; €4,000 in 2025; and €5,000 in 2026 and 2027. The tenancy must be registered to the PRTB, or the property let to a Local Authority. The value of the relief will be €600 to €1,000. The relief will be clawed back if the property does not remain in the rental market for the 4 years.
  • The Help to Buy (HTB) scheme is being extended to the end of 2025. Amendments are being made to the scheme to enable contributions through the Local Authority Affordable Purchase scheme to be considered when calculating the 70% loan-to-value requirement.
  • A temporary one-year Mortgage Interest Tax relief of up to €1,250 is being introduced for homeowners on variable or tracker mortgages with outstanding mortgage of between €80,000 and €500,000 on the 31 December 2022 and fully LPT compliant. Relief will be at the standard rate on the interest rate increases between 2022 and 2023. The relief will be claimed on filing a tax return for 2023.
  • The rate of the Vacant Homes Tax is being increased with effect from 1 November 2023 to 5 times the property’s existing LPT liability.
 VAT
  • The registration thresholds are being slightly increased to €40,000 for the supply of services and €80,000 for the supply of goods from 1 January 2024.
  • From 1 January 2024 the rate of VAT on audiobooks and eBooks will be reduced to 0%.
  • The 9% VAT rate for Gas and Electricity supplies is being extended to 31 October 2024.
  • The supply and installation of solar panels in schools is being reduced to 0% from 1 January 2024.
  • The Farming VAT flat rate is being reduced to 4.8% from 1 January 2024.
 Other Measures
  • The fund for the Charites VAT Compensation Scheme is being increased from €5m to €10m.
  • The aggregate value of items donated in a year under the Heritage Donation scheme to be increased from €6m to €8m.
  • The tapering relief applied to benefit in kind on battery electric vehicles is being enhanced so that the current Original Market Value deduction of €35,000 remains until 2025 followed by €20,000 in 2026 and €10,000 in 2027. The universal relief of €10,000 to the OMV is being extended for a further year to end 2024.

Read our tax team’s analysis of Budget 2024.

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Ukraine Credit Guarantee Scheme provides low-cost loans to Irish businesses

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Ukraine Credit Guarantee Scheme

The Ukraine Credit Guarantee Scheme (UCGS) will provide €1.2 billion in more affordable funding to Irish businesses who have been impacted by the war in Ukraine.

Eligible borrowers will be able to access funds ranging from €10,000 to €1 million, capped at the greater of either 15% of their recent turnover or 50% of their annual energy expenditure. There is no personal guarantee or collateral required for loans up to €250,000.

Financing will be offered through a range of credit facilities, including term loans, working capital loans and overdrafts.

The scheme offers repayment terms of up to six years with discounted interest rates.

Who is eligible?

This funding is available to Irish SMEs, primary producers and small mid-caps (defined as businesses with up to 499 employees) who have been impacted by economic challenges arising from the war in Ukraine.

To be eligible for this scheme, operating costs must have risen by over 10% since 2020.

The scheme will be available up to the 31 December 2024 or until it has been fully subscribed.

How to apply?

Step 1: Apply for an Eligibility Code from the SBCI through their online hub.

Step 2: Provide this eligibility code to a participating finance provider to begin the credit application process.

If you require assistance with your application for this funding, please contact Carol Hartnett from our Accounting & Financial Advisory Department.

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