News Archives - Page 3 of 224 - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

No deal Brexit would see consumer prices rise – retail group

The imposition of tariffs in the event of a no-deal Brexit will inevitably see consumer prices rising here, according to Retail Ireland.

Thomas Burke, director of the Ibec retail industry group, said the imposition of tariffs of up to 30 or 40% on some products couldn’t be absorbed by the retail industry.

The sector, he said, was operating on extremely tight margins of 3 or 4%.

“The challenge is what kind of Brexit we end up getting. The worst case scenario is a hard Brexit that brings WTO tariffs. If that happens, we’ll inevitably see increased costs in terms of the supply chain and increased consumer prices on certain products.”

He said retailers were increasingly preparing for such an outcome and were looking at diversifying the supply chain.

“You have to look at substituting products that would no longer be economically viable to stock. You have to see where the alternatives are locally or in continental Europe to ensure that consumers can get the products they want at a price they’re willing to pay.”

Thomas Burke was commenting as Retail Ireland published its latest monitor which examined the final months of last year, including the all important Christmas season.

“Overall, retail sales in the fourth quarter grew by about 2.7%. That’s pretty much in line with pre-Christmas targets for the sector,” Mr Burke said.

But the figure is masking some of the dynamics beneath the surface of the numbers, Retail Ireland says.

“What we are hearing from our members is that footfall in key shopping locations over the Christmas season was down considerably. That’s a worry in terms of the longer term sustainability of the sector and is further evidence of the move online by consumers,” he explained.

However, the industry is not under the same pressure as the UK retail sector where a number of big name brands have announced store closures in the last year.

“The dynamics of the Irish sector are very different. The UK retail landscape is challenged on a number of fronts. We’ve an economy that’s growing by around 7%. While that’s not being translated directly into performance by retail, the underlying fundamentals are much stronger,” Mr Burke said.

Article Source: http://tinyurl.com/kbwqb42

Soft Brexit may be ‘blessing in disguise’ to halt overheating risk

How Irish policymakers manage the fall-out from Brexit – regardless of the form it takes – will be important for assessing Irish credit fundamentals into the future, according to Canadian credit rating agency DBRS.

How effectively authorities use fiscal and macro-prudential policy tools to manage the eventual Brexit outcome are an important test in terms of the ability to manage the economy over time.

For now, the negative impacts of Brexit here have been hard to see and may even be helping cool an otherwise overheating economy, according to DBRS.

The UK economy has already slowed dramatically and last year it grew at 1.4pc, the weakest rate since 2012, with some economists citing the impact of Brexit uncertainty on investment.

But in Ireland, exports are booming, companies have relocated and created 4,500 jobs here, helping the economy to grow around 5.6pc last year. Booming company tax receipts have also pushed the budget into surplus.

“Despite the benefits to the Irish economy since the referendum, including many companies shifting resources from the UK to Ireland, the threat of a no-deal Brexit may in part be starting to apply some convenient friction to the Irish economy,” DBRS said in a report on the Irish economy.

“Concerns of economic overheating, given the supply constraints in labour and real-estate markets, could be exacerbated over the medium-term if the Brexit-related uncertainty that has loomed over Ireland were to evaporate following a benign outcome,” it noted.

For most European economies, Brexit will have a limited impact, but comes at a time when activity is already slowing quickly.

But for the economy here, the impact of Brexit, especially a cliff-edge no-deal, could be worse than in the UK.

There is a wide range of estimates for the impact here, from a hit of 4pc lopped off potential economic growth over the long-term to a loss of as much as 8pc versus a situation where the UK had remained in the EU.

Ireland’s recovery from the financial crash – based on the headline economic numbers alone – has been spectacular.

According to DBRS, real modified domestic demand, which strips out external distortions, has grown at an annual average rate of 4.6pc from 2014 to the third quarter of 2018, while employment growth has increased at an annual average pace of 3.3pc over the same period.

Those strong numbers however mask an increasingly uneven wealth distribution here.

While the poorest 10pc in terms of income do relatively well when compared with advanced European Union peers, where there are relatively equal income distributions, the next poorest 40pc do badly, according to Robert Sweeney, a policy analyst at TASC, an independent think-tank here.

Elsewhere, Davy Stockbrokers cut its outlook for UK economic growth to 1.0pc this year from 1.8pc previously.

The move from Davy came after the Bank of England last week cut its 2019 growth forecast for the UK to just 1.2pc.

“Brexit, tighter financial conditions and political uncertainties are now weighing on UK GDP growth,” Davy said.

“We expect a ‘soft patch’ in the first half of 2019 so that GDP growth slows to 0.1-0.2pc per quarter. On Brexit, we expect the status quo to be maintained via a deal or an extension of Article 50.

“We forecast 1.4pc GDP growth in 2020, with activity still held back by weak investment and productivity growth.”

Amid continuing uncertainty, ING Bank said that in a no-deal scenario it expects a sharp move lower for sterling, with euro/pound above 0.95, and even testing parity in case of a crash. The pound/dollar could drop to the 1.10-1.20 area, the investment bank said.

Central Bank governor Philip Lane has been formally nominated by eurozone finance ministers to be the next ECB chief economist.

His appointment is due to be confirmed at an EU summit in March.

His impending elevation comes with current ECB chief economist Peter Praet due to leave at the end of May.

Prof Lane, the only candidate put forward to replace Mr Praet, will have an important role in managing the sluggish eurozone economy when he takes up his new job.

Prof Lane’s departure will create a race to replace him at the Central Bank.

Deputy governor Sharon Donnery and Department of Public Expenditure and Reform secretary general Robert Watt, who was pipped by Prof Lane to the post the last time out, could be among the contenders to replace him.

Article Source: http://tinyurl.com/kbwqb42

Sterling drops after UK GDP data confirms slowdown

Sterling extended its fall today after data showed that Britain’s economy last year grew at its slowest since 2012, with Brexit uncertainty hitting investment.

The quarterly GDP numbers followed other data in recent weeks that paint a picture of a UK economy slowing into 2019 as businesses and consumers grow increasingly nervous about Britain’s departure from the European Union.

The UK’s gross domestic product growth in the final quarter of 2018 fell to a quarterly rate of 0.2% from 0.6%in the previous quarter.

This was in line with the average forecast in a Reuters poll but slightly weaker than the Bank of England estimated last week.

For 2018 as a whole, growth dropped to its lowest since 2012 at 1.4%, down from 1.8% in 2017.

The pound fell 0.3% to as low as $1.2895 after trading at $1.2923 before the data was released.

Against the euro, sterling dropped 0.3% to 87.72 pence from 84.55 pence earlier.

Analysts said that while the monthly data can be volatile, the figures do not bode well heading into 2019 with peak Brexit uncertainty and signs of slowing economies in the euro zone and the US.

Sterling last week suffered its worst weekly decline in a month, with a stalemate over Brexit weighing on the currency and leading the Bank of England to cut its UK growth forecast.

Brexit negotiations continue to hang over sterling and will likely dominate trading in the coming sessions.

Prime Minister Theresa May has rejected the idea of targeting a customs union with the EU and fears are growing that the British leader is playing a game of brinkmanship as she tries to secure backing for her withdrawal agreement ahead of the scheduled Brexit departure date of March 29.

Commerzbank analysts said that without an end to the uncertainty the pound would likely trade lower.

Article Source: http://tinyurl.com/kbwqb42

EU should hand back tax payments it would receive on Irish imports if there’s a ‘no deal’ Brexit – warning

The EU should hand back tax payments it would receive on Irish imports from the UK if there’s a no deal Brexit, a leading accountants’ group has warned.

If there’s no deal the EU will get 80pc of the VAT paid by Irish firms on UK imports under WTO rules, the Association of Chartered Certified Accountants (ACCA) said.

The ACCA said this money should be returned to Ireland as part of a support package if no deal arises.

Stephen O’Flaherty, chair of ACCA Ireland, said: “Many people will be surprised that under international WTO rules, imports into the EU from any other international region sees only 20pc being retained by the country of entry.”

“While Ireland was a net benefactor of EU investment during the financial crisis over 10 years ago, with Brexit it now finds itself in the eye of an international storm and the EU must maintain its flexible support.

“It can do this by ensuring that the revenue from UK WTO trade tariffs form an integral part of a far reaching economic support package that can help offset some of the financial upheaval of Brexit on businesses, communities and families.”

Separately, a series of business representative groups have called for a three-month extension for Irish businesses on their import VAT payments. After Brexit Irish firms will have to pay VAT upfront on their imports from the UK, resulting in a new squeeze on cashflows.

Finance Minister Paschal Donohoe has proposed that companies could wait until they make their VAT returns (due every two months) before paying, but business groups Ibec, the Irish Exporters Association, Chambers Ireland and others are looking for three months of grace.

Article Source: http://tinyurl.com/kbwqb42

More than half of Irish SMEs have yet to plan for Brexit – survey

With just 46 days left until the UK is due to leave the EU, a new survey in Ireland has found that more than half of small and medium-sized enterprises (SMEs) have yet to begin Brexit planning.

The AIB Brexit Sentiment Index also found that the Irish tourism industry is the one already feeling the greatest Brexit impact.

The results come as Minister for Business Heather Humphreys urged businesses to scrutinise their supply chains for risk of exposure when the UK leaves the EU.

According to the AIB research findings, the percentage of SMEs that have reported that Brexit is starting to affect their business has grown to nearly a third.

Covering the final quarter of last year, the study also discovered that one in three small and medium businesses here that had planned to invest in their enterprises have either postponed or cancelled those plans due to Brexit.

The bank says it is worrying that just 8% of businesses have started formal planning for Brexit.

“This is particularly concerning as Brexit, whether hard or soft, will inevitably result in the need for increased working capital to manage businesses cost pressures or possible price inflation should Brexit eventually result in the UK leaving the EU customs union,” said Catherine Moroney, Head of Business Banking at AIB.

The index is based on phone interviews conducted by IPSOS MRBI among 500 SMEs in the Republic of Ireland and 200 in Northern Ireland.

Given the concern that the Brexit threat is causing, it is perhaps no surprise then that over two thirds (68%) of SMEs in Ireland believe it will have a negative impact on their business in the future, up from 63% at the end of September last year.

A little over a quarter of businesses in the Republic now also fear there will be a hard border, the survey found.

Overall, those operating in the food and drink sector are most pessimistic about the Brexit outlook, followed by those in retail and the tourist sector.

However, tourism is the industry that is already feeling the greatest Brexit impact, with 25% of SMEs in the sector reporting lower sales and a fifth seeing higher cost-of-sales.

The impact of the uncertainty on investment is also being felt by businesses in the North, with 40% cancelling or postponing plans due to Brexit.

The state of unpreparedness among businesses in the North is greater than in the Republic, with 56% of SMEs north of the border yet to begin Brexit planning.

Just 10% of Northern Ireland small businesses think there will be a hard border.

Meanwhile, Minister for Business Heather Humphreys has urged businesses to examine supply chains for risk of exposure post-Brexit.

“Some businesses may not think that they will be exposed post-Brexit, but if they trade with the UK, including Northern Ireland, or their supply chain is partly dependent on the UK they will be”, she said.

“I am urging businesses of all scale to put their supply chains under the microscope to check for risks and vulnerabilities to the UK.

“If their business depends on sourcing a product, component or perhaps a service from the UK, their supply chain may be at risk.”

She added that a range of supports are on offer from Enterprise Ireland, InterTradeIreland and the 31 Local Enterprise Offices and information on what actions to take to mitigate supply chain risks.

Article Source: http://tinyurl.com/kbwqb42

Live register numbers hit almost 11 year low – the lowest level since April 2008

The number of people on the live register decreased 1.6pc in January to 200,300.

This is the lowest number recorded in the seasonally adjusted series since April 2008.

According to the latest figures from the Central Statistics Office (CSO), in unadjusted terms, there were 199,627 persons signing on last month.

This represents an annual drop of 15.9pc or a decrease of 37,759.

On a seasonally adjusted basis, 1,900 less men (a drop of 1.7pc) signed on in January 2019.

Meanwhile, the number of women on the live register fell by 1,400 (down 1.6pc) over the same period.

The Live Register is not designed to measure unemployment as it includes part-time workers, seasonal and casual workers.

Earlier this week, the CSO released a report showing that last month’s unemployment rate remained unchanged from December at 5.3pc.

The figure is down from 6pc in January 2017.

Overall, there were 127,300 people unemployed last month, down from 127,900 when compared to the December 2018 figure, and a decrease of 13,400 when compared to January 2018.

Article Source: http://tinyurl.com/kbwqb42

Ireland’s growth forecast cut as ‘economic outlook remains clouded by uncertainty’

The European Commission has revised downwards its GDP forecast for Ireland as our “economic outlook remains clouded by uncertainty”.

In its quarterly economic forecasts, the EU executive said that domestic economy is expected to expand at an average rate of 4pc this year and next.

The Commission cited “robust employment developments, stronger wage growth and weak inflation” as further supporting private consumption.

“However, the ongoing decline in consumer confidence, reflecting uncertainty about the economic outlook, suggests downside risks to consumer spending,” the forecast read.

Government supply measures are expected to encourage construction activity to expand at a brisk pace.

But estimated real GDP growth of 6.8pc fell well below autumn projections, reflecting weaker-than-expected growth in the third quarter.

“Influenced by the lower carry-over from 2018 and the less favourable outlook for global demand, Ireland’s GDP growth is forecast to moderate to 4.1pc in 2019 and 3.7pc in 2020,” the report said.

“The economic outlook remains clouded by uncertainty. This relates primarily to the terms of the UK’s withdrawal from the EU.

“As a highly open economy, Ireland is also particularly exposed to changes in the international taxation and trade environment. The huge impact of the often unpredictable activities of multinationals, could drive headline growth either up or down.”

Bigger picture

Ireland’s GDP growth forecast of 4.1pc in 2019 is joint second highest in the EU with Slovakia, and 3.7pc for 2020 while Malta is forecast to have the highest growth in 2019 at 5.2pc.

Estimates for the inflation in the 19-country currency bloc have also been revised downwards for 2019, with expectations that it will be lower than that forecast by the European Central Bank.

Back in November, Brussels said that the euro zone would grow 1.9pc in 2019 and 1.7pc next year.

However, now it is expected that growth will slow to 1.3pc this year up to 1.6pc in 2020.

All countries in European Union are expected to continue growing, but the larger member states will slow significantly.

Article Source: http://tinyurl.com/kbwqb42

Sought-after professionals in line to pick up pay rises of 20pc due to ‘Brexit boost’

Sought-after professionals will pick up pay rises of up to 20pc this year as employers predict a “Brexit boost”.

Workers in skilled financial services and IT roles are set to reap the benefits of new opportunities as companies locate their European bases in Ireland rather than the UK.

Recruitment firm Morgan McKinley found that 52pc of employers believe the Irish market will be seen as “more attractive” due to Brexit.

It predicted that pay rises will range from 5pc to 20pc for in-demand skills where there is competition for talent.

The agency’s latest salary report notes that for the first time in 10 years there is a higher percentage of Irish people returning for work than emigrating.

“While this is positive news for the Irish employment market generally, professionals returning home from London, New York, Singapore, Hong Kong or Sydney are also coming back with higher salary expectations,” it said.

The agency’s global FDI director, Trayc Keevans, said there were 55 Brexit-related investments here last year and Barclays, Goldman Sachs and JP Morgan are among those setting up offices.

She said as well as pay rises, many employers are offering “relocation support”, including finding accommodation. There is stiff competition for cyber security professionals, financial accountants, banking and insurance staff.

The salary survey also shows that 60pc of professionals believe they are underpaid and deserve higher salaries, and most work more than their contracted hours.

In addition, 57pc of employers think there is a skills shortage in Ireland – adding to the likelihood of spiralling pay where talent is in short supply.

The demand for cyber security professionals has been driven by the rising number of cyber attacks globally that has increased the threat hackers pose to businesses.

According to the recruitment company, the demand for artificial intelligence and ‘machine learning’ professionals will “take centre stage” this year as more employers will advertise for specialised roles in this area.

“The year ahead looks both promising and uncertain,” said the survey. “As Ireland continues to move towards full employment, the war for talent will continue. Counter offers and retention bonuses are increasingly prevalent as employers seek to retain their most valuable employees. Candidates are also seeking a better work-life balance and choosing to accept roles based on the level of flexibility a company is willing to provide.”

Meanwhile, large numbers of people who have worked in Britain are entitled to a tax refund, but many are unaware of it. Tax specialists Taxback.com said the rebates could be worth more than €1,000.

An estimated one in three Irish people who have worked in the UK are entitled to a tax rebate. But many are not aware of their eligibility.

A crash-out Brexit could see thousands of Irish people returning home from the UK, which will mean they will be entitled to claim tax refunds.

Taxback.com commercial director Eileen Devereux said the UK has remained a popular destination for Irish workers in recent years.

Recent Central Statistics Office figures show a total of 12,100 Irish people migrating to the UK in the last year.

Article Source: http://tinyurl.com/kbwqb42

Financial system can withstand a hard Brexit – Central Bank

The Central Bank has been able to provide assurances that the financial system as a whole was resilient enough to withstand a hard Brexit and that the most material ‘cliff-edge’ financial stability risks arising from Brexit “have been largely mitigated”.

Finance Minister Paschal Donohoe said he has met with top officials from the National Treasury Management Agency (NTMA), which manages the country’s debt, the Central Bank and the Revenue Commissioners to assess readiness.

“All are engaging closely in the overall whole-of-Government preparations, and are confident they have put appropriate contingency measures in place to do everything possible to limit the inevitable disruption to consumers and trade, in the event of a no-deal Brexit,” Mr Donohoe said. The minister again stressed the “backstop” is not for negotiation and there is “no such thing” as a managed “no deal”.

Even in a cliff-edge Brexit, the Irish economy is likely to keep growing, albeit at a much slower pace.

“The initial assessment by my department suggests the level of economic activity will be around 4.15 percentage points lower than our existing trajectory over the medium-term and will be around six percentage points lower compared to a no-Brexit scenario,” the minister said.

A slowdown of such magnitude would cause the headline deficit to widen by as much as a percentage point of gross domestic product.

Article Source: http://tinyurl.com/kbwqb42

One third of Irish who have worked in UK entitled to tax rebate – but may not know it

Large numbers of people who have worked in Britain are entitled to a tax refund, but many are unaware of it.

Tax specialists Taxback.com said the rebates could be worth more than €1,000.

An estimated one in three Irish people who have worked in the UK are entitled to a tax rebate.

But many are not aware of their eligibility or the length of time they have to claim.

A crash-out Brexit could see thousands of Irish people returning home from the UK, which will mean they will be entitled to claim tax refunds.

Taxback.com commercial director Eileen Devereux said the UK has remained a popular destination for Irish workers in recent years.

She said the most recent Central Statistics Office statistics show a total of 12,100 Irish people migrating to the UK in the last year.

This figure was closer to 20,000 in 2011 when the numbers were at their peak.

“While people are still leaving our shores to work in our nearest neighbours, it is not unlikely that Brexit could see an influx of Irish workers return home,” Ms Devereux said.

She said many of these people end up coming home for one reason or another.

“Our experience is that many don’t know they have left valuable tax refunds behind them, effectively giving the UK tax authorities their hard-earned cash.”

The Taxback.com expert said that people who have worked in the UK and paid tax in the last four years could be due a tax rebate.

“Figures from the UK’s Office for National Statistics estimate that there were 149,000 people who were born in Ireland, aged 16 to 64 living and employed in the UK between 2013 and 2015.

“Any of those people who may have already returned home, or may be thinking of it, would do well to check their eligibility for a rebate, which could be as much as a huge £963 [€1,095], which is our average UK tax rebate.”

Taxback.com has created what it calls a “no-nonsense” guide to income tax in the UK, which is aimed at helping Irish people who have worked or are currently working in the UK, to sort out their tax affairs and avail of any refunds that may be due.

Article Source: http://tinyurl.com/kbwqb42