News Archives - Page 4 of 308 - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

NTMA due to hold two bond auctions in third quarter

The National Treasury Manangement Agency said today it plans to hold two bond auctions in the third quarter of this year.

The NTMA said it will hold bond auctions on July 9 and September 10.

The agency is also planning three Treasury Bill sales and these are pencilled in for July 16, August 20 and September 17.

The NTMA continues to move towards its annual funding target of up to €24 billion to shore up government finances to deal with the coronavirus pandemic.

It has raised €18.5 billion from bond issuance so far this year.

In April, the NTMA announced a revised bond funding range of €20 billion to €24 billion for the full year, to meet the extra borrowing requirements of Government measures during the Covid-19 pandemic.

That replaced the original bond funding range, announced in December, of €10 billion to €14 billion.

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NTMA due to hold two bond auctions in third quarter

The National Treasury Manangement Agency said today it plans to hold two bond auctions in the third quarter of this year.

The NTMA said it will hold bond auctions on July 9 and September 10.

The agency is also planning three Treasury Bill sales and these are pencilled in for July 16, August 20 and September 17.

The NTMA continues to move towards its annual funding target of up to €24 billion to shore up government finances to deal with the coronavirus pandemic.

It has raised €18.5 billion from bond issuance so far this year.

In April, the NTMA announced a revised bond funding range of €20 billion to €24 billion for the full year, to meet the extra borrowing requirements of Government measures during the Covid-19 pandemic.

That replaced the original bond funding range, announced in December, of €10 billion to €14 billion.

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Manufacturing bounces back to pre-pandemic growth rate – PMI

The manufacturing sector returned to growth in June after recovering almost all of the sudden deterioration seen following the coronavirus-related shutdown of most of the economy in March, a survey showed today. 

The economy here has opened more gradually than much of Europe with large parts of the services sector including hotels, restaurants, hairdressers and most pubs only resuming trading this week.

A number of factories here reopened in June, the AIB IHS Markit manufacturing Purchasing Managers’ Index (PMI) survey found.

That helped push the index up to 51 from 39.2 in May, back above the 50 mark denoting growth. 

The record one-month gain was driven by a near doubling in the largest sub indices of new orders and output, with exports also rising at the fastest level since April 2019. 

The main index hit a low of 36 in April and stood at 51.2 in February before Ireland reported its first coronavirus case on February 29. 

Flash sister surveys in June for the UK and the euro zone as a whole showed similar rebounds to 50.1 and 46.9 respectively. 

However higher production was not matched by a rise in employment in June, with one in five firms cutting staff, albeit down from 29% in May and 41% in April, the survey showed. 

CSO figures yesterday showed that 22.5% of the workforce here were either temporarily or permanently unemployed at the end of June, down from a record 28.2% in April.

AIB’s chief economist Oliver Mangan said the return to growth was a clear indication of improving economic conditions but that many of the indices remained weak relative to their long-run averages. 

“Manufacturing conditions have not returned to normal. The collapse in orders in the March-May period means that backlogs continued to fall sharply, while inventories of finished goods shrunk further, with stocks of inputs also still in marked decline,” he said.

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Euro zone bank lending continues to surge amid crisis – ECB

Lending to euro zone companies continued to surge in May as firms relied heavily on bank credit to stay afloat amid the continent’s coronavirus-related lockdown, data from the European Central Bank showed today. 

With millions of people in stuck at home and much of the bloc’s economy mothballed, activity came to a standstill in March and only started to remerge in May, forcing firms to find emergency cash to survive. 

Lending growth to non-financial corporations accelerated to 7.3% in May from 6.6% a month earlier, its best rate since early 2009. 

Household lending growth meanwhile held steady at 3%. 

Although banks initially appeared to tighten access to credit, a raft of government and central bank measures, from public guarantees to easier collateral rules, has supported lending. 

Indeed, the ECB loaned €1.3 trillion to banks last week for at a rate as low as -1% provided banks at least maintain their stock of lending to the real economy. 

The annual growth rate of the M3 measure of money supply accelerated to 8.9% from 8.2%, beating expectations for 8.6% in a Reuters poll.

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Fall in mortgage approvals but market shows resilience

The number of new mortgage approvals in May was nearly 62% lower than the same month last year.

According to the Banking and Payments Federation Ireland, the decrease was not unexpected given the scale of the lockdown and physical restrictions due to Covid-19.

In total 1,879 new mortgages were approved by lenders here in May – a decrease of 14.6% compared to a month earlier.

But compared to May of last year the volume was nearly 62% lower.

At €442 million the overall value of the mortgages approved dropped nearly 16% between April and May, and 61% compared to May of 2019.

On the face of it, the figures may look alarming and point to either a major pull back by mortgage issuers or a dramatic drop in demand.

But the Banking and Payments Federation Ireland said it was expected given the scale of the lockdown and physical restrictions, and their impact on employment figures and economic uncertainty. 

The organisation said it was also significant that despite the majority of the country being shut down and the economy experiencing an unprecedented shock, 1,900 mortgages worth €442m were approved.

It said it shows that demand within the housing market may be more resilient than expected and also demonstrates that banks are meeting that demand.

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Workers on Covid-19 benefit payments face tax bills

A large number of full-time workers in receipt of the Temporary Wage Subsidy Scheme or Pandemic Unemployment Payment face tax bills of between €150 and €2,828 by the end of the year, Taxback.com has warned.

The latest Taxback.com Taxpayer Sentiment Survey revealed that 57% of respondents receiving either payment are not aware that a future tax liability is building.

Of the 43% who said they were aware of the tax implications, feedback suggests that there is big possibility that they will not know what they will, or can, do about it.

Since its introduction in March, over 551,800 employees have been paid by the TWSS, while 517,600 have received the PUP. 

Taxback.com said the implementation of these supports was absolutely necessary and helped thousands of employers and employees alike.

But it added that the processing of payments fell short in its execution which will leave those in receipt of the payments out of pocket by the end of the year.

Marian Ryan, Consumer Tax Manager with Taxback.com, said that when assessing the impact, we were mindful of the immediacy with which the Government had to roll out the scheme, so anomalies were to be expected. 

“The issue, however, is that thousands of employees appear to be completely unaware of what is coming down the tracks,” she said. 

“The scheme was rolled out in good faith to see employers through the instability of Covid-19 – and to ensure they emerge from the downturn – but a biproduct of its expediency could see less money in the pockets of employees in 2021 and possibly 2022 depending on how the tax burden is spread,” she added.

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Workers on Covid-19 benefit payments face tax bills

A large number of full-time workers in receipt of the Temporary Wage Subsidy Scheme or Pandemic Unemployment Payment face tax bills of between €150 and €2,828 by the end of the year, Taxback.com has warned.

The latest Taxback.com Taxpayer Sentiment Survey revealed that 57% of respondents receiving either payment are not aware that a future tax liability is building.

Of the 43% who said they were aware of the tax implications, feedback suggests that there is big possibility that they will not know what they will, or can, do about it.

Since its introduction in March, over 551,800 employees have been paid by the TWSS, while 517,600 have received the PUP. 

Taxback.com said the implementation of these supports was absolutely necessary and helped thousands of employers and employees alike.

But it added that the processing of payments fell short in its execution which will leave those in receipt of the payments out of pocket by the end of the year.

Marian Ryan, Consumer Tax Manager with Taxback.com, said that when assessing the impact, we were mindful of the immediacy with which the Government had to roll out the scheme, so anomalies were to be expected. 

“The issue, however, is that thousands of employees appear to be completely unaware of what is coming down the tracks,” she said. 

“The scheme was rolled out in good faith to see employers through the instability of Covid-19 – and to ensure they emerge from the downturn – but a biproduct of its expediency could see less money in the pockets of employees in 2021 and possibly 2022 depending on how the tax burden is spread,” she added.

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Economic growth averaged 5.2% every year between 2013 and 2018 – CSO

Growth in the Irish economy averaged 5.2% per annum from 2013 to 2018, according to an analysis of new CSO data.

In a Special Article for the ESRI, Professor John Fitzgerald describes a measure, called Net National Product, as the best picture of the “economic welfare of those living in Ireland”.

For years, the traditional measure of economic growth, Gross Domestic Product (GDP) has given a distorted picture of what is going on in the Irish economy.

In 2015, Nobel Prize winning economist Paul Krugman referred to the reported 25% jump in Ireland’s GDP that year as “leprechaun economics”.

The average 5.2% rate compares to an average rate of 10.5% when measured by GDP.

The CSO has made attempts to account for the impact of the tax treatment of intellectual property by multinationals as well as other activities such as aircraft leasing.

Professor Fitzgerald’s analysis on Net National Product also shows the foreign-owned sector accounted for a fifth of that growth and just over a quarter of the national wage bill.

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Economic growth averaged 5.2% every year between 2013 and 2018 – CSO

Growth in the Irish economy averaged 5.2% per annum from 2013 to 2018, according to an analysis of new CSO data.

In a Special Article for the ESRI, Professor John Fitzgerald describes a measure, called Net National Product, as the best picture of the “economic welfare of those living in Ireland”.

For years, the traditional measure of economic growth, Gross Domestic Product (GDP) has given a distorted picture of what is going on in the Irish economy.

In 2015, Nobel Prize winning economist Paul Krugman referred to the reported 25% jump in Ireland’s GDP that year as “leprechaun economics”.

The average 5.2% rate compares to an average rate of 10.5% when measured by GDP.

The CSO has made attempts to account for the impact of the tax treatment of intellectual property by multinationals as well as other activities such as aircraft leasing.

Professor Fitzgerald’s analysis on Net National Product also shows the foreign-owned sector accounted for a fifth of that growth and just over a quarter of the national wage bill.

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Hotel occupancy rates set to fall from 2019 high of 73% to 32%

A survey of hoteliers has found that average national occupancy levels are set to dramatically fall from the highs of over 70% last year to just over 30% this year.

Dublin occupancy levels are forecast to be down by half with regional levels down almost 40%.  

As a result, Dublin hotels expect to be harder hit overall than regional hotels with total revenues for Dublin hotels forecast to be down 62%. 

In comparison, regional hotels are predicting a fall of 55% on 2019 record levels.

This survey was carried out by Crowe, an accountancy practice and advisors to the Irish hotel sector.

87% of hotels have been closed for the past three months but are preparing to reopen on June 29. 

Hoteliers are preparing to operate in a marketplace where lower occupancy levels will be the norm for some time due to the collapse of the international tourist sector, including corporate travel. 

Crowe said it is inevitable that competitive pressure will put downward pressure on average room rates. Hoteliers are predicting the average room rate of €111 in 2019 is set to fall to €94 for 2020. 

It predicts that Dublin room rates will fall by 28% this year while room rates outside of Dublin are expected to be down 13% on 2019 levels. 

Nationally 42% of hoteliers expect the impact of Covid-19 to last more than 18 months, affecting trade into 2022. 

But the survey revealed that hoteliers have learned lessons from the economic crash of 2008 and now understand that discounting has a limited impact on overall demand stimulus. 

As a result, Crowe is predicting that hoteliers plan to protect room rates by avoiding over-discounting room rates in 2020, allowing the industry to create a better base for 2021.

Aiden Murphy, a partner at Crowe, said the survey also reveals that 90% of hotels have needed to approach their bank for changes to their loan repayment terms or additional working capital. 

“Due to the collapse of international demand and an increase in operating costs, there is little expectation for hotels to generate a profit this summer. As a result, there is a situation whereby 50% of hotels in Ireland could run out of money in the months ahead,” Mr Murphy added.

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