News Archives - Page 5 of 317 - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

More small firm owners expect to get pay rise as mood improves

ONE in ten small business owners now plans to give themselves a pay raise this year, while nearly a third will cut their wages amid Covid-19 losses, according to the Irish SME Association.

Isme’s survey of 237 members identifies growing confidence among a minority of small firm owners that their enterprises will survive the pandemic, a shift in attitude reflected in their own planned pay packets.

Just three months ago, in the first weeks of lockdown, Isme’s quarterly survey found that only 4pc of owners in small and medium-sized companies planned to hike their own wages this year. That has now risen to 10pc, including 2pc who plan at least a 5pc raise for themselves.

While 30pc of owners still plan to cut their own pay this year, according to the survey, that number has fallen from 47pc who had expected to do so three months ago.

Nearly three in five owners surveyed now plan to maintain their own pay on 2019 levels, up from 49pc.

Nearly 23pc of firms also plan to raise pay for employees this year, half of them by at least 2.5pc.

But two-thirds have ruled out any pay hikes, while 11pc still intend to cut wages, mostly by more than 5pc.

Isme also found that most members had yet to tap extra financial resources beyond the State’s payroll supports. More than one in 10 had funded their own firms with directors’ loans.

While nearly seven in 10 were supported by the Wage Subsidy Scheme, and nearly a quarter had availed of Revenue forbearance on taxes due, most had not sought support from their own bank.

Isme CEO Neil McDonnell described this as “surprising”.

Small firms getting payment breaks on business mortgages and business loans totalled 10pc and 16.5pc respectively.

Less than 8pc had tapped the Strategic Banking Corporation of Ireland’s Working Capital Scheme – and barely 1pc the State-backed Credit Guarantee Scheme, billed by the Government as a core pandemic support for firms.

Nearly three in five owners of small and medium companies said they had not contacted their bank for additional finance or payment breaks, while a quarter said that they were receiving “flexibility and forbearance” from their bank.

One in 20 said their bank was “being unhelpful or refusing my request for help”.

The survey chiefly involved firms that employ fewer than 50 people. Most are located outside Dublin. They overwhelmingly bank with either AIB or Bank of Ireland.

When asked how long their firm could survive amid current trading conditions, 52pc said more than nine months.

Nearly 17pc said they could last six to nine months, 20pc three to six months, and 9pc one to three months. The remaining seven firms in the survey said they either had ceased trading or would within the month.

More than one in four firms said their outstanding debts, including unpaid Revenue bills, topped €100,000. Another quarter said they had debts below €10,000.

“We are delighted to see business sentiment rise in the current environment. But there is a long road ahead for many SMEs,” Mr McDonnell warned.

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Coronavirus punches €8.3bn hole in public finances

The coronavirus crisis has punched an €8.3 billion hole in the public finances, according to the latest exchequer returns.

The figures show the Government’s budget deficit – the difference between what it spends and what it takes in in taxes – swelled to €7.4 billion in July as VAT receipts crashed and spending on income supports related to the pandemic soared.

This compared with a surplus of €900 million this time last year, marking a year-on-year deterioration of €8.3 billion.

The headline deficit was driven by a large increase in Government spending, which was 30 per cent up on last year at €38 billion, reflecting increased spending in the Departments of Health and Social Protection.

Social protection spending was 83 per cent or €5.3 billion above profile as a result of increased spending related to the Government’s two wage support schemes for workers affected by the lockdown.

With consumer activity severely restricted in April and May, VAT receipts also took a battering. They were down 22.7 per cent, or €2.2 billion, on the same period last year, reflecting what the Department of Finance described as a “significant decline in personal consumption”. Revenue from the sales tax was down 30 per cent or €692 million in July alone.

Overall, the figures show the Government took in €31.1 billion in taxes for the seven-month period, down 2.5 per cent on last year.

Income tax, the Government’s largest tax channel, generated €12.1 billion, which was only marginally down on last year and above profile.

Corporation tax receipts were €6 billion for the period, which was €1.7 billion, or 40 per cent, above profile.

However, business tax receipts for July were just €165 million, down 62 per cent or €271 million on the same month last year.

While July is not a major corporation tax month, this under-performance, in contrast to the over-performance trend seen in the year to date, serves to underline the volatility of this tax head, the department said.

Positive signals
Minister for Finance Paschal Donohoe said while the figures were stark the total tax performance was “very much in line with what we were expecting”.

He said that despite all that had happened, including the upheaval to business and to families, there were still some positive signals, including the fact that the tax-take was down only 2.5 per cent compared to a year ago.

“While the figure is big, the percentage change is a better-than-hoped-for performance,” he said at a media conference to coincide with the publication of the figures.

He said there continued to be a strong performance in corporation tax, but a more significant indicator was that income tax at the end of July was nearly unchanged compared to a year ago.

“In July [income tax] was down 8 per cent compared to July 2019. In the context of the unprecedented loss of jobs for many months, that income tax [figure] is a positive note in our total tax collection.”

He said two factors underlined that. The first was that strong sectors of the economy such as technology, pharma and exports continued to perform well.

The second was the sectors that have suffered most were those that employed most part-time workers – and that meant a smaller fall-off in tax revenue.

Consumption
However, he said the figures showed the effects of changing consumption. He said excise was down 18 per cent, for example.

He said the July stimulus offered a huge array of different measures worth over €5 billion of tax changes. It was a priority of all government departments to make sure they were implemented.

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Services sector grows in July for first time since lockdown

Activity in the services sector grew in July for the first time since the economy entered lockdown restrictions earlier this year, according to data from AIB.

The July purchasing managers index (PMI) witnessed a modest expansion but the volumes of income new sales fell further, while employment continued to decline.

The business activity index rose to 51.9 in July from 39.7 the previous month. Any reading above 50 indicates a sector in expansion.

“While this is a very welcome development it is still a relatively low reading for the Irish services PMI – the index stood at 59.9 as recently as February, indicating that the sector is still far from being back to normal,” said AIB chief economist Oliver Mangan.

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Opportunities offered for researchers and enterprises under Horizon 2020

Research and innovation is the bedrock of success for the most ambitious companies that scale internationally, diversify their export base and create jobs at home.

A higher education sector and research ecosystem that is outward looking and internationally engaged, and collaborating with Irish companies, is of critical importance to Ireland’s place in the world and to our global competitiveness.

As citizens we rely on our innovators and researchers as engines of economic growth and to help us overcome some our greatest societal challenges.

With the emergence of Covid-19 and the challenges posed by climate change, the truth of this has never been clearer. A key pillar of Enterprise Ireland’s client engagement strategy is therefore to support companies and researchers to individually and collaboratively achieve their global ambition.

The European Union’s Horizon 2020 programme is designed to support innovators and researchers, by funding research excellence, industrial leadership and tackling societal challenges.

To date, Irish companies and researchers have been awarded and contracted in excess of €987m in funding under Horizon 2020 – with more in the pipeline.

Horizon 2020 will be succeeded by Horizon Europe. However, many opportunities remain over the next six months.

Following a call in May for applications focusing on the EU Green Deal, the European Commission’s European Innovation Council (EIC) Accelerator recently announced that 64 European startups and SMEs are to be awarded some €307m.

The EIC Accelerator pilot supports high-risk, high-potential SMEs and innovators to help them develop and bring onto the market new innovative products, services and business models that could drive economic growth.

Applicants are able to apply for up to €2.5m in grant support, and for up to €15m in equity investment.

Two Galway-based companies were among the successful applicants.

NVP Energy Limited is to receive funding for its Ambi-Robic technology for treating municipal sewage wastewater, and GlasPort Bio Limited is to receive funding for its GasAbate N+ technology for removing greenhouse gas emissions from animal manure. Stored manures account for 16pc of all greenhouse gas emissions from EU agriculture.

The success of these companies followed the announcement in June by the EIC that eight Irish companies secured more than 10pc of the funding allocated under this call and have been awarded grant and equity funding totalling more than €31m.

The budget for this call was increased by the EIC to ensure that many Covid-19 relevant innovations were supported in addition to other thematic areas.

Among the successful applicants were seven Enterprise Ireland clients. They included Kite Medical, OneProjects Design Innovation, Provizio, Remedy Biologics, Kastus Technologies, SiriusXT and Aquila Biosciences.

These results are a testament to the vibrancy of the Irish commercialisation and startup eco-system and should be celebrated. The final EIC Accelerator call for applications closes on October 7 – and it has no thematic focus.

Importantly, it has a focus on female entrepreneurship where, should the first-round evaluation show that a minimum of 25pc of companies selected for the final-stage interviews are not led by women, additional interviews will then be planned.

The EIC accelerator is a real opportunity for entrepreneurs to raise funding, innovate and scale their businesses. The only real challenge that these companies can have is if they are not being sufficiently ambitious.

In the autumn, a Horizon 2020 call for applications totalling close to €1bn will be launched to respond to the urgency of climate change and to the ambition of the European Green Deal objectives.

This will be a cross-cutting work programme covering a vast array of European Green Deal-related topics. And there will be opportunities for innovators and researchers across Europe to collaborate and compete for funding.

Under the umbrella of the European Enterprise Network (EEN), Enterprise Ireland and our colleagues in Invest NI will be running a virtual brokerage event on the European Green Deal call on October 13.

This event will be an opportunity to get further information and to meet potential consortia partners from across the island of Ireland and the wider Horizon 2020 family.

See here to register: h2020-green-deal-call-dublin.b2match.io/.

For more information about the extensive supports available to innovators and researchers under Horizon 2020 and the Horizon 2020 National Contact Point Network please refer to horizon.ie.

Garrett Murray is the national director for Horizon 2020 at Enterprise Ireland

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RDI Hub in Kerry marketing itself as ‘remote’ location

A NON-PROFIT hub for start-ups in Killorglin is reporting interest from firms seeking a ‘remote’ base for workers living in Kerry, Cork and Limerick.

The RDI Hub – a joint venture of Fexco, IT Tralee, Kerry County Council and Enterprise Ireland – opened earlier this year in the Co Kerry town and already hosts operations for tax compliance firm Taxamo and Swiss equipment manufacturer Liebherr.

The 12,000-square-foot facility beside Fexco’s headquarters reopened yesterday following a four-month closure because of Covid-19 restrictions.

Liam Cronin, chief executive of the RDI Hub, said it has been approached by several potential tenants seeking a second workplace.

Some are seeking extra space because their existing offices would be too tightly packed to maintain social distance; others are considering a base in the south-west for regional workers who otherwise would keep working from home.

“We anticipate that having a second-site presence will become the norm over the coming years, and the benefits for companies are extensive,” Mr Cronin said. “Sharing of knowledge, fostering innovation and growth mindset, while offering employees the flexibility they now desire, will positively impact business performance.”

A NON-PROFIT hub for start-ups in Killorglin is reporting interest from firms seeking a ‘remote’ base for workers living in Kerry, Cork and Limerick.

The RDI Hub – a joint venture of Fexco, IT Tralee, Kerry County Council and Enterprise Ireland – opened earlier this year in the Co Kerry town and already hosts operations for tax compliance firm Taxamo and Swiss equipment manufacturer Liebherr.

The 12,000-square-foot facility beside Fexco’s headquarters reopened yesterday following a four-month closure because of Covid-19 restrictions.

Liam Cronin, chief executive of the RDI Hub, said it has been approached by several potential tenants seeking a second workplace.

Some are seeking extra space because their existing offices would be too tightly packed to maintain social distance; others are considering a base in the south-west for regional workers who otherwise would keep working from home.

“We anticipate that having a second-site presence will become the norm over the coming years, and the benefits for companies are extensive,” Mr Cronin said. “Sharing of knowledge, fostering innovation and growth mindset, while offering employees the flexibility they now desire, will positively impact business performance.”

He cited anecdotal evidence “that while working from home is having a positive impact on productivity, both creativity and innovation have taken a hit. You really need people together to brainstorm.”

Mr Cronin said tenants were being encouraged to participate in the RDI Hub’s on-site wellness programme as part of wider community-building efforts. The goal, he said, was for staff within and between firms “to come together and collaborate and have those serendipitous moments where new ideas come up”.

The RDI Hub also is running mentor and accelerator programmes with input from Accenture’s head of strategy, Karen O’Regan; the chief executive of Scale Ireland, Liz McCarthy; the CEO of Phelan Energy, Louise Phelan; and Fexco’s director of strategic business development, Karl Aherne.

Taxamo chief executive John McCarthy praised the RDI Hub as providing “amazing physical space, cutting-edge technology and access to a network of expertise to help and support the expansion of our business”.

He said such facilities help “to retain and attract talent outside of the main urban centres.”

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Regulator says insurers should pay legal bills for customers’ business interruption cases

Insurance companies should pay the legal costs of customers who challenge refusal to pay out on business interruption claims, the Central Bank say.

In updated guidance, the regulator said that where cover and related issues are disputed, the Central Bank expects firms to pay the reasonable costs of customer plaintiffs in agreed test case litigation. The most high profile of such cases at the moment involves claims taken by four publicans against FBD, that are representatives of hundreds of similar claims. FBD last week increased its estimate for the likely costs in relation to the actions from €22m to €30m.

Where customers have an entitlement to claim under a business interruption insurance policy, the Central Bank expects that claims will be processed and paid promptly and fully.

The Central Bank said that some business interruption insurance policies provide cover for the circumstances of interruption related to the outbreak of COVID-19, while others clearly do not. And in some cases the position is unclear but a strong or reasonable argument can be made that they do provide cover.

Director General of Financial Conduct, Derville Rowland, said: “The Framework reiterates our core message to firms: that they honour valid claims in full and pay them promptly.”

“Furthermore, where cover is disputed and businesses have pursued litigation, insurance firms should be cognisant of the significant costs burden faced by their customers. We therefore expect that in circumstances where the firm obtains the benefit of a court’s interpretation of issues at hand, a firm should agree to pay the reasonable costs of customer plaintiffs in agreed test case litigation and should not seek its costs against these plaintiffs.”

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Family car costs fall due to drop in prices at the pumps

The cost of running a family car has fallen, largely due to lower fuel prices at the forecourts.

The average cost of running a family car fell to €10,386, according to the AA’s annual survey of motoring costs. This is down €207.26 on last year.

The biggest year-on-year change is due to an almost 10pc drop in the average cost of fuel. Average insurance costs have also fallen.

It comes as Liberty Insurance is investing €100m in a technology upgrade that will allow motorists to customise their insurance cover.

A collapse in global demand for oil due to the Covid-19 outbreak has seen pump prices fall in recent months, even though they have begun to creep up again lately with travel volumes increasing.

The average cost of a litre of petrol fell from 139.5c last year to 125.9c this month. Diesel prices fell from 129.9c to 117.3c.

The AA said there has been a drop in insurance prices, but it warned of high costs for non-standard risks and said promised insurance reform has still not been delivered.

AA director of consumer affairs Conor Faughnan said figures from the Central Statistics Office show the average cost of motor insurance dropped by 7.6pc in June compared with the same month last year.

But he said there are plenty of motorists whose insurance costs have not reduced.

This was particularly the case for returning emigrants and those with claims, or other non-standard risks.

The AA called on the Government and the insurance industry to ramp up insurance reform efforts.

Meanwhile, Liberty Insurance said it had designed a “unique” cloud-based technology that will effectively eliminate the need for it to rely on its complex legacy systems.

The IT upgrade offers customers a range of cover options as part of a basic package and then allows them to customise a product that most suits their needs, with a ­number of optional add-ons.

This will mean motorists deciding if they want to add or subtract the likes of windscreen breakage cover or breakdown assistance to ­policies.

Further product enhancements are planned for the new year, the company said.

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Opportunities offered for researchers and enterprises under Horizon 2020

Research and innovation is the bedrock of success for the most ambitious companies that scale internationally, diversify their export base and create jobs at home.

A higher education sector and research ecosystem that is outward looking and internationally engaged, and collaborating with Irish companies, is of critical importance to Ireland’s place in the world and to our global competitiveness.

As citizens we rely on our innovators and researchers as engines of economic growth and to help us overcome some our greatest societal challenges.

With the emergence of Covid-19 and the challenges posed by climate change, the truth of this has never been clearer. A key pillar of Enterprise Ireland’s client engagement strategy is therefore to support companies and researchers to individually and collaboratively achieve their global ambition.

The European Union’s Horizon 2020 programme is designed to support innovators and researchers, by funding research excellence, industrial leadership and tackling societal challenges.

To date, Irish companies and researchers have been awarded and contracted in excess of €987m in funding under Horizon 2020 – with more in the pipeline.

Horizon 2020 will be succeeded by Horizon Europe. However, many opportunities remain over the next six months.

Following a call in May for applications focusing on the EU Green Deal, the European Commission’s European Innovation Council (EIC) Accelerator recently announced that 64 European startups and SMEs are to be awarded some €307m.

The EIC Accelerator pilot supports high-risk, high-potential SMEs and innovators to help them develop and bring onto the market new innovative products, services and business models that could drive economic growth.

Applicants are able to apply for up to €2.5m in grant support, and for up to €15m in equity investment.

Two Galway-based companies were among the successful applicants.

NVP Energy Limited is to receive funding for its Ambi-Robic technology for treating municipal sewage wastewater, and GlasPort Bio Limited is to receive funding for its GasAbate N+ technology for removing greenhouse gas emissions from animal manure. Stored manures account for 16pc of all greenhouse gas emissions from EU agriculture.

The success of these companies followed the announcement in June by the EIC that eight Irish companies secured more than 10pc of the funding allocated under this call and have been awarded grant and equity funding totalling more than €31m.

The budget for this call was increased by the EIC to ensure that many Covid-19 relevant innovations were supported in addition to other thematic areas.

Among the successful applicants were seven Enterprise Ireland clients. They included Kite Medical, OneProjects Design Innovation, Provizio, Remedy Biologics, Kastus Technologies, SiriusXT and Aquila Biosciences.

These results are a testament to the vibrancy of the Irish commercialisation and startup eco-system and should be celebrated. The final EIC Accelerator call for applications closes on October 7 – and it has no thematic focus.

Importantly, it has a focus on female entrepreneurship where, should the first-round evaluation show that a minimum of 25pc of companies selected for the final-stage interviews are not led by women, additional interviews will then be planned.

The EIC accelerator is a real opportunity for entrepreneurs to raise funding, innovate and scale their businesses. The only real challenge that these companies can have is if they are not being sufficiently ambitious.

In the autumn, a Horizon 2020 call for applications totalling close to €1bn will be launched to respond to the urgency of climate change and to the ambition of the European Green Deal objectives.

This will be a cross-cutting work programme covering a vast array of European Green Deal-related topics. And there will be opportunities for innovators and researchers across Europe to collaborate and compete for funding.

Under the umbrella of the European Enterprise Network (EEN), Enterprise Ireland and our colleagues in Invest NI will be running a virtual brokerage event on the European Green Deal call on October 13.

This event will be an opportunity to get further information and to meet potential consortia partners from across the island of Ireland and the wider Horizon 2020 family.

See here to register: h2020-green-deal-call-dublin.b2match.io/.

For more information about the extensive supports available to innovators and researchers under Horizon 2020 and the Horizon 2020 National Contact Point Network please refer to horizon.ie.

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An Post’s ‘one-stop shop’ for greener homes

An Post is to launch a “one-stop shop” for householders who are upgrading their homes to make them more energy efficient.

The scheme involves a package that includes cheap loans, having the work carried out for homeowners, and applying for the grant for the consumer.

The all-in-one approach will mean that those taking a loan from An Post will have the retro-fitting work carried out for them, project management looked after, and the grant- application process handled.

The Green Finance offer is being launched at a time when there is a national push to retro-fit up to 500,000 houses.

The scheme will enable householders to make environmentally responsible decisions when investing in their homes or when replacing ­petrol or diesel vehicles.

It comes under the State company’s An Post Money brand, which already offers current accounts, personal loans and credit cards, with plans to offer mortgages and loans for small firms in the future. An Post has set up what it calls a Green Hub on its website, but consumers can also access it in 950 post offices.

The ‘green loans’ are issued by AvantCard for An Post with a rate of 4.9pc on amounts over €20,000.

Managing director of An Post Retail Debbie Byrne said this was a market-leading rate.

The loans are expected to be typically used for installing heat pumps, solar panels and wall insulation. The repayments on the loan can be stretched over 10 years.

Ms Byrne said: “This one-stop-shop approach will cover loan-only or full retro-fit services, from initial home assessments to completed works and a seamless Sustainable Energy Authority of Ireland (SEAI) grant application and payment process.”

The offer also includes the provision of a survey.

An Post has partnered with the SEAI and energy company SSE Airtricity to carry out the works, and provide access to grants.

The SEAI administers grants, with up to €6,000 available for external-wall insulation on a detached house.

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Consumer-facing workers face most risk of long-term unemployment – study

Workers in consumer-facing industries such personal services, accommodation, and food and beverage are most at risk of slipping into long-term unemployment once State supports are removed, a study by the Economic and Social Research Institute (ESRI) has warned.

The research paper, entitled Managing Mass Unemployment Flows During the Covid-19 Pandemic, aims to categorise claimants of the Pandemic Unemployment Payment (PUP) on the basis of their expected risk of future long-term unemployment.

It warns that Ireland’s Public Employment Services (PES), which operates the State’s various employment supports and job activation schemes, are likely to face “substantial constraints arising from the rapid increase in jobseeker claimants”.

When the PUP scheme closes at the end of March next year, it is expected that PES will have to transfer a large number of individuals from the emergency PUP to the Live Register, the report said.

“These circumstances create a huge administrative burden that will stretch Ireland’s PES,” it said.

Using a combination of administrative and Labour Force Survey (LFS) data, the research identifies PUP claimants that have the greatest risk of falling into long-term unemployment, officially those without a job for over 12 months.

The sectors with high job loss rates were other personal service activities, such as hairdressers and beauticians; accommodation; real estate activities; food and beverage service activities; and specialised construction activities, such as demolition and site preparation.

It also classified two travel industry sectors as high-risk given the industry is likely to one of the last to resume operations and will likely experience more medium-term impacts.

High-risk sectors

The ESRI’s study noted that these high-risk sectors accounted for 13.6 per cent of total employment prior to the pandemic and make up 37.5 per cent of PUP claimants. Conversely, low-risk sectors such as finance and IT accounted for 55.4 per cent of employment before to the health pandemic and 19.9 per cent of PUP claimants, it said.

The research also highlighted that the impact of the pandemic is skewed with respect to age, with those under 25 having the highest job loss rate (46.7 per cent) but the lowest share of total employment in the economy (11 per cent).

In contrast, those aged 55 and above have the lowest job loss rate (18.6 per cent) and also a low share of employment (18.4 per cent).

With respect to geographic location, the Border region has the highest job loss rate (29.1 per cent) while Dublin has the lowest job loss rate (23.9 per cent) .

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