A new Vacant Homes Tax (VHT) was introduced in Budget 2023. The primary objective of this is to increase the availability of housing, but landlords need to be aware of the restrictions on allowable pre-letting expenses when calculating their rental profits.
Vacant Homes Tax (VHT)
VHT applies to residential properties which have been occupied for less than 30 days in a chargeable period.
VHT is calculated at three times the residential property’s local property tax (LPT) liability.
The following will be exempt from the VHT:
Properties recently sold or listed for sale or rent.
Properties vacant due to illness or long-term care of the occupier.
Properties which were the principal residence of a deceased chargeable person in either the chargeable period or in the 12-month period prior to the commencement of the chargeable period.
Properties which were the principal residence of a deceased chargeable person where a grant to administer the estate issues in the chargeable period and for any chargeable period following such a grant, where the administration of the estate has not yet completed.
Properties which are vacant due to significant refurbishment work.
The first chargeable period runs from 1 November 2022 to 31 October 2023.
A VHT return will be due by 7 November 2023, with the tax payable by 1 January 2024.
Pre-Letting Expenses
In determining the taxable rental profits from the letting of residential property, a landlord may claim a deduction for the following expenses:
Costs not repaid by tenant – e.g., light & heat costs.
Capital allowances on qualifying capital items – e.g., furniture, white goods.
However, with the exception of property-related fees such as letting or legal fees incurred on the first letting, a deduction is not permitted for expenses incurred prior to the first letting of the property.
The Finance Act 2017 sought to address the above and introduced an allowable deduction of up to €5,000 for certain pre-letting expenses incurred on vacant residential properties. From 1 January 2023, this cap on the authorised deduction has been increased to €10,000 and the specified period for which the property was vacant has been reduced from twelve to six months. The landlord must incur the expenditure during the twelve months prior to first letting the property.
If the landlord ceases to let the property within four years, the deduction for the pre-letting expenses will be clawed back in the year in which the property ceases to be let as a residential property. Importantly, a clawback will be triggered if there is a change of use from residential or if the property is sold.
If you need any assistance with VHT or Pre-Letting Expenses, please contact Niall Grant, Partner in our Tax Services’ Department.
Do you have property in the UK, or are you about to acquire or have you recently sold property there? If so, you must comply with new anti-money laundering legislation for UK properties.
On 1 August 2022, the new Register of Overseas Entities, came into effect through the Economic Crime (Transparency and Enforcement) Act 2022.
Any overseas entity that wants to buy, sell, or transfer property or land in the UK, must register with the UK Companies House and declare the identity of their beneficial owners or managing officers before 31 January 2023.
Overseas entities that disposed of property or land since 28 February 2022 (when legislation for the register was first announced) are required to provide a statement to Companies House.
The register applies to property acquired in:
England and Wales since 1 January 1999;
Scotland since 8 December 2014; and
Northern Ireland since 1 August 2022.
Failure to comply with these new obligations is a criminal offence and will lead to fines of up to £2,500 per day or a prison sentence of up to 5 years.
For further information, please Emma Dunne, Assistant Manager of Corporate Compliance.
https://www.crowleysdfk.ie/wp-content/uploads/shutterstock_591493334-scaled.jpg17062560Alison Bourkehttps://www.crowleysdfk.ie/wp-content/uploads/crowleysdf-chartered-accountants-1.pngAlison Bourke2022-09-14 08:01:362023-06-29 09:50:59New Obligations for Overseas Entities with UK Properties
Our previous article on RCT and VAT pitfalls for non-resident contractors provided a general overview of the RCT regime in Ireland. We will now look at a case study analysis of RCT and VAT treatment and explore scenarios in which we have observed mistakes commonly being made among taxpayers.
1. Supply of Labour for Relevant Operations
We have observed cases whereby contractors in the construction industry, particularly non-resident contractors, engage recruitment firms to supply labour to carry out construction operations on a site in Ireland.
While it is commonly interpreted that RCT only applies to construction operations, in fact the definition of “relevant operations” extends to both the carrying out of and the supply of labour for the performance of, relevant operations in the construction industry.
Case Study – Example 1
Company A (based in Spain) is engaged by Company B (based in Ireland) to carry out demolition works on a number of properties in Ireland. Company A, in turn, engages Company C (a recruitment firm based in the UK) to provide the personnel required to complete the demolition works in Ireland.
RCT Obligations
Company B is a Principal Contractor in respect of these works and is required to operate RCT on the payments made to Company A. This brings Company A within the scope of RCT as it is regarded as a Subcontractor carrying out construction operations in Ireland.
Whilst Company A is a subcontractor in respect of its engagement with Company B, Company A is also a Principal Contractor in respect of its engagement with Company C. Company A will be required to operate RCT on the payments made to Company C because Company C has arranged the supply of labour for the performance of the demolition works on the sites in Ireland.
This brings Company C, the non-resident recruitment firm, within the scope of RCT, as it is regarded as a Subcontractor carrying out construction operations in Ireland.
In this example, Company B must register for RCT as a Principal Contractor, Company A must register for RCT as both a Principal Contractor and a Subcontractor, and Company C must register for RCT as Subcontractor.
VAT Obligations
The provision of the services by Company C to Company A and Company A to Company B falls within a reverse charge provision for the supply of labour and construction services, which is subject to RCT.
Company C, as a Subcontractor, does not have an output VAT liability in respect of the provision of services provided to Company A. As such, Company C will issue its invoices to Company A with no VAT charge.
Company A, as a Principal Contractor, must self-account for VAT on a reverse charge basis (typically at 13.5%) on receipt of the invoices from Company C. Company A should have an entitlement to a simultaneous VAT input credit as it has used the services to make taxable supplies to Company B.
Company A, as a Subcontractor, does not have an output VAT liability in respect of the provision of the services provided to Company B. As such, Company A will issue its invoices to Company B with no VAT charge.
Company B, as a Principal Contractor, must self-account for VAT on a reverse charge basis (typically at 13.5%) on receipt of the invoices from Company A. Company B should have an entitlement to a simultaneous VAT input credit as it has used the services to make taxable supplies to Company B.
In this example, only Company A and Company B are required to register for Irish VAT. Only Principal Contractors are required to account for VAT on the receipt of construction services that fall within the RCT regime.
Company C is not required to register for VAT in respect of its supplies to Company A.
2. Mixed Contracts
A major risk with the definition of a relevant contract arises for contracts that cover both RCT-type and non-RCT-type supplies.
Case Study – Example 2
Company A engages Company B to carry out repair and maintenance works on a number of properties in Ireland.
Is the contract liable to RCT?
The definition of “construction operations” includes contracts for repair work which is interpreted as the replacement of constituent parts i.e., the repair of a broken window by installing a new pane of glass, mending a faulty boiler etc.
However, the definition of “construction operations” specifically excludes maintenance work i.e., cleaning, unblocking of drains etc.
In this example, Company A and Company B have entered into a repair and maintenance contract. This is referred to as a mixed contract. Revenue’s view on mixed contracts is that if any part of a contract includes “relevant operations” then the contract as a whole is considered a relevant contract and all payments under that contract are liable to RCT.
As Company A and Company B have entered into a mixed contract, the contract as a whole, is considered a relevant contract, and all payments made by Company A to Company B are liable to RCT.
This treatment applies even where no repairs are actually carried out by Company B in completing a particular job under the contract.
In this example, Company A must register for RCT as a Principal Contractor and Company B must register for RCT as a Subcontractor.
A common pitfall we see in this area is for a company to raise separate invoices for the maintenance work and the repair work. They then only treat the invoice for the repairs as being subject to RCT. This is incorrect as it is the overall contract, not the elements being invoiced, that governs whether RCT should be applied or not.
However, if there are separate contracts, one covering maintenance and one covering repairs, then only the contract covering the repairs is subject to RCT.
3. VAT Reverse Charge
VAT is normally charged by the person supplying the goods or services. However, under the RCT regime, the person receiving the goods or services (i.e., the Principal Contractor) accounts for VAT as if they had supplied the service and pays it directly to Revenue. This is known as the VAT Reverse Charge.
We commonly see the VAT Reverse Charge being applied incorrectly in cases where a subcontractor supplies goods or services, other than construction services, as part of the overall contract.
Contractors must be aware that while the overall contract may fall within the RCT regime, that does not mean that the VAT Reverse Charge applies to all goods or services invoiced under that contract.
Case Study – Example 3
The facts are the same as in Example 2. See below for reference:
Company A engages Company B to carry out repair and maintenance works on a number of properties in Ireland.
In this case the repair and maintenance contract in place between the parties provides that a separate charge will apply where repairs are carried out.
Company B has now completed repair and maintenance works for Company A and is looking to raise a sales invoice to Company A for the following:
Repair Works – €4,500 (exclusive of VAT)
Maintenance Works – €10,000 (exclusive of VAT)
VAT Obligations
Generally, the VAT Reverse Charge only applies to payments that are in respect of construction operations which in this case, are the repair works.
Company B must therefore issue two VAT invoices as follows:
An invoice for the repair works of €4,500 on which the VAT Reverse Charge applies. Company A will be required to self-account for VAT at 13.5% on the receipt of this invoice from Company B.
An invoice for the maintenance works (i.e., not considered a construction service) of €10,000 on which VAT at the 13.5% rate is applied. Company A will be required to pay Company B the total invoice value including VAT amounting to €11,350.
RCT Obligations
As set out in Example 2, where a contract is for repair and maintenance, RCT applies to all payments under the contract.
As such, Company A is required to notify the total payment to Revenue. This should include the VAT exclusive payment for the repair works plus the VAT inclusive payment for the maintenance works. Assuming for the purposes of this example that only one payment is to be made by Company A to Company B for the works, Company A would file a Payment Notification with Revenue as follows:
Repair Works (VAT Exclusive) – €4,500
Maintenance Works (VAT Inclusive) – €11,350
Total Payment Reported to Revenue – €15,850
It is important to note that if a repair and maintenance contract provides for a single consideration for all works completed under the contract, then the VAT Reverse Charge must be applied to the full consideration.
Should you require any assistance in this area, please contact us.
https://www.crowleysdfk.ie/wp-content/uploads/pexels-pixabay-532079-scaled.jpg17032560Alison Bourkehttps://www.crowleysdfk.ie/wp-content/uploads/crowleysdf-chartered-accountants-1.pngAlison Bourke2022-08-17 08:48:542023-06-29 09:51:22RCT & VAT Pitfalls in the Construction Industry | Case Study Analysis
Passing on your business and developing your exit strategy is one of the most important business decisions you will ever have to make.
Many of the tax reliefs one may wish to claim on a transfer of assets can be subject to very stringent conditions, such as minimum periods of ownership or active involvement in the business. Succession planning can often seem like something which should be considered close to retirement. However, the risk of waiting is that many of the key tax reliefs available to business owners are not accessible when the time comes to pass on assets, as the relevant conditions cannot be met.
What can help avoid this problem is advance planning. Through preparation, a business owner can identify some of the key conditions required to avail of certain tax reliefs, allowing them sufficient time to take the necessary steps to qualify for these reliefs. Therefore, it is not unusual to see a succession plan being put in place 5 to 10 years prior to its implementation.
The transfer of a business can trigger several taxes such as:
Capital Gains Tax (CGT) which is a tax payable by the person selling or transferring an asset. The current rate of CGT is 33%.
Capital Acquisitions Tax (CAT) which is a tax payable by the person in receipt of a gift or inheritance. The current rate of CAT is 33%.
This article will focus on the key tax reliefs available to business owners and their family members on the transfer of their business.
CGT Reliefs
In order to mitigate or eliminate the CGT liability on the transfer, there are two main reliefs which may be availed of provided certain conditions are met. These are:
Retirement Relief
Entrepreneur Relief
Retirement relief provides for relief from CGT on the disposal of qualifying assets.
To qualify for this relief, the main conditions are that the individual must be aged 55 or over and must be disposing of or transferring qualifying business assets. In addition, the individual must have been a working director of the company for 10 years and a fulltime working director for at least 5 of the years prior to the transfer. The latter condition can be a stumbling block for many individuals seeking to claim this relief. For example, an individual may be a director of more than one company and therefore may not meet the full-time working director requirement. This is why it is so important to prepare a succession plan early in your lifetime.
If retirement relief is not available, the individual may qualify for RevisedEntrepreneur Relief which limits the rate of CGT to 10% on the first €1m of gains on the disposal of certain business assets. In contrast to retirement relief, this relief has no age requirement and the individual can qualify for it at any stage provided the relevant criteria is met. To qualify for the relief, the individual should have owned the shares in the business for a continuous period of 3 of the last 5 years and spent 50% or more of their working time as an employee or director of the company.
CAT Reliefs
An individual can receive gifts/inheritances up to a certain amount tax-free throughout their lifetime. Currently, a child can receive a gift or an inheritance up to €335K from his/her parents.
In the context of a business, a child may, on receipt of a relevant business property, qualify for what’s known as Business Relief. This reduces the value of the gift or inheritance being received to 10% of the market value of the business property, resulting in a significant tax saving. Similar to the reliefs already discussed, there are certain conditions that need to be met around ownership and the level of involvement in the business.
Farmers may qualify for Agricultural Relief on the receipt of a gift or inheritance of agricultural property. Agricultural property includes agricultural land, crops and trees growing thereon and farm buildings appropriate to the property. By qualifying for this relief, the market value of the property being received will be reduced by 90%. This makes it a very valuable relief.
There are two tests that need to be passed before a person can avail of the relief:
The farmer test requires 80% of the beneficiary’s assets to be agricultural property immediately after receipt of the inheritance.
The trading test requires the individual to farm the land themselves for at least 6 years or alternatively lease the land out to a qualifying farmer for 6 years.
If a CAT liability arises with or without claiming any of the CAT reliefs, it may be possible to reduce or eliminate the liability by claiming a credit for the CGT paid by the parent on the transfer of property.
Although there are many commercial considerations to be made when passing on wealth as well as discussions with family members as to suitable successors, tax plays a key role in informing the business owner as to the extent of any tax liability. Knowing this information prior to implementing a succession plan enables the owner to make more informed decisions and allows for maximising the amount of reliefs that may be claimed. This will reduce the overall tax costs of the transfer.
For more information on tax reliefs related to your exit strategy, please contact us.
https://www.crowleysdfk.ie/wp-content/uploads/Succession-Planning-1-scaled.jpg16512560Alison Bourkehttps://www.crowleysdfk.ie/wp-content/uploads/crowleysdf-chartered-accountants-1.pngAlison Bourke2022-05-31 08:05:522023-06-29 09:52:51Exit Strategy: How to Pass your Business on to the Next Generation
DFK International has been ranked as the 6th largest association in the world in the International Accounting Bulletin’s (IAB’s) annual 2022 World Survey Report.
Crowleys DFK has been a proud member of DFK International for twenty-nine years.
The report is based on collective fee income, with DFK International members firms achieving a turnover of $1.532 billion.
DFK has sat in seventh place for 10 years but has moved up the list after achieving a growth rate of 3% compared to the previous year.
The association now has 230 member firms, 1,413 partners, 13,919 staff members and 455 offices in 94 countries.
Martin Sharp, executive director of DFK International, said:
“We are very proud to be among the leading associations worldwide.
Moving up to sixth place demonstrates that despite the pandemic, DFK remains one of the strongest associations in the world and our member firms have continued to grow, which is a fantastic achievement.
We have seen growth across all services lines, particularly in North America, which shows that our members have continued to provide outstanding support to their clients in a challenging environment and in-turn have expanded their practices.
We now look forward to another successful year as we continue to do business and share knowledge and best practice to achieve further growth.”
Being a part of an association with a strong global presence has greatly widened Crowleys DFK’s intellectual resources, allowing us to offer local advice supported by a broader knowledge of international financial reporting.
This breadth of knowledge is a critical resource for our clients, which include leading firms in industries such as information and communications technology, e-commerce, life sciences, manufacturing and consumer products.
These clients find that our expert team provides fundamental advice on structuring their Irish operations, on securing Government funding, and dealing with tax and legal obligations.
As Ireland continues to be a vital hub for international business, our understanding of the challenges faced by companies moving into Ireland will continue to be a critical resource.
Eddie Murphy, Head of Tax and FDI Services at Crowleys DFK, said:
“At Crowleys DFK, we understand the challenges faced by our SME and owner-managed business clients. We are proud of the reputation and long-term relationships we have built with them over the years.
Whether it’s getting advice on taking on two employees in Germany, accessing capital markets in London or New York or helping technology companies expand into San Francisco, we connect our clients with trusted professionals throughout the world.
In many cases our clients prefer to deal with us and in these instances, we instruct the other DFK firms. This means clients can concentrate on their business and don’t need to spend time developing new relationships abroad.”
To learn more about DFK International visit www.dfk.com.
https://www.crowleysdfk.ie/wp-content/uploads/09acd302-f307-745e-2ebc-063c283b6ea3.png12401748Alison Bourkehttps://www.crowleysdfk.ie/wp-content/uploads/crowleysdf-chartered-accountants-1.pngAlison Bourke2022-04-12 15:10:152023-06-29 09:53:35DFK International Ranked 6th Largest Association in the World
An area that has continued to cause challenges and risks for businesses is the operation of Relevant Contracts Tax (RCT) and VAT.
The most common mistakes we see being made in this sector are by non-resident principal contractors who engage a subcontractor to carry out construction works in Ireland.
This article will focus on the most common pitfalls that we see occurring within this sector by non-resident principal contractors and the steps that can be taken to avoid making costly mistakes.
1. Compliance Obligations for Non-Resident Principal Contractors
When a non-resident principal contractor engages a subcontractor to carry out construction works in Ireland, the RCT system must be applied to payments made to the subcontractor.
The first potential pitfall for a non-resident principal contractor is not taking the reasonable care to familiarise themselves with their tax obligations under the RCT regime. In such a case, the non-resident principal contractor will eventually be contacted by Revenue, informing them of their failure to operate the RCT regime. This usually occurs following the commencement of the works in Ireland, at which point the mistakes have already been made and costly penalties can be imposed by Revenue.
As such, it is very important that a non-resident principal contractor is aware of their tax obligations prior to the commencement of any construction works in Ireland so that the necessary administrative steps can be taken to ensure that they are set up for the RCT system and fully compliant in operating RCT on payments to subcontractors.
The administrative steps to be taken by a non-resident principal contractor include registering for RCT on Revenue’s Online Service (ROS) and operating the RCT regime throughout the duration of the project in Ireland (further detail on this below).
2. Operation of the RCT System
Once a principal contractor is registered for RCT with Revenue, there are a number of steps that must be taken each time a principal contractor enters into a relevant contract with a subcontractor and each time a payment is made to the subcontractor. These steps are summarised as follows:
a. Contract Notification
The first step is to input a “Contract Notification” through Revenue’s online RCT system. A principal contractor must notify Revenue each time it enters into a new relevant contract with a subcontractor. The Principal will then receive a contract reference number and an indication of the applicable RCT deduction rate for the subcontractor.
b. Payment Notification
Before making a payment to a subcontractor, the principal must notify Revenue’s online eRCT system of the intention to make the payment and provide details to Revenue of the gross amount to be paid. This process is known as “Payment Notification”. This must be done for each payment made to the subcontractor.
c. Deduction Authorisation
Revenue will issue a deduction authorisation to the principle contractor which will specify the rate and amount of tax to be deducted from the payment to the subcontractor. This process is known as “Deduction Authorisation”. The principle is required to provide a copy of this authorisation to the subcontractor.
d. Deduction Summary (RCT Return)
Revenue’s eRCT system prepares a pre-populated period end return known as a “Deduction Summary (i.e. RCT Return)”, which is based on the deduction authorisations issued during the period. The due date for payment of the RCT withheld is the 23rd day after the end of the period covered by the return.
The most common pitfall we see occurring in practice are inconsistencies in notifying Revenue of each and every payment made to a subcontractor by the principal contractor. This can be a costly mistake for the principal contractor as the penalties Revenue can impose for failure to operate the RCT system in this way range between 3% to 35%, depending on the RCT deduction rate applicable to the subcontractor.
To put this into perspective, if a subcontractor has been assigned a 35% RCT deduction rate and the principal contractor makes a payment of €25,000 to the subcontractor without first notifying Revenue of the payment and deducting the appropiate withholding tax, Revenue can impose a penalty of €8,750 (i.e. 35% of the invoice value) on the principal contractor for its failure to operate the RCT system.
These penalties can become very costly for a business where they fail to operate the RCT system on high value invoices.
3. Operation of RCT and Reverse Charge VAT
Typically, VAT is normally charged by the person supplying the goods or services. However, under the RCT regime, the person receiving the goods or services (the principal contractor) calculates the VAT due on the invoice from the subcontractor and pays it directly to Revenue. This is referred to as Reverse Charge VAT and it is common area in which mistakes are made by non-resident principal contractors.
The following should occur when a subcontractor invoices a principal contractor for construction services that are subject to RCT:
The subcontractor raises an VAT invoice with the zero rate of VAT applied;
The invoice should include the VAT registration number of the principal contractor and include the narrative “VAT on this supply to be accounted for by the principal contractor”;
The principal contractor calculates the VAT due on the invoice value and records it as VAT on sales (Box T1) on its VAT return. Where it is entitled to do so, the principal contractor can claim a simultaneous VAT input credit (Box T2) on the VAT return, thus resulting in a VAT neutral position.
Although the RCT system can seem like a heavy administrative burden on a business, it can be managed relatively smoothly with the proper administration. Our tax specialists look after all administrative issues regarding RCT, provide effective advice and answer questions you may have regarding RCT.
Should you require any assistance, please contact us.
https://www.crowleysdfk.ie/wp-content/uploads/shutterstock_524031511-scaled.jpg17072560Alison Bourkehttps://www.crowleysdfk.ie/wp-content/uploads/crowleysdf-chartered-accountants-1.pngAlison Bourke2022-03-30 09:02:492023-06-29 09:54:02A Guide to Avoiding the Most Common RCT & VAT Pitfalls for Non-Resident Principal Contractors
Crowleys DFK is celebrating global independent accountancy association DFK’s 60th anniversary. We are proud to have been members for the past 29 years.
Reflecting on the 60th milestone, Martin Sharp, executive director of DFK International, said:
“In 1962 the founders of DFK International envisaged setting up an association of independent firms that could support their clients to do business internationally and provide an alternative to the big networks which were being set-up.
Although DFK has grown considerably and the international business landscape has changed, the principles and ethos on which DFK was established still remain.
Beyond this, DFK provides a forum to share knowledge and best practice between like-minded individuals who are keen to support their clients and help fellow member firms.
We have a strong family atmosphere which has grown over the years to give member firms the opportunity to build relationships with people from different countries and different cultures.
This year we celebrate this success and look forward to continuing to build these relationships in the years to come.”
James O’Connor, Managing Partner at Crowleys DFK commented:
“There is no doubt that joining DFK in 1993 has been a significant catalyst in the success and growth of our firm. Since then, we have grown to become a 10 Partner and 115 staff practice and one of the leading independent practices in Ireland.
There is great comfort in being able to connect our clients with trusted friends all around the world when they need help and advice abroad.”
The association provides us with a platform to share knowledge, ideas and best practice as well as information about the latest technology to ensure we remain at the forefront of the sector.
It is also a pioneer in training and development, creating programmes to specifically develop young professionals in the industry as they progress in their careers.
DFK International has 229 member firms which have a combined total of 441 offices across 93 countries.
The association strives for equality, diversity and inclusion, promoting a culture that celebrates difference, challenges prejudice and ensures fairness.
We are proud to have been part of such a magnificent organisation for such a long time and look forward to continuing to be part of the DFK family.
Eddie Murphy & James O’Connor DFK International Conference 2019, Singapore
Happy 60th Birthday DFK!
To learn more about DFK International visit www.dfk.com.
In 2021, all charities registered in Ireland must complete their first annual Compliance Record Form to comply with the Charities Regulatory Authority (CRA) Governance Code (the Code).
How to demonstrate compliance with the Code
The Code sets out the minimum standards that charity trustees should meet to effectively manage and control their charity.
To demonstrate compliance with the Code, charities must complete the Compliance Record Form and subsequently update the Compliance Record Form every year.
The Code operates on a ‘comply or explain’ basis, meaning that charities must comply with the Code or else explain why they have not done so.
Compliance with each specific standard must be demonstrated as part of the Compliance Record Form. Organisations must record the actions that the charity has taken to meet each standard of the Code and reference the evidence that backs this up. The Compliance Record can also be used to explain why a charity is not in compliance with any particular standard in the Code.
Reporting on compliance with the Code in 2021
Under the Charities Act 2009, every registered charity in Ireland is required to submit an Annual Report to the Charities Regulator within ten months of the charity’s financial year-end. From 2021, charities will be required to submit a declaration in relation to compliance with the Code with their Annual Report.
A charity will be required to determine if:
It does not need to meet the Additional Standards of the Charities Governance Code.
It does need to meet the Additional Standards of the Charities Governance Code.
It has not yet commenced compliance with the Charities Governance Code.
Additional standards of the code are those standards which a charity that is considered “complex” should meet or charities who are not complex but decided to apply the additional standards.
The CRA has not defined what is considered a “complex” charity and the charities trustees of each organisation are best placed to make that decision. Charity trustees can base this decision on indicators such as income streams, number of employees, complexity of activities, working with vulnerable people or operating overseas.
The charity will be required to declare if, at the time of filing its Annual Report, they have:
Complied with all sections of the Charities Governance Code.
Complied with some of the sections of the Charities Governance Code.
Formal adoption of the Code at Board meetings
All charities are expected is to discuss and agree at board meetings how they will meet the standards of the Code and to document their decisions in the minutes. The Compliance Record Form should record the actions taken to meet each standard of the Code and all minutes of meetings relevant to each standard of the Code.
Monitoring
The Charities Regulator will adopt a balanced and proportionate response in relation to any charity which is not in full compliance with the Code in 2021, with an emphasis on understanding common reasons for partial or non-compliance. This will enable the Regulator to identify common reasons for non-compliance and provide further guidance to charities on meeting the standards set out in the Code.
How Crowleys DFK can help
We recognise that completing the Compliance Record Form and ensuring compliance is properly documented is a time-consuming task and the process will be challenging for many organisations. At Crowleys DFK, we can assist you through the process of completing the Compliance Record Form. We have developed a suite of templates for the Compliance Record Form and the various policies and documents needed as evidence of compliance.
The Social Inclusion and Community Activation Programme (SICAP) 2018 –2022 provides funding to tackle poverty and promote social inclusion and equality through local engagement and partnerships with disadvantaged individuals, community organisations and public sector agencies.
The programme has two goals that focus on supporting communities and individuals:
Goal 1:Supporting Communities – To support communities and target groups to engage with relevant stakeholders in identifying and addressing social exclusion and equality issues, developing the capacity of local community groups and creating more sustainable communities.
Goal 2: Supporting Individuals – To support disadvantaged individuals to improve the quality of their lives through the provision of lifelong learning and labour market supports.
SICAP is managed and administered by the Local Community Development Committees (LCDCs) in each local authority area, which may be delivered at a local level by external party/(ies).
From 2018, the role of conducting audit / verification checks on the external parties receiving SICAP funding has been subsumed into the internal audit function of each Local Authority.
How can Crowleys DFK help?
Crowleys DFK has the expertise to conduct SICAP audits / verification checks for Local Authorities’ Internal Audit Units and LCDCs.
Our subject matter specialists have taken part in SICAP training programmes delivered by both POBAL and the Department of Housing, Planning and Local Government and our audit team are fully trained on the usage of SICAP’s data management system IRIS.
We understand that the audits must have a financial focus and can provide assurance that grant monies are spent for the purposes intended in accordance with programme rules and contractual conditions. The audits must also include a review of internal financial controls and corporate governance arrangements.
Contact Vincent Teo or Tony Cooney for more information on how Crowleys DFK can assist you with your SICAP audits.
The Central Bank have issued new regulations regarding new lending rules for Credit Unions. These will come into effect in January 2020.
As a result of the new regulations, the existing lending maturity limits which cap the percentage of their lending for periods of greater than five and ten years will be removed. These maturity limits will be replaced by new concentration limits on a tiered basis, for home mortgage and business loans, expressed as a percentage of total assets.
This means credit unions with the financial strength, competence and capability, will have the flexibility to undertake increased longer term lending. This includes home mortgage and business lending.
“The changes being announced today follow a comprehensive review of the lending framework for credit unions. This forms part of our commitment to ensuring a responsive regulatory framework. It is important that the lending framework remains appropriate for credit unions taking account of their risk management, capabilities, expertise and financial resilience,” said Patrick Casey, Registrar for Credit Unions.
You can read the Central Bank’s press release here.
At Crowleys DFK, we provide a variety of services to credit unions. For further information, please contact Tony Cooney, Partner & Head of Risk Consulting.
https://www.crowleysdfk.ie/wp-content/uploads/shutterstock_532207864.gif500750Alison Bourkehttps://www.crowleysdfk.ie/wp-content/uploads/crowleysdf-chartered-accountants-1.pngAlison Bourke2019-12-02 10:50:242023-01-27 09:37:28Central Bank Announces New Lending Rules for Credit Unions
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Do you have property in the UK, or are you about to acquire or have you recently sold property there? If so, you must comply with new anti-money laundering legislation for UK properties.
Our previous article on 
DFK International has been ranked as the 6th largest association in the world in the International Accounting Bulletin’s (IAB’s) annual 2022 World Survey Report.
