Fiduciary Duties of a Company Director

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The Companies Act 2014 for the first time has set out the principal fiduciary duties of a company director. Fiduciary duties are in addition to other statutory duties under the Companies Act 2014 and other legislation. The principal fiduciary duties of a company director are owed to the company, and the company alone.

The principal fiduciary duties of a company director are to:

  • Act in good faith in what the director considers to be the interest of the company.
  • Act honestly and responsibly in relation to the conduct of the affairs of the company.
  • Act in accordance with the company’s constitution and exercise his or her powers only for the purposes allowed by law.
  • Not benefit from or use the company’s property, information or opportunities for his or her own or anyone else’s benefit unless the company’s constitution permits it or a resolution is passed in a general meeting.
  • Not agree to restrict the director’s power to exercise an independent judgment unless this is expressly permitted by the company’s constitution.
  • Avoid any conflict between the director’s duties to the company and the director’s other interests unless the director is released from his or her duty to the company in relation to the matter concerned.
  • Exercise the care, skill and diligence which would be reasonably expected of a person in the same position with similar knowledge and experience as a director. A director may be held liable for any loss resulting from their negligent behaviour.

For further information on the impact of fiduciary duties on your company’s board of directors please contact Emma Dunne, Manager in our Corporate Compliance Department.

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Crowleys DFK Support Cork SMEs’ Global Success

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Edward Murphy, Head of Tax, was featured in Cork Chamber’s 200th anniversary magazine. He discusses Cork, the local Cork SME sector and it’s success on the domestic and global stage.

You can read the full interview below.

Q:   What’s it like to do business in Ireland’s fastest growing city region?

A:   It’s hard not to be excited by the hive of activity in Cork in recent years – from the myriad of new developments, a growing workforce and a thriving third-level education sector to the region’s continued success in attracting high-value overseas investment. However, it’s the global success of our indigenous Cork SME sector that is, perhaps the most exciting.

Q:   Why have indigenous Cork SMEs been so successful locally and globally?

A:   While Cork has a well-earned reputation in attracting and retaining foreign direct investment, the support it offers homegrown entrepreneurs and SMEs is second to none. Innovation and the ambition to think globally is nurtured through an excellent support ecosystem of start-up incubators, accelerator programmes and research, development and innovation hubs; backed by local business organisations, third-level institutions, and public and private investors.

Q:   What are the key challenges facing SMEs looking to expand overseas?

A:   The continued uncertainty surrounding Brexit is currently the biggest challenge facing SMEs that trade with the UK. However, a constant challenge relevant to all markets is access to local, trusted and reliable professional connections and advice overseas. This is a key step in any global expansion strategy and is often a major stumbling block for many businesses. Understanding how to do business in a new jurisdiction can be time consuming and expensive when you don’t have a local relationship or know where to go to get the proper advice.

Q:   Can you describe how Crowleys DFK can help SMEs with their international growth strategies?

A:   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. They represent a diverse range of today’s most innovative and high-performing industries and sectors, including information and communications technology, life sciences, manufacturing and consumer products.

We have been a member of DFK International since 1993. This worldwide association of independent accounting, tax and business advisory firms has over 220 member firms covering 92 countries. We have a long history of working with other DFK Firms. It’s through these strong relationships that we can deliver a complete international service to clients.

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.

We have all the right connections to help businesses achieve their ambitions – locally and globally.

Contact us today for expert advice on growing your SME.

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Skydive Raises Over €6,500 for Cork ARC

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10 brave souls from Crowleys DFK took to the skies last month in an effort to raise funds and awareness for Cork ARC Cancer Support House.

Crowleys DFK have been working with Charity Partner of the Year, Cork ARC, since the beginning of 2019. Cork ARC offer invaluable specialist professional services and emotional support to people with cancer and their families. The majority of their running costs are based on voluntary donations and fundraising efforts. Witnessing first-hand the fantastic work of Cork ARC, inspired 10 Crowleys DFK employees to take to the skies and plunge 10,000ft from an airplane at a speed of 200km per hour. The goal of this skydive was to raise awareness and funds to help Cork ARC continue providing their services free of charge.

The group took the leap for charity at the Irish Parachute Club in Offaly in June 2019. Setting out with an initial fundraising target of €2,600, their incredible efforts have raised over €6,500 for Cork ARC.

For many of the group, it was their first skydive and there are already plans to make it an annual event!

A big well done to all participants and sponsors for getting involved in such a worthy cause.

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Crowleys DFK Launch New Website

Crowleys DFK are excited to announce the launch of our new website.

With a fresh look and feel, the new site offers visitors the opportunity to navigate through the service offerings with ease. This has taken a few months of hard work to complete which was supported by all staff in the firm and they are delighted with the results.

Director of Practice Development, Kim McCarthy, said;

“Our re-launched website provides a better user experience for connecting with our new and existing clients. It helps users to quickly and easily navigate through the website. This launch reflects the continued development and growth at Crowleys DFK.”

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Crowleys DFK Announces Key Promotions

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Crowleys DFK today announced a number of senior promotions to Director and Manager positions across the Firm.

Shane Moloney and Donna Gould have been promoted to Director while Emma Hanifin, David Stuart and Rosalyn Banua have all been promoted to Manager roles.

Managing Partner, James O’Connor, said: “We are delighted to announce these exciting new promotions. They are well-deserved and reflect the hard work, professional growth and commitment of all those promoted.”

New Directors Shane Moloney and Donna Gould joined Crowleys DFK as Chartered Accountant trainees in 2012 and 2010 respectively.

After qualifying, Shane moved from audit into the firm’s advisory team, specialising in Cloud Accounting and Business Process Improvement Services. Recently he has led a number of high-level client advisory assignments, including implementing business outsourcing and performance improvement projects for clients across a range of sectors.

Previously a Manager in the firm’s Accounting Services Department, Donna played a central role in the expansion of the Department in recent years. She is highly regarded by clients in both the public and private sectors and her promotion to Accounting Services Director further strengthens this core business service and ensures that the Department is well placed to continue to grow.

Emma Hanifin also joined the firm as a Chartered Accountant trainee. Her high quality project management skills and dedication to exceptional service delivery sees her promoted to Advisory Manager, specialising in Project Advisory Services.

David Stuart has been promoted to Manager in our Accounting Services and Outsourcing Department. A Chartered Certified Accountant and Xero accredited to the highest achievable level, David will manage our Cloud Accounting Services.

An experienced Internal Auditor, Rosalyn Banua has been promoted to Manager of the firm’s Governance, Risk and Compliance Department. Since joining the firm in 2015, Rosa has worked with an extensive portfolio of publicly funded bodies, semi-state agencies and private sector organisations.

James concluded: “We believe that these promotions are an important building block in our future growth ambitions and the further enhancement of our services to clients. It also highlights our commitment to the long-term career development of our staff.”

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No-Deal Brexit – Trading with the UK

In the event that there is a no-deal Brexit, the UK will be leaving the EU. This will result in withdrawal from the customs union and single market with no alternative trade agreement in place. In this case, customs formalities will apply to trade between Ireland and the UK, just as they would with any other non-EU country.

Revenue have recently issued a communication to Irish traders who import or export goods into or out of the UK. They advise applying for an Economic Operators Registration and Identification (EORI) number. If you are a trader who imports or exports goods into or out of the EU, you are required to have an EORI number.

The purpose of the EORI system is to ensure that EU traders can safely and securely import and export goods to and from non-EU countries using a unique number that is valid throughout the whole European Community and is accessible to European Community customs authorities. The EORI number must be used in all communications with any European Community customs authority where a customs identifier is needed.

If no deal is agreed for the UK’s withdrawal from the EU, Irish traders will need an EORI number in order to continue importing and exporting goods to and from the UK. The application process for an EORI number can take several days. Early application is advised to ensure the continued flow of trade.

When importing or exporting goods to or from a non-EU country, goods will be withheld at customs unless both the importer and the exporter of the goods have EORI numbers. It is important to ensure that your UK trading partners are also EORI registered.

If you register under the EORI system, certain information will be stored on the centralised EORI database. This will be updated by each European Member State. The following lists the type of data that would be stored on the EORI systems:

  • EORI Number
  • Registered Name
  • Address of establishment/residence
  • VAT registration number
  • Legal status
  • Date of establishment
  • Contact information

You may already be registered on the EORI system. You can check by using this tool and searching your Irish VAT registration number and adding the prefix “IE”, e.g. IE1234567P.

If you require any assistance with the EORI system or further details on the above, please contact us.

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Crowleys DFK Announces Cork ARC Cancer Support House as Charity Partner

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Crowleys DFK Charity Partner of the Year

Crowleys DFK is delighted to announce Cork ARC Cancer Support House as its inaugural Charity Partner of the Year for 2019.

Speaking about the announcement, James O’Connor, Crowleys DFK Managing Partner said,

“Crowleys DFK has a long history of successfully fundraising for and contributing to a wide variety of very worthy charities and causes over the years. The launch of our Charity of the Year Programme enables us to channel the charitable efforts of the firm and our staff to support an Irish charity each year and make a meaningful impact”.

The selection of Cork ARC Cancer Support House as the 2019 charity was as a result of a staff charity nomination process.

Over the coming year, Crowleys DFK staff in Dublin and Cork will organise, fundraise, and participate in a number of events to raise funds in aid of Cork ARC. We will also promote awareness of the range of invaluable specialist professional services and emotional support Cork ARC offers people with cancer and their families. Details of the programme events will be announced over the coming weeks and months.

Colette Nagle, Head of Corporate Social Responsibility at Crowleys DFK added,

“We are proud to support Cork ARC and play a part in supporting the great work that they do. We are looking forward to fundraising as much as we can for them through various events and activities. Our Charity of the Year Programme is just one way we can make a difference to the communities we work in.”

CEO of Cork ARC Cancer Support House, Aileen O’Neill said

“Cork ARC are delighted to be chosen as Crowley’s DFK charity partner. We look forward to their support for 2019, and to making a continued positive impact on the lives of all those affected by cancer in our community.’’

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Help to Buy Incentive

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The Help to Buy (HTB) incentive is a scheme to help first time property buyers. It helps with the deposit needed to buy or build a new house or apartment. In order to claim the HTB scheme, you must:

  • Be a first-time buyer
  • Take out a mortgage that is at least 70% of the purchase value of the property
  • Be tax compliant
  • Live in the property for a minimum of 5 years after purchase

To qualify, you must have not bought or built a house or apartment previously on your own or jointly with any other person. You will still qualify for HTB if you have previously inherited or have been gifted a property.

The HTB scheme is back dated to include homes bought from 19 July 2016 and will be available to 31 December 2019. If the property was purchased between 19 July 2016 and 31 December 2016, the price of the property must be €600,000 or less. If the property is bought between 1 January 2017 and 31 December 2019, the property must cost €500,000 or less.

The amount you can claim is the lessor of the following:

  • €20,000
  • 5% of the purchase price of the new home.
  • The amount of Income Tax and Deposit Interest Retention Tax (DIRT) you have paid in the previous 4 tax years.

Regardless of the amount of people who enter into the contract to buy or build the property, the cap of €20,000 applies. Universal Service Charge (USC) and Pay related Social Insurance (PRSI) are not considered when calculating the amount you are entitled to claim.

If you purchased or built the property between 19 July 2016 and 31 December 2016, the refund will be issued directly to you. If you buy a new build between 1 January 2017 and 31 December 2019, the refund will be issued to your contractor. The contractor must be approved by Revenue. If you self-build, the refund is paid to a bank account held with your mortgage provider.

Revenue may clawback the refund if:

  • You do not live in the property for 5 years
  • You do not complete the process to buy the house
  • You were not entitled to the refund
  • The property is not completed

Once the property is built or bought, you have the sole responsibility of complying with the conditions for the HTB refund.

If you require any assistance with HTB or  further details on the above, please contact us.

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Dwelling House Exemption – Capital Acquisitions Tax

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A recent High Court decision has a significant bearing on the application of dwelling house exemption to beneficiaries who inherit a mixed asset estate, comprising of a number of residential properties.

The dwelling house exemption allows someone to inherit a property tax-free provided that they have lived in it for three years before the homeowner’s death and that it was the main home of the person who has died. Critically, if a person owns even a share in another property “at the date of inheritance”, they lose their entitlement to the relief. Revenue has always been of the view that if someone who would otherwise qualify for dwelling house relief inherits not just the main home of the disponer but another property, or a share in another property, they no longer meet the eligibility criteria.

A Court ruling on 25th September 2018 has changed the rules on dwelling house exemption. The High Court ruled in the case of a successor, who inherited both the family home where the successor had lived with the disponer and an interest in four other properties, was entitled to the dwelling house exemption. The judge held that the successor did not have a beneficial interest in either of the dwelling houses at the date of the inheritance, as a successor cannot become beneficially entitled to a house which forms part of the residue of an estate until the assets available for distribution have been ascertained.

The impact of the Court case is that you will no longer be disbarred from dwelling house relief if you inherit property other than the family home in the same will. Revenue has now adopted a revised approach in distinguishing between dwelling houses inherited as a specific legacy and those inherited in the residue of an estate.

Accordingly, a dwelling house forming part of the residue of an estate is not to be taken into account in determining whether a successor has an interest in another dwelling house at the date of an inheritance. Ownership of property received as part of the residue of a will would occur at a later date than “at the date of inheritance”.

Anyone receiving a specific legacy of an interest in a property as well as receiving the family home will continue to be excluded. This is because, as a specific legacy, beneficial ownership of the “other” property would transfer at the same time as the family home.

Revenue acknowledged that if any taxpayers find themselves in a similar set of facts as this case then they may be entitled to a refund of the tax paid, bearing in the mind the four year limit that applies to refunds of tax.

Should you require any further details on the dwelling house exemption, please contact us.

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Taxation of Couriers

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Revenue has recently clarified the taxation of couriers, specifically the tax treatment of motor cycle and bicycle couriers. The following treatment applies from 1 January 2019. Previous agreements will come to an end on this date.

Motor cycle and bicycle couriers are generally engaged under a contract for service i.e. they are self-employed individuals. Whilst the facts of each case may differ, this is the general view adopted by Revenue.

From 1 January 2019 motor cycle and bicycle couriers engaged under a contract for service i.e. self-employed individuals, will need to file a tax return self-assessment.

Expenses

Self-employed couriers can make a claim for any expenditure incurred wholly and exclusively for the purpose of their courier activity, for example, motor expenses & telephone/internet bills.

Revenue’s previous agreement of flat rate deductions for expenses (20%,40% or 45%) will no longer apply with effect from 1 January 2019.

Voluntary PAYE

Voluntary PAYE systems of tax have been implemented by several courier firms to assist couriers in ensuring that they are tax compliant. Revenue has no issue with these arrangements continuing, however Revenue has reiterated that income tax, USC & PRSI should be applied on gross income.

Van Owner-Driver Couriers

Similar to motor cycle and bicycle couriers, Revenue are of the view that van owner-driver couriers are engaged under a contract for service and thus they are self-employed individuals.

Pay and File System for Income Tax Self-Assessment

Under self-assessment there is a common date for the payment of tax and filing of tax returns. You must file your tax return on or before 31 October in the year after the year to which the return relates.

This system, which is known as Pay and File, requires you to:

  • file your return for the previous year
  • make a self-assessment for that year
  • pay the balance of tax for that year
  • pay preliminary tax for the current year.

For example, by 31 October 2019 you must:

  • pay your preliminary tax for 2019
  • file your 2018 self-assessment tax return
  • pay any Income Tax (IT) balance for 2018.

When you pay and file through the Revenue Online Service (ROS), the 31 October deadline is extended to mid-November.

For more information on the taxation of couriers, please contact us.

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