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REDUCTION IN STANDARD RATE OF VAT


Revenue have recently announced as part of the July Stimulus package a temporary reduction in the standard rate of VAT from 23% to 21%.  All other VAT rates will remain unchanged.

This is due to take effect from the 1st of September and will remain in place until the 28th of February 2021. 

While this is a welcome development businesses may face a number of issues and challenges in relation to the rate reduction.  It is important that businesses are ready for the change and that they review their operations in advance of the rate change. 

Typical questions that may arise for businesses include:

  • Can the sales systems, including point of sales terminals, be updated to reflect the reduced rate?
  • Will the business need to adjust the price of goods/services provided to reflect the rate cut?
  • If the business pays their VAT liability by way of a monthly direct debit, does the rate reduction allow for a reduction in the monthly payment?
  • If the supply spans two periods with different VAT rates, the business will need to ensure that the correct rate of VAT is charged.
  • If an advanced payment has been received in respect of a supply, what is the correct VAT rate to be charged in respect of the supply?

If you have any queries in relation to the above please do not hesitate to contact a member of the Cooney Carey tax department at 01 677 9000 or by email at info@cooneycarey.ie

To keep in touch, connect with us on LinkedIn.

Posted on September 3, 2020 by Cooney Carey

COMPANIES (MISCELLANEOUS PROVISIONS) (COVID 19) ACT 2020

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The Companies (Miscellaneous Provisions (Covid-19) Act 2020 which has now been signed into law makes, temporary amendments to the Companies Act 2014 for an interim period up until the 31st December 2020 in response to the challenges Companies may experience as a result of the Covid-19 pandemic. This interim period can be extended further under the provisions of the Act should the Government decide this is warranted.

The key measures provided for by the Act are as follows;

  • Annual General Meetings (AGMs) and general meetings can be convened and held by wholly or partly by electronic means, as long as those entitled to attend have a “reasonable opportunity to participate” including a mechanism for casting of votes by a member whether before or during the meeting. This mechanism shall not require the member to be physically present at the general meeting or require the member to appoint a proxy who is to be physically present at the meeting. The AGM can also be postponed to a date up to 31st December 2020.
  • Dividends which were approved by the directors before or during the pandemic may be reduced or cancelled due to the “actual or perceived consequences of COVID-19 on the affairs of the company”
  • Solvency debt threshold has been raised from €10,000 (for an individual creditor or €20,000 for two or more creditors) to €50,000 for both individual and aggregate debts.
  • Examiners may in “exceptional circumstances” apply to increase the period of examinership to 150 days from the current 100 days.
  • Documents to which the common seal is affixed to may now be signed in counterpart by one director and the company secretary or by two directors were previously all signatures were required on the same document.

The Act has provided clarity on how companies can deal with specific issues arising as a result of the Covid-19 situation.

Should you require further assistance in this regard please contact Mary Flanagan or Louise Edwards on 016779000 or info@cooneycarey.ie for further details.

To keep in touch, connect with us on LinkedIn.

Posted on September 1, 2020 by Cooney Carey

A No-Deal Brexit Remains Very Much On The Cards

Overview

Forecasting what turn Brexit is going to take next, remains extremely difficult – when so much remains unknown. However, the possibility of a no deal Brexit remains very likely outcome, even considering the most recent extension in departure date from 29th March to 12th April. Below are some scenarios that could occur in the coming weeks.

Mrs May Resigns

A no-deal Brexit could be delayed if Theresa May was ousted as prime minister. The EU would accept a request for a further delay in such a situation. Albeit the existing problems regarding Brexit would remain. The EU have insisted that they will not renegotiate Mrs May’s withdrawal agreement.

Article 50 Withdrawn

The petition asking the British Government to revoke Article 50 has received over 5.3 million signatures as at 11 pm Sunday 24th March. This petition included with 1 million people marching on parliament requesting a second referendum. It remains unlikely that this pressure will result in a second referendum. 

Mrs May Enforces Exit Without a Deal

If Mrs May manages to hang on in Downing Street, the Prime Minister could force a no deal exit if she so wishes. The UK parliament has not taken no-deal off the table.

Customs Union with EU

A customs union with the EU is the most promising alternative to Mrs May deal. It would only require moderate changes to the political declaration. There is however a significant risk of the second referendum supporters refusing to accept a customs union as a compromise.

No Option – Including Customs Union

This is the most likely of the scenarios. This option could receive backing in the House of Commons. The Prime Minster goes back to EU without a plan. EU27 subsequently refuse to grant any more delays. Thus, triggering a hard Brexit.

ESRI Report on impact of Brexit on Irish economy

The ESRI have studied 3 scenarios on Brexit an estimate that in a hard Brexit scenario the Irish economy could contract by as much as 5% over 10 years, while employment would be 3.4% lower over that same period or 77,500 fewer jobs. This disorderly scenario would also mean real wages would decrease by 1.4% relative to consumption.

What questions do you have?

We are happy to help. Please post your comment below or call Colin O’Brien, Corporate Finance Director at Cooney Carey, on 01 677 9000. Alternatively, send him an email: cobrien@cooneycarey.ie

To keep in touch, connect with our friendly team on LinkedIn.

If you found this article interesting, please share it with other businesses. 

Image by Free-Photos from Pixabay

Posted on March 27, 2019 by Colin O'Brien

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